July 4, 2022 †
For six months, Amsterdam has become a simpler place to live for expats, according to Mercer’s 2022 Cost of Living Survey. The consequences for companies and expats in the Netherlands may be possible. Of the 227 world cities for expats, our capital no less than ten places to place 25 in the ranking.

In addition to the city of Hong Kong, which remains the most expensive residential location for expats, the top five consists solely of Swiss cities: Zurich (2), Geneva (3), Basel (4) and Bern (5).

Cost of living
Expats receive receive for compensation from the home country. This compensation is calculated with an indexation based on the difference in the cost of living between the two locations. Inflation and exchange rates directly affect the purchasing power of expats.
“The volatility caused by corona has been further exacerbated by the crisis in the Ukraine and has fueled the economy and illustrated their purchasing power and social stability,” said Ellen van Arenthals, Principal and Mobility Consultant at Mercer.
The increase in the cost of living in Amsterdam means that without adjustment of this indexation, expats will have a lower disposable income and therefore a lower purchasing power. The question is from expats who is worth staying in Amsterdam in these circumstances, especially now that remote working has become.



Consequences for employers
The current circumstances are having a major impact on employers, who in turn are rethinking the management of their globally dispersed workforce to stand another chance in the simple ‘war on talent’.
Van Arenthals: “For organizations, the financial well-being of employees is an internationally important driver in their ability to attract and retain employees in unstable times.”
The cost of living shows that the labor and economic conditions around the world are earlier than before. Companies must deal with the cost of international assignments in a time frame and demonstrate flexibility to allow a future for their staff to handle international tasks. With the cost of living in Amsterdam soaring, this premise that employers should pay their staff in the city more to keep them going could be costing, including the total temp costs.
Van Arenthals: “Employers need reliable and clear strategies to navigate volatile times through compensation packages for international employees. In doing so, they must harmonize the financial well-being of their employees as well as efficiency and transparency/equality. Failure to adjust international compensation strategies undermines the ability of organizations to attract, develop and retain key talent.”

Importance of currency fluctuations
Mercer’s research helps employers understand the importance of currency movements and assess inflationary and deflationary pressures on goods, services and accommodation. Employers are also assisted in determining and maintaining compensation packages for employees on international assignments and when they live abroad.
The cost of living in a location like Amsterdam can have a significant impact on its attractiveness as a destination for talent. Similar organizations are influenced by it when choosing a location to make their choices of transforming. Based on the possible costs, companies decide to withdraw their international staff from Amsterdam and place elders.
Van Arenthal: “It has become a lot more expensive in Amsterdam in a short time. It has of course had a high degree of influence, but also the gas prices and rental costs. Where expats were previously housed in Amsterdam, we now see that they are outside the city, for example. to live in the suburbs.”