Hong Kong is called on to come up with ways to retain foreign talent after being ranked second most expensive city globally and first in Asia. (Photo Credit: Chris Lusher)
Mercer’s 23rd annual Cost of Living Survey featured five Asian cities in this year’s top 10, with Hong Kong being the second most expensive city on the list for expatriates. The other four cities were Tokyo (3rd), Singapore (5th), Seoul (6th), and Shanghai (8th). The survey found that currency and cost of expatriate consumer goods are the key contributing factors accounting for the change in rankings of most Asian cities.
Cities are ranked based on exchange rate fluctuations against the US dollar and the comparative costs of a basket, indexing the cost of over 200 items including transportation, housing, food, clothing, household goods and entertainment. Most Chinese cities saw a general drop in rankings due to the depreciation of the Renminbi against the US dollar. On the contrary, Japanese cities have been climbing up the ranks due to the appreciation of the Japanese yen and high costs of expatriate consumer goods.
The survey is designed to provide multinational companies and governments a comprehensive look at the figures in order to determine compensation allowances for expatriates. Mario Ferraro, Global Mobility Leader for Asia, Middle East and Africa (AMEA), Mercer, claimed: “Although a number of Asian cities remain amongst the world’s most expensive cities, key financial hubs such as Hong Kong and Singapore still continue to attract talent and remain a top choice for relocation.”
Hong Kong, as the report stressed, must retain its attractiveness for foreign talent and expertise while protecting employee purchasing power, to continue flourishing as a global financial centre.
Ilya Bonic, Senior Partner and President of Mercer’s Career business, stated: “There are numerous personal and organisational advantages for sending employees overseas, whether for long or short-term assignments, including career development by obtaining global experience, the creation and transfer of skills, and the re-allocation of resources.” The report added that multinational companies should recognise the importance of attracting foreign human capital, where the range of perspective and skill is broadened.