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May 15, 2009
10 Best Cities in the World for Employees to Live

Vienna, Austria, has the highest quality of living in the world, according to a ranking by Mercer.

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The ranking can help employers in dertmining quality of living or hardship allowances for employees who take on international assignments. The allowances allow employers to compensate expatriates for differences in the quality of living between their home and host locations.

For the ranking, Mercer rated 215 cities in the following categories:

  • Economic environment (currency exchange regulations, banking services, etc)
  • Socio-cultural environment (censorship, limitations on personal freedom, etc)
  • Health and sanitation (medical supplies and services, infectious diseases, sewage, waste disposal, air pollution, etc)
  • Schools and education (standard and availability of international schools, etc)
  • Public services and transportation (electricity, water, public transport, traffic congestion, etc)
  • Recreation (restaurants, theatres, cinemas, sports and leisure, etc)
  • Consumer goods (availability of food/daily consumption items, cars, etc)
  • Housing (housing, household appliances, furniture, maintenance services, etc)
  • Natural environment (climate, record of natural disasters)

The firm used New York as the base city, giving it an index score of 100. Vienna received the highest score, 108.6, and Baghdad (Iraq) received the lowest, 14.4.

At the top of the ranking, Vienna edged out Zurich and Geneva, Swizterland. Vancouver (Canada) and Auckland (New Zealand) are tied for fourth in the rankings. Rounding out the top 10 are:

  • Dusseldorf, Germany
  • Munich, Germany
  • Frankfurt, Germany
  • Bern, Switzerland
  • Sydney, Australia

Overall, European cities continue to dominate the top locations. In the United States, the highest ranking city is Honolulu (29th), followed by San Francisco (30th), Boston (35th), Washington (44th), Chicago (44th) and New York (49th). Singapore (26th) is the top-scoring Asian city followed by Tokyo (35th).

Mercer says the international financial turmoil as had an effect on international assignments.

“As a result of the current financial crisis, multinationals are looking to review their international assignment policies with a view to cutting costs,” says Slagin Parakatil, senior researcher at Mercer. “Many companies plan to reduce the number of medium to long-term international assignments and localize their expatriate compensation packages where possible though the hardship allowance, based on quality of living criteria, will remain an essential component of the package.”

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