As companies become more and more global, it’s increasingly important for rising finance executives to have experience living overseas. For those who have the opportunity to work abroad, though, there’s good reason to be choosy. An annual look by Mercer at the quality of life in more than 200 cities quantifies just how disparate living conditions can be from Sydney to Shenzhen.
European cities garnered 7 of the top 10 rankings in Mercer’s latest survey, released in May, with Vienna, Zurich, and Geneva heading the list (see below). The highest-ranking U.S. city is Honolulu at 31, followed closely by San Francisco and Boston. New York, considered the “base” city with a quality of life rating of 100, ranks 49th on the overall list and 6th among U.S. cities. Singapore and Tokyo are the top-ranked cities in Asia. At the bottom of the list is Baghdad, with a rating of 15, with Port au Prince, Haiti, and several cities in Africa clustering near it.
The ratings are used primarily by organizations to determine appropriate compensation and support services for expatriates, says Rebecca Powers, a principal in Mercer’s human-capital consulting group. The numbers are generally viewed in a broad sense, with little or no tinkering done in response to a change of a few ratings points. “Companies will typically wait until there’s a fairly big drop in the quality of life before they adjust compensation,” says Powers, who estimates a score of 90 as a rough threshold for when additional payment might be warranted. However, additional compensation for shorter-term or even project-based assignments is becoming increasingly common. In general, there’s no decrease in pay for expats moving to greener pastures.
The ratings are based on 10 factors, with the political and social environment most heavily weighted, and medical and health considerations coming in second. “If you’re living in a war zone or worried you’re going to be a victim of crime, that’s definitely a drop in the quality of life,” says Powers. Traffic, climate, and education are also among the considerations.
China is the most popular destination for most U.S.-based expats these days, says Powers, based on anecdotal evidence. According to the survey, Shanghai is the top-ranked city in mainland China, at number 98, while Jilin is the bottom-ranked one, at number 160. Most U.S. cities do not constitute hardship assignments, although Los Angeles ranks only slightly above the 90-point mark.
Some companies may use the data to help choose among several possible locations, Powers says, the thinking being that “if all else is equal, why not go where it’s pleasant?” However, the list may not necessarily work as a good travel guide. “Because we rate stability and safety, the places that score very high are not always the most exciting,” she notes.
The number of employees on an expatriate assignment continues to rise. A rite of passage for many future leaders, an expatriate assignment is full of opportunities and risks.
Take a look at this article that explores the best and worst things of an expatriate assignment and be ready for the ride of your life!
An Expatriate Assignment: Now the Hard Question – Where?
The Asia-Pacific zone is currently experiencing an important rise in expatriates, especially Shanghai, Singapore and Hong Kong
Current expat trends show that Western Europe and the US are the two biggest regions sending and receiving expats. London and Geneva are often considered to be the best cities in Europe while New York seems to be the favourite in the USA.
The Asia-Pacific zone is currently experiencing an important rise in expatriates, especially in Shanghai, Singapore and Hong Kong. However, there is a visible drop in expatriations in Africa due to current political tensions and wars.
Checklist: How to decide on the location
Sending employees abroad can provide significant opportunities for companies as well as for employees. For expatriations to be a success for both parties, however, companies and expats must carefully consider the following aspects when selecting a location:
- Current market situation and opportunities
- Added value of the country and its knowledge in a specific field
- Local savoir-faire and experiences that can be shared with other parts of the business
- Expat expectations and specialisations. For example, engineers in the oil and gas industry are ideal for assignments in the Middle East or Africa
- Expat profile and situation (gender, family, etc.) which determines the level of living conditions required
The Best and Worst Things About an Expatriation Assignment
When is the right moment to go abroad? And what benefits are there for the employee and the company?
Attitudes towards expatriations can be very mixed. While some employees see the benefits, others are often more worried about the many challenges international assignments can present. From losing touch with the parent company to not receiving adequate cultural awareness training support, employees can sometimes fail to see the many benefits an international assignment can bring both personally and professionally.
Any company hoping to send employees abroad, therefore, needs to actively present international assignments as positive opportunities by emphasising their advantages. Highlighting some of the following topics can help companies avoid creating mistrust or misunderstanding with potential expatriates:
- Potential for career progression
- Increased salary or compensation in many cases
- Attractive perks and benefits for the whole family
- Development of professional skills that could lead to future promotion
- Enhanced personal experiences and potential opportunities for travel they will have abroad
- Discovery of new people, traditions, landscapes and ways of working
- Familiarise kids to a new language and culture and open their mind
- Added values and benefits that the employee will contribute to the company
Expatriates need to understand that it is the right moment to go abroad and that it will result in benefits not only for the company but for themselves.
“Fortune favours the prepared mind” – Louis Pasteur
Expats must have an in-depth understanding of the destination country in order to avoid culture shock
When relocating abroad, expatriates face a whole new set of cultural norms, attitudes and behaviours. Their ability to integrate their new cultural surroundings with their own unique cultural background and expectations is paramount to the success of the expatriation.
Expats must have an in-depth understanding of the destination country in order to avoid culture shock and to build more profitable relationships with locals.
Living and working in another country can be radically different so it’s essential that expats have the cultural skills they need to adapt to and understand the new customs and traditions they encounter to optimise the expatriation.
Get yourself as well as your family ready
If the family does not successfully adapt to the host country, the whole expatriation could be in jeopardy
Cultural awareness training for relocation programmes can vastly help to improve an expatriate’s experience and success when living and working abroad. Training helps to prepare future expatriates and their families for their relocation abroad and provides them with a global understanding of the culture, values, customs and traditions of the new country.
The family should also be involved in any cultural awareness training that is organised, as studies show that if the family does not successfully adapt to the host country, the whole expatriation could be in jeopardy. By having expatriates and their families participate in a culture for relocation programme, companies will get the most out of the employee’s assignment, thereby increasing their ROI.
Providing the right level of cultural support and training companies can truly benefit from sending their employees to live and work abroad
An expatriation assignment offers a unique experience for both the expatriate employee and their family. As such the importance of cultural awareness training programmes should not be underestimated. Providing the right level of cultural support and training combined with selecting the most appropriate location and marketing the benefits of the assignment, companies can truly benefit from sending their employees to live and work abroad.