- Personal safety key factor in determining expat quality of living
- Vienna ranks highest in overall quality of living
- Sydney holds onto spot in top ten
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Australian cities have been rated some of the safest in the world in an era of heightened global security issues and social unrest, according to Mercer’s 2016 annual Quality of Living survey. Sydney also held onto its 10th position in the list of cities with the highest quality-of-living overall.
Other Australian cities followed Sydney in the overall rankings with Melbourne (15), followed by Perth (21), Adelaide (27), Canberra (28), and Brisbane (36).
Vienna continues its reign in the top spot for overall quality of living, followed by Zurich (2), Auckland (3), and Munich (4). Vancouver (5) is North America’s highest ranking city, and Singapore is the highest ranking Asian city, holding 26th place.
Mercer’s Quality of Living survey includes a personal safety ranking based on internal stability, crime levels, performance of local law enforcement, and the home country’s relationship with other countries. Safety, in particular, is a key consideration for multinational companies when sending expatriate workers abroad, both because it raises concerns about the personal safety of the expat and their family and because it has a significant impact on the cost of global compensation programmes.
Luxembourg tops the personal safety list and is followed by Bern, Helsinki, and Zurich – all tied in 2nd place. Baghdad (230) and Damascus (229) are the world’s least safe cities according to the ranking. All Australian cities are considered safe. Canberra, Sydney, Melbourne, and Perth all tied at 25th in the personal safety ranking.
“Heightened domestic and global security threats, population displacement resulting from violence, and social unrest in key business centres around the world are all elements adding to the complex challenge facing multinational companies when analysing the safety and health of their expatriate workforces,” said Ilya Bonic, Senior Partner and president of Mercer’s Talent business.
Lorraine Jennings, Mercer’s global mobility practice leader in Australia and New Zealand, said, “Multinational companies need accurate data and objective methods to determine the cost implications of deteriorating living standards and personal safety issues when compensating expatriates. Our survey helps companies better understand a country’s infrastructure against a number of factors, particularly environment, health, security and safety.”
“Australian cities illustrate a stable infrastructure, increased availability of housing on the city fringe and life-style choices that are particularly appealing to the younger generation and this is all good news in terms of Australian based companies attracting international talent.
“However, in a climate of cost containment, it is important that organizations do not lose sight of their ‘duty of care’ when assigning employees and their families to difficult locations.
“To remain competitive multinational companies should adopt a holistic approach to international assignments – for example – when it comes to an employee’s health they could incorporate a quality of living allowance that remunerates for poor medical and health conditions, a health and well-being policy that mitigates risks through adequate health checks, an assessment of pollution levels, and availability of medical facilities,” Ms Jennings said.
Mercer’s authoritative survey is one of the world’s most comprehensive, and is conducted annually to enable multinational companies and other employers to compensate employees fairly when placing them on international assignments. Employee incentives include a quality-of-living allowance and a mobilit premium.* Mercer’s Quality of Living surveys provide valuable data as well as hardship premium recommendations for over 450 cities throughout the world; this year’s ranking includes 230 of these cities.
Australia & New Zealand
New Zealand and Australia have some of the highest quality of living worldwide. Auckland ranks 3rd globally, Sydney 10th, Wellington 12th, and Melbourne 15th. For personal safety, Pacific cities also rank high, with Auckland and Wellington sharing 9th place. Canberra, Melbourne, Perth, and Sydney share 25th place.
The vast region of Asia has considerable variation in quality of living. In 26th place, Singapore remains its highest ranking city, whereas Dhaka (214) is the lowest. Following Singapore in Southeastern Asia is Kuala Lumpur (86). Other key cities include Bangkok (129), Manila (136), and Jakarta (142). Japanese cities rank highest in Eastern Asia, with Tokyo in 44th place. Other notable cities here are Hong Kong (70), Taipei (84), Shanghai (101), and Beijing (118).
For personal safety, the rankings for Asian cities again vary greatly. Singapore (8) ranks highest overall and is followed by five Japanese cities—Kobe, Nagoya, Osaka, Tokyo, and Yokohama—that are tied for 32nd place. Other key cities include Hong Kong (37), Taipei (78), Beijing (97), Seoul (115), New Delhi (142), and Jakarta (172). Following considerable political unrest and terrorist attacks in several tourist areas over the last few years, Bangkok ranked 173rd for personal safety.
Despite economic uncertainties, Western European cities continue to enjoy some of the highest quality of living worldwide; they fill seven places in the top-10 list. Vienna continues to lead the ranking and has done so in the last seven published rankings. It is followed by Zurich (2), Munich (4), Dusseldorf (6), Frankfurt (7), Geneva (8), and Copenhagen (9). In 69th place, Prague is the highest ranking city in Central and Eastern Europe, followed by Ljubljana (76) and Budapest (77). The lowest ranking cities in Europe are Kiev (176), Tirana (179), and Minsk (190).
European cities also dominate the top of the personal safety ranking with Luxembourg in the lead, followed by Bern, Helsinki, and Zurich, which are tied for the number-two spot. Vienna ranks 5th; Geneva and Stockholm are placed jointly in 6th; and Copenhagen, Dusseldorf, Frankfurt, Munich, and Nurnberg all share 11th place. A number of key or capital cities do rank considerably lower as many suffered either terrorist attacks or social unrest in the last few years; examples include Paris (71), London (72), Madrid (84), and Athens (124). The recent political and economic turmoil in Greece, which resulted in violent demonstrations in Athens and other cities in the country, has undermined its safety ranking. Kiev (189), St. Petersburg (197), and Moscow (206) rank lowest for personal safety in the region.
Quality of Living remains high in North America, where Canadian cities dominate the top of the list. Vancouver (5) is the highest ranking city, followed by Toronto (15) and Ottawa (17). In the United States, San Francisco (28) ranks highest for quality of living, followed by Boston (34), Honolulu (35), Chicago (43), and New York City (44). In Mexico, Monterrey (108) is the highest ranking city, whereas Mexico City ranks 127th. The lowest ranking cities in North America are Monterrey (108) and Mexico City (127) and for the Caribbean, Havana (191) and Port-au-Prince (227). In South America, Montevideo (78), Buenos Aires (93), and Santiago (94) remain the highest ranking cities for quality of living, whereas Bogota (130), La Paz (156), and Caracas (185) rank lowest.
Canadian cities all rank high for personal safety, with Calgary, Montreal, Ottawa, Toronto, and Vancouver sharing 16th place, whereas no US cities make the top 50. Kingston (199), Tegucigalpa (201), and Port-au-Prince (211) have the lowest levels of personal safety in the region. In 96th place, Montevideo is South America’s highest ranking city for personal safety; Caracas (214) is the lowest.
Most North American cities remain fairly safe for expatriates. But Mexican cities are ranked relatively low, mainly because of drug-related violence. The recent increase of unemployment in Latin America and Caribbean countries, along with the economic downturn and political instability in some of these countries, explains relatively low rankings in personal safety across the region.
Middle East and Africa
Dubai (75) continues to rank highest for quality of living across Africa and the Middle East, followed by Abu Dhabi (81) and Port Louis (83) in Mauritius. The South African cities of Durban, Cape Town, and Johannesburg rank 85th, 92nd, and 95th respectively. Baghdad (230) ranks lowest regionally and worldwide.
Only a handful of cities in this region place in the top 100 for personal safety—with Abu Dhabi ranking highest in 23rd place, followed by Muscat (29), Dubai (40), and Port Louis (59). Upcoming host of the 2022 FIFA World Cup, Doha, ranks 70th for personal safety. Regional geopolitics is highly volatile and characterised by safety concerns, political turmoil, and an elevated risk of terrorism. The lowest ranking cities in the region are Damascus (229) and Baghdad (230), both of which have witnessed continual violence and terrorist attacks that weigh upon the daily life of locals and expatriates.
Notes to Editors
Mercer produces worldwide quality-of-living rankings annually from its Worldwide Quality of Living Surveys. Details are available from Mercer Client Services PH: 1800 645 186 or at www.mercer.com/qualityofliving.
The data was largely analysed between September and November 2015, and it will be updated regularly to account for changing circumstances. In particular, the assessments will be revised to reflect significant political, economic, and environmental developments.
The information and data obtained through the Quality of Living reports are for information purposes only and are intended for use by multinational organisations, government agencies, and municipalities. They are not designed or intended for use as the basis for foreign investment or tourism. In no event will Mercer be liable for any decision made or action taken in reliance of the results obtained through the use of, or the information or data contained in, the reports. While the reports have been prepared based upon sources, information, and systems believed to be reliable and accurate, they are provided on an “as-is” basis, and Mercer accepts no responsibility/liability for the validity/accuracy (or otherwise) of the resources/data used to compile the reports. Mercer and its affiliates make no representations or warranties with respect to the reports, and disclaim all express, implied and statutory warranties of any kind, including, representations and implied warranties of quality, accuracy, timeliness, completeness, merchantability, and fitness for a particular purpose.
Expatriates in Difficult Locations: Determining Appropriate Allowances and Incentives
Companies need to determine expatriate compensation packages rationally, consistently, and systematically using reliable data. Providing incentives to reward and recognise the effort that employees and their families make when taking on international assignments remains a typical practice, particularly for difficult locations.
*Two common incentives include a quality-of-living allowance and a mobility premium:
- A quality-of-living or “hardship” allowance compensates for a decrease in the quality of living between home and host locations.
- A mobility premium simply compensates for the inconvenience of being uprooted and having to work in another country.
A quality-of-living allowance is typically location-related, while a mobility premium is usually independent of the host location. Some multinational companies combine these premiums, but the vast majority provides them separately.
Quality of Living: City Benchmarking
Mercer also helps municipalities to assess factors that can improve their quality of living rankings. In a global environment, employers have many choices about where to deploy their mobile employees and set up new business. A city’s quality of living can be an important variable for employers to consider.
Leaders in many cities want to understand the specific factors that affect their residents’ quality of living and address those issues that lower a city’s overall quality-of-living ranking. Mercer advises municipalities by using a holistic approach that addresses the goals of progressing towards excellence and attracting both multinational companies and globally mobile talent by improving the elements that are measured in its Quality of Living survey.
Mercer Hardship Allowance Recommendations
Mercer evaluates local living conditions in more than 450 cities surveyed worldwide. Living conditions are analysed according to 39 factors, grouped in 10 categories:
- Political and social environment (political stability, crime, law enforcement, etc.).
- Economic environment (currency exchange regulations, banking services).
- Socio-cultural environment (media availability and censorship, limitations on personal freedom).
- Medical and health considerations (medical supplies and services, infectious diseases, sewage, waste disposal, air pollution, etc.).
- Schools and education (standards and availability of international schools).
- Public services and transportation (electricity, water, public transportation, traffic congestion, etc.).
- Recreation (restaurants, theatres, cinemas, sports and leisure, etc.).
- Consumer goods (availability of food/daily consumption items, cars, etc.).
- Housing (rental housing, household appliances, furniture, maintenance services).
- Natural environment (climate, record of natural disasters).
The scores attributed to each factor, which are weighted to reflect their importance to expatriates, permit objective city-to-city comparisons. The result is a quality of living index that compares relative differences between any two locations evaluated. For the indices to be used effectively, Mercer has created a grid that enables users to link the resulting index to a quality of living allowance amount by recommending a percentage value in relation to the index.
Mercer is a global consulting leader in talent, health, retirement and investments. Mercer helps clients around the world advance the health, wealth and performance of their most vital asset – their people. Mercer’s more than 20,000 employees are based in more than 40 countries and the firm operates in over 130 countries. Mercer is a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC), a global professional services firm offering clients advice and solutions in the areas of risk, strategy and people. With 57,000 employees worldwide and annual revenue exceeding $13 billion, Marsh & McLennan Companies is also the parent company of Marsh, a leader in insurance broking and risk management; Guy Carpenter, a leader in providing risk and reinsurance intermediary services; and Oliver Wyman, a leader in management consulting. For more information, visit ww.mercer.com.au. Follow Mercer on Twitter @MercerAu