Western European Cities Top Quality of Living Ranking ‒ Mercer

  • Vienna takes the top spot globally, Baghdad ranks lowest
  • San Francisco is the top-ranked city in the United States, Detroit
    ranks lowest
  • Personal safety key factor in determining expat quality of living
  • Luxembourg ranks highest for personal safety; Baghdad lowest

NEW YORK–(BUSINESS WIRE)–Despite recent security issues, social unrest, and concern about the
region’s economic outlook, European cities continue to offer some of the
world’s highest quality of living, according to Mercer’s 18th
annual Quality of Living Survey. Safety, in particular, is a key factor
for multinationals to consider when sending expatriate workers abroad,
both because it raises concerns about the expat’s personal safety and
because it has a significant impact on the cost of global compensation
programs.

“Heightened domestic and global security threats, population
displacement resulting from violence, and social unrest in key business
centers around the world are all elements adding to the complex
challenge facing multinational companies when analyzing the safety and
health of their expatriate workforces,” said Ilya Bonic, Senior Partner
and President of Mercer’s Talent business. “Multinational companies need
accurate data and objective methods to determine the cost implications
of deteriorating living standards and personal safety issues when
compensating expatriates.”

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
survey also identifies the personal safety ranking for the full list of
cities; it is based on internal stability, crime levels, performance of
local law enforcement, and the home country’s relationship with other
countries. 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.

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 mobility premium.* Mercer’s Quality of
Living Survey provides valuable data as well as hardship premium
recommendations for over 450 cities throughout the world; this year’s
ranking includes 230 of these cities.

“Ensuring that the needs of expatriates and their families are met
wherever work takes them is an essential part of talent retention and
recruitment strategies for most multinationals,” said Slagin Parakatil,
Principal at Mercer responsible for the quality of living research.
“Managing safety and health issues is of utmost importance, especially
for employees who relocate with a family. Our surveys enable companies
to take adequate precautions for them.

Mr. Parakatil added, “Other elements that add to safety costs in the
host location are obtaining suitable and well secured accommodation;
having an in-house comprehensive expatriate security program and
providing access to reputable professional evacuation services and
medical support firms, and finally, providing security training and
guarded office premises.”

Americas

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. 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.
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.

Steve Nurney, Leader of Mercer’s Global Mobility Practice for North
America, explained, “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.”

Europe

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 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.

Asia-Pacific

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 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.

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.

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). The 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
. Individual reports are produced for
each city surveyed. Moreover, comparative quality-of-living indexes
between a base city and host city are available, as are multiple-city
comparisons. Details are available from Mercer Client Services in
Warsaw, at +48 22 434 5383 or at www.mercer.com/qualityofliving.

The data was largely analyzed 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 organizations, 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 recognize 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 analyzed according to 39
factors, grouped in 10 categories:

1. Political and social environment (political stability, crime,
law enforcement, etc.).

2. Economic environment (currency exchange regulations, banking
services).

3. Socio-cultural environment (media availability and censorship,
limitations on personal freedom).

4. Medical and health considerations (medical supplies and
services, infectious diseases, sewage, waste disposal, air pollution,
etc.).

5. Schools and education (standards and availability of
international schools).

6. Public services and transportation (electricity, water, public
transportation, traffic congestion, etc.).

7. Recreation (restaurants, theatres, cinemas, sports and
leisure, etc.).

8. Consumer goods (availability of food/daily consumption items,
cars, etc.).

9. Housing (rental housing, household appliances, furniture,
maintenance services).

10. 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.

About Mercer

Mercer is a global consulting leader in talent, health, retirement and
investments. Mercer helps clients around the world advance the health,
wealth and careers of their most vital asset – their people. Mercer’s
more than 20,000 employees are based in 43 countries, and the firm
operates in over 140 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 annual revenue of $13 billion and 57,000
colleagues worldwide, 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 www.mercer.com.
Follow Mercer on Twitter @Mercer.

*Based on November 2015 survey

Contacts

Mercer
Miriam Siscovick,+1 206-356-8549
miriam.siscovick@mercer.com