Archive for category world cost of living 2010
Negotiating an Expatriate Package
Posted by Xpatulator in cost of living, cost of living allowance, cost of living calculator, cost of living comparison, expatriate, expatriate engagement, Expatriate Package, Expatriate Pay, Expatriate Prospects, global, international, International Cost of Living; International Cost of Living Index, Negotiating, world, world cost of living 2010 on June 16, 2010
Although international experience can be helpful for future promotional prospects, companies recognize that employees are cautious about going abroad for “possible future consideration”. Consequently companies usually offer employees financial and non-financial incentives to compensate for the upheaval associated with relocation abroad.
Expatriate assignments can be associated with emotional and physical hardship for the employee and their family. Companies compensate by paying expatriates proportional to the degree of hardship as well as cost of living differentials.
Often expectations for a generous expatriate package run very high, based largely on rumors and urban legend. Individuals may know of expatriates who lived the high life, tax free, and retired early after buying a large house in an exotic location. The reality is a little different for most of us.
Managing these potentially unrealistic expectations is the responsibility of Human Resources and Compensation & Benefits professionals. The challenge is to balance the needs and expectations of employees, with the financial needs of the organization. Satisfying the needs of both the employee and the organization requires designing expatriate assignments to benefit both the organization and the employee.
The amount of salary negotiated should take into consideration a number of factors such as:
• Cost of living difference compared to the assignment location
• Degree of hardship likely to be experienced
• Increased responsibilities such as having less corporate support in remote locations
Negotiating each of the above as separate amounts can simplify an expatriate package negotiation such as:
• Consistency when an organization sends people to different countries with widely different costs of living
• Helps prevent expatriates from feeling demoted upon their return to the home country because their salary was decreased significantly. It is easier to remove the adjustment made for the change in cost of living and hardship if it is separate from the salary.
Cost of living and hardship adjustments should be based on expatriate life style rather than the life style of local people. Expatriates living in some developing countries may find that local food, basic accommodation, and basic healthcare is relatively inexpensive, while maintaining their old lifestyle with imported food, “expatriate” accommodation, private healthcare, and entertainment/recreation is very expensive. The cost of living for local people is not always the same as it is for an expatriate.
The benefits offered to expatriates are most often better than the benefits offered to local employees, with exception perhaps of places such as the Middle East. Many organizations offer benefits such as tax consultation, relocation, accommodation, transport, visa, immigration, and language training.
Additional benefits that may be negotiated include:
• Cross-cultural training to help manage expatriate expectations by learning more about their future colleagues and local culture.
• A pre-assignment visit can help adjust an expatriates expectations versus the experience of other expatriates in that destination.
• Family benefits: Family adjustment and lifestyle issues are one of the causes of an expatriate not completing their assignment:
o Education for the expatriate’s children is often a deal-breaker for the family to accept an assignment.
o Helping the spouse obtain work.
• Career coaching / mentoring for the expatriate during their assignment, particularly during the first and last six months, and after they return to the home office helps ensure retention and helps manage their expectations for subsequent assignments.
• Repatriation training: Expatriate families and employees can benefit from repatriation training to help readjust to living in the home country and returning to the original work environment. This is often overlooked, while all the focus is on assisting the expatriate adjust to the host country.
A flexible approach to negotiating an expatriate package that is a win-win for both the employee and the organization is required. One size does not fit all!. A young, single accountant has very different expectations and needs compared with an older engineer with a family.
Calculating an appropriate salary package taking into account the existing salary, cost of living and hardship differences, as well as accounting for increased responsibilities may help ensure that the most important needs of prospective expatriates are addressed.
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International Cost of Living Index Rank 2010
Posted by Xpatulator in global cost of living 2010, international cost of living 2010, world cost of living 2010 on January 14, 2010
The January 2010 International Cost of Living Ranking covers 276 global locations across the world.
We have reported the 10 most expensive countries to live in, the 10 fastest movers up and down in ranking and the 10 most expensive locations per basket item.
Tokyo is still the most expensive place for an expatriate to live with the highest overall cost of living index while Tianjin in China takes over from Zimbabwe with the lowest cost of living index.
The 10 most expensive ranked international cost of living locations as at January 2010, together with the previous Quarter’s rank as at October 2009, is as follows:
January 2010 Rank Country, City (October 2009 Rank)[Change in Rank]
1) Japan, Tokyo (1) [0]
2) Switzerland, Geneva (3) [-1]
3) Brazil, Brasilia (12) [-9]
4) Switzerland, Zurich (5) [-1]
5) China, Hong Kong (2) [3]
6) Norway, Oslo (10) [-4]
7) Denmark, Copenhagen (6) [1]
8) Venezuela, Caracas (7) [1]
9) Central African Republic, Bangui (4) [5]
10) Chad, N’Djamena (9) [1]
10 Fastest Movers Up
The fastest movers up in the rankings as a result of an increase in relative cost of living are:
1) 107 Guinea, Conakry (184) [-77]
2) 185 Fiji, Suva (247) [-62]
3) 84 Seychelles, Victoria (145) [-61]
4) 137 Australia, Adelaide (196) [-59]
5) 176 Macedonia, Skopje (235) [-59]
6) 128 Poland, Warsaw (183) [-55]
7) 151 Malawi, Lilongwe (206) [-55]
8) 169 Uruguay, Montevideo (216) [-47]
9) 214 Lesotho, Maseru (256) [-42]
10) 69 Colombia, Bogota (111) [-42]
10 Fastest Movers Down
The fastest movers down in the rankings as a result of a decrease in relative cost of living are:
1) 171 Timor-Leste, Dili (79) [92]
2) 179 Ghana, Accra (117) [62]
3) 153 Ukraine, Kiev (106) [47]
4) 139 Georgia Republic of, Tbilisi (101) [38]
5) 225 Ethiopia, Addis Ababa (191) [34]
6) 208 Congo Democratic Rep, Kinshasa (176) [32]
7) 133 Sierra Leone, Freetown (102) [31]
8) 205 Bulgaria, Sofia (174) [31]
9) 147 Liberia, Monrovia (119) [28]
10) 219 Armenia, Yerevan (193) [26]
The Top 10 most expensive international locations for each basket group
We make use of 13 basket groups which are the result of extensive research of actual spending habits. The cost of living indices reflect a reality-based international expenditure pattern. To compare the cost of living between 2 locations, the difference in the aggregate cost of all the items in each of the 13 baskets were compared in each location using the average price in each location for the same quantity of each item. Cost of living is the difference in the local cost of the basket in the same currency. The baskets are weighted according to expat spending norms.
Alcohol & Tobacco Top 10:
1) Kiribati, South Tarawa
2) Comores, Moroni
3) Korea Republic of, Seoul
4) Norway, Oslo
5) Thailand, Bangkok
6) Qatar, Doha
7) Colombia, Bogota
8) Brazil, Brasilia
9) Djibouti, Djibouti
10) Papua New Guinea, Port Moresby
Clothing Top 10:
1) Bahrain, Manama
2) Russia, Moscow
3) Croatia, Zagreb
4) Lebanon, Beirut
5) Brazil, Brasilia
6) Angola, Luanda
7) China, Beijing
8) Slovakia, Bratislava
9) United Arab Emirates, Dubai
10) New Caledonia, Noumea
Communication Top 10:
1) New Caledonia, Noumea
2) Kiribati, South Tarawa
3) Cameroon, Douala
4) Burkina Faso, Ouagadougou
5) Latvia, Riga
6) Cape Verde, Praia
7) Germany, Berlin
8) Gabon, Libreville
9) Papua New Guinea, Port Moresby
10) Colombia, Bogota
Education Top 10:
1) Venezuela, Caracas
2) Brazil, Brasilia
3) Angola, Luanda
4) Bermuda, Hamilton
5) Solomon Islands, Honiara
6) New Caledonia, Noumea
7) Central African Republic, Bangui
8) Australia, Sydney
9) Gabon, Libreville
10) Bahamas, Nassau
Furniture & Appliances Top 10:
1) Mali, Bamako
2) Cameroon, Douala
3) Brazil, Brasilia
4) New Caledonia, Noumea
5) Central African Republic, Bangui
6) Chad, N’Djamena
7) Cameroon, Yaounde
8) Togo, Lome
9) Russia, Moscow
10) Vanuatu, Port Vila
Groceries Top 10:
1) Solomon Islands, Honiara
2) Japan, Tokyo
3) Kiribati, South Tarawa
4) Central African Republic, Bangui
5) Denmark, Copenhagen
6) Congo, Brazzaville
7) Gabon, Libreville
8) Korea Republic of, Seoul
9) Norway, Oslo
10) Bahrain, Manama
Healthcare Top 10:
1) Japan, Tokyo
2) Kiribati, South Tarawa
3) China, Hong Kong
4) Brazil, Brasilia
5) Angola, Luanda
6) Venezuela, Caracas
7) Australia, Sydney
8) Comores, Moroni
9) Chad, N’Djamena
10) Bermuda, Hamilton
Household Top 10:
1) Japan, Tokyo
2) China, Hong Kong
3) Venezuela, Caracas
4) Taiwan, Taipei
5) Korea Republic of, Seoul
6) United Arab Emirates, Dubai
7) Angola, Luanda
8) Qatar, Doha
9) United Arab Emirates, Abu Dhabi
10) Croatia, Zagreb
Miscellaneous Top 10 (costs related to general goods and services such as domestic help, dry cleaning, linen, and office supplies):
1) Central African Republic, Bangui
2) Norway, Oslo
3) Guinea-Bissau, Bissau
4) Guinea, Conakry
5) Finland, Helsinki
6) New Caledonia, Noumea
7) Qatar, Doha
8) Denmark, Copenhagen
9) United Kingdom, London
10) Greenland, Nuuk
Personal Care Top 10:
1) Kiribati, South Tarawa
2) Gambia, Banjul
3) Comores, Moroni
4) Algeria, Algiers
5) Slovakia, Bratislava
6) Brazil, Brasilia
7) Chad, N’Djamena
8) Samoa, Apia
9) Australia, Sydney
10) Burkina Faso, Ouagadougou
Recreation and Culture Top 10:
1) Papua New Guinea, Port Moresby
2) Vanuatu, Port Vila
3) Central African Republic, Bangui
4) Mozambique, Maputo
5) Chad, N’Djamena
6) Benin, Cotonou
7) Switzerland, Geneva
8) Niger, Niamey
9) Gabon, Libreville
10) Switzerland, Zurich
Restaurants, Meals Out and Hotels Top 10:
1) United Arab Emirates, Dubai
2) Greece, Athens
3) Belgium, Brussels
4) Qatar, Doha
5) Slovenia, Ljubljana
6) Russia, Moscow
7) Korea Republic of, Seoul
8) Norway, Oslo
9) United Arab Emirates, Abu Dhabi
10) France, Paris
Transport Top 10:
1) Norway, Oslo
2) Cameroon, Douala
3) Switzerland, Geneva
4) Switzerland, Zurich
5) Liechtenstein, Vaduz
6) Denmark, Copenhagen
7) Netherlands, Amsterdam
8) Germany, Berlin
9) Comores, Moroni
10) Solomon Islands, Honiara
The definitions of each basket and the full cost of living rankings for all 276 locations are available on the Xpatulator Website.
Steven is Chief Instigator at www.xpatulator.com a website that provides cost of living index information and calculates what you need to earn to compensate for cost of living, hardship, and exchange rate differences.
