Any remuneration manager involved in devising expatriate pay packages would be well advised to look at the regular reviews produced by ECA International, the international human resources consultancy. The ECA has just published its latest twice-yearly cost-of-living survey. It provides a wealth of information, underpinned by detailed research, to help ease the pain of making that posting abroad.
As a starting point in their research, ECA economists calculate the average gross annual salary earned by a middle manager on the same level for a selection of 10 nationalities, drawing on the consultancy’ s wide-ranging international salary monitoring.
The ECA then estimates the amount spent each year by a family of four on day-to-day goods and services in the home country. This expenditure covers items such as food at home, drink and tobacco, meals out, miscellaneous goods and services, car running costs, household durables and clothing. But housing, utilities and maintenance, holidays, luxury items and education are excluded.
Finally, the amount spent in the home country is adjusted by a cost-of-living index, producing a measure of the difference in living costs between home country and specified host country. Put simply, this figure shows the family's expenditure in the host country required to maintain their home country pattern of consumption.
For example, as the table below shows, a British middle manager earns £ 51,995 in the UK, and spends £13,778 on consumer goods and services in the UK. By contrast, he or she would need to spend as much as £15,331 in the USA and £19,390 in Switzerland to maintain the same standard of living.
Likewise, an American of equal seniority earns £ 66,159 on average in USA. The family spends £13,915 in the USA on goods and services and requires £ 14,314 to maintain their home country standard of living in Australia.
Cost of keeping-up home pattern of family spending on consumer goods and services
| Home country nationality | Gross Salary in Home Country £ | UK
£ | USA
£ | Switz
£ | Neth
£ | W Germany
£ | France
£ | Australia
£ | Hong Kong
£ | Singap
£ | S Africa
£ |
| British | 51995 | 13778 | 15331 | 19390 | 13526 | 15026 | 15199 | 12991 | 17953 | 15449 | 8612 |
| American | 66159 | 19631 | 13915 | 21944 | 16577 | 17904 | 18290 | 14314 | 21026 | 16495 | 10052 |
| Swiss | 72311 | 19396 | 18523 | 19587 | 15714 | 17502 | 17409 | 15690 | 22675 | 18918 | 10409 |
| Dutchman | 45143 | 12403 | 12559 | 15219 | 9599 | 11745 | 11895 | 10441 | 14510 | 12484 | 6866 |
| German | 58728 | 14587 | 14188 | 17139 | 12165 | 12026 | 13713 | 11957 | 17404 | 14788 | 8307 |
| Frenchman | 47098 | 16747 | 15634 | 19839 | 13900 | 15252 | 13704 | 13237 | 18994 | 16127 | 8825 |
| Australian | 39963 | 14885 | 13110 | 16642 | 12147 | 13086 | 13322 | 10382 | 16449 | 14007 | 7592 |
| Hong Kong | 59990 | 20887 | 20819 | 26697 | 17791 | 19740 | 20088 | 16845 | 18849 | 18541 | 10483 |
| Singaporean | 54685 | 22994 | 21436 | 27866 | 19571 | 21503 | 21523 | 17691 | 24026 | 16115 | 11092 |
| South African | 25425 | 12077 | 11181 | 14227 | 10145 | 11122 | 11233 | 9540 | 13667 | 11422 | 5693 |
Notes: exchange rate, December 1999.
Gross salary in home country based on middle management position.
Source: ECA International.
Survey details
Title: Cost of living survey.
Availability: call Emily Tuite, marketing and communications, ECA International in London on tel: 020 7351 5000.
Want to know more? ECA is an international human resources consultancy and information service. With a network of over 1,500 member and client companies, ECA has access to the policies and practices of organisations operating in almost every country, and across all business sectors worldwide. For further information jump to www.eca-international.com