Remote Working Affects Staff’s Compensation: Mercer

GLOBAL – In its Cost of Living Index 2022, Mercer stated that the prevalence of working from home (WFH) is among several factors that have a significant effect on employees’ salaries, reported Relocate Magazine on Saturday (2 July, SGT).

“The rise of remote and flexible working, the war in Ukraine, currency fluctuations and widespread inflation are having a material impact on employee compensation, which can have serious consequences for companies in the global battle for talent,” wrote the American asset management company in its latest report.

Mercer partner Vince Cordova revealed that the 2022 Index took into account the rising prevalence of remote work, with more businesses considering it when deciding their flexible work policies.

“One of the consequences of the pandemic was this concept of work from anywhere, with more employees now asking employers if they can support that. Companies now want some information on what the economic impact of that relocation would be, and that’s how we’re seeing mobility expand.”

“Both inflation and exchange rate fluctuations directly influence the purchasing power of employees working outside their country of origin,” he explained, adding that the rise in flexible work arrangement had also resulted in many expatriates reconsidering their priorities on work-life balances and the choice of where to live.

Meanwhile, Hong Kong was named as the world’s most expensive city for expatriates, while rival financial hub Singapore was ranked 8th.

The Chinese territory had held the number one spot in Mercer’s rankings four times in the last five years. But it fell to 2nd place in 2021 after Ashgabat, Turkmenistan. Hong Kong reclaimed the top place this year partly due to inflationary pressures.

Notably, Mercer’s Cost of Living Index is based on comparative costs of over 200 goods and services in each city. These include food, housing, clothing, transportation, entertainment, and household products. New York is utilised as the base city for the analysis.

Mercer’s top 20 most expensive cities for expats

1. Hong Kong
2. Zurich
3. Geneva
4. Basel
5. Bern
6. Tel Aviv
7. New York
8. Singapore
9. Tokyo
10. Beijing
11. Copenhagen
12. Shanghai
13. Shenzhen
14. Seoul
15. London
16. Nassau
17. Los Angeles
18. Guangzhou
19. San Francisco
20. Honolulu