UK 'most expensive' for employing expat staff

For the second year running, the UK has been ranked as the most expensive country in the world for companies to relocate staff, according to an annual survey from global mobility consultancy ECA International.

One pound coin on fluctuating graph. Rate of the pound sterling

David Sapsted

21 July 2023

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This year's MyExpatriate Market Pay Survey from ECA - primarily based on benefit allowances, cash salaries and tax treatment - also found that overseas employees in Saudi Arabia enjoyed the highest salaries, followed by those in Switzerland.

How much does it cost to employ expat middle managers in the UK?

According to the survey, the average cost of having a middle manager expat in the UK now stands at £351,992, up by 11 per cent on last year's figure, though salaries have risen by only five per cent to £63,250 and now represent only 18 per cent of the total expatriate package.Oliver Browne, remuneration and policy surveys manager at ECA International, said: “The rising cost of benefits is a key factor behind the UK retaining its status as the most expensive country in the world to send expatriates for the second year running, but exchange rates changes have also helped widen the gap with second-placed Japan."Soaring rents drove a 15 per cent increase in the overall cost of benefits, contributing to the cost of benefits for expatriates in the UK ranking highest globally for the second year running. Meanwhile, salary costs rose by five per cent, bringing the UK’s salary ranking down three places from last year to land in 28th place worldwide.”

Cost of employing expat managers: MyExpatriate Market Pay Survey

The cost-effectiveness of employing global people

The survey found that major contributors to the rising benefits costs in the UK included accommodation, international school fees and cars.Meanwhile, the survey found that expat salaries averaging £83,763 in Saudi Arabia were the world's highest, ahead of £77,760 in second-placed Switzerland, which ranks as the third most expensive country in Europe for expat pay and benefits packages, amounting to £212,880 per year on average.Mr Browne said: "Swiss salaries are consistently towards the higher end of the scale but so are everyday costs in most Swiss cities. Despite the higher prices, high salaries in the country mean locals are still well-off compared to their European counterparts."Furthermore, due to low taxes and businesses needing to pay less for employee benefits, it is still comparatively cheaper to relocate workers to Switzerland compared to the UK."

Gap widens between most expensive destinations

In the US, the strength of the US dollar has seen the nation rise seven places in the rankings and into the top 10 most expensive. Despite a slight fall in salaries of 0.4 percent over the year, the total package cost has risen by six per cent to £217,417 ($272,770)."Because many expatriates are paid some or all of their salary in other currencies, the strong dollar caused the average expatriate salary in the USA to fall," explained Mr Browne. "However, higher housing costs contributed to a ten per cent increase in the cost of benefits, meaning companies will have found it more expensive to relocate staff to the United States in 2022."In Japan, which ranks second in the global rankings, pay and benefits packages for expats saw a five per cent increase in local currency terms. However, ECA said that due to the weakness of the yen when converted to sterling for purposes of the survey, "the overall package is actually cheaper than last year, costing £295,062, and widening the gap between the top two most expensive locations in the world".

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