Magazine article Workforce Management

Cost-of-Living Survey May Help Firms Tweak Pay

Magazine article Workforce Management

Cost-of-Living Survey May Help Firms Tweak Pay

Article excerpt


Paying $3.47 for a cup of coffee is commonplace in Warsaw, but it is tantamount to highway robbery in Buenos Aires, where Argentineans generally plunk down $ 1.47 lor their brew of choice. The price difference may not seem like that big a deal when it comes to a cup ol Java, but it can add up lor bigticket items and have quite an ellect on the quality of life lor expatriate workers.

One way that companies can ensure workers have comparable living standards-whether they're in New York or New Delhi-is through careful management of cost-oi-living allowances, says Rebecca Powers, a principal consultant for Mercer Human Resource Consulting. "Rapid currency fluctuations and sudden changes in the rental of real estate make it pressing lor companies to be proactive in this area," she notes.

Mercer recently released the Worldwide Cost of Living Survey for 2006, which could help employers calculate fair allowances for expatriate workers. The study covers 144 cities and compares the cost of 200 items, such as food, housing and entertainment.

Several myths about the cost of living are husted by the report. Tokyo is not the world's most expensive city to live in; that distinction helongs to Moscow. And no, deploying workers from an industrialized market to a developing nation does not always save money. The cost of living in Cleveland, Pittsburgh and Detroit is cheaper than that of Guatemala City.

According to the survey, tour of the world's 10 most expensive cities are in Asia. Seoul, South Korea, ranks No. 2, followed hy Tokyo at No. 3, Hong Kong at No. 4, and Osaka, Japan, at No. 6.

London, which places No. 5 in the survey, is the most expensive European city. Swiss cities Geneva and Zurich; Copenhagen, Denmark; and Oslo, Norway, round out the top 10.

The Brazilian cities of Sao Paulo and Rio de Janeiro-the most expensive cities in Latin America-jumped dramatically, climhing from I 19 and 124 to 34 and 40, respectively. …

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