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Location Allowance – An ECA Global Perspective


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ECA Location Ratings report looks at the use of location allowances in compensating employees for adaptation and hardship when working in a new location.
Including an overview of how allowances are calculated and delivered, plus an in-depth look at the living factors assessed and how these change over time, this document is a useful guide to companies either using or considering using location allowances as part of their mobility policy.

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Location Allowance – An ECA Global Perspective

  1. 1. Location Ratings ECA Global Perspectives
  2. 2. Contents Introduction Use of location allowances ECA’s Location Rating system What factors are assessed and how? Variable factors Non-variable factors Total scores Location ratings around the world Understanding changes in location ratings and allowances Case study: the Arab Spring About the authors About ECA’s Location Ratings 3 12 4 11 12 15 22 24 30 44 37 43 ECA Global Perspectives Location Ratings
  3. 3. 2 © Employment Conditions Abroad Ltd 2013 Other ECA Global Perspectives now available to download from
  4. 4. Introduction 3 Remuneration for globally mobile employees needs to take into account many factors. Market rates, cost of living, tax liabilities and housing costs are some, but many multinationals also factor in an element of compensation for the change of location itself. Often referred to as a ‘location allowance’, this part of the compensation package needs to be as transparent and as systematically calculated as any other in order to provide reasonable, equitable and reviewable allowances. An international move will more often than not present a degree of challenge to an assignee and their family in terms of adapting to life in a new location. Differences in climate, language and culture are just some of the factors that will impact on the ease with which the assignee family will adjust to life in their new home. Other factors – such as personal security, the political landscape, the availability of medical care and the standard of facilities will have a direct impact on the quality of everyday life for all residents, regardless of their place of origin. Location or hardship allowance? Few people would argue that a hardship allowance shouldn’t be paid for an assignment to Kabul. But what about New York? A good location allowance system will take into account not only hardship but the level of adaptation required for an assignee going to live in a new location. A move from Singapore, say, to Kabul will present real hardship and obvious challenges and therefore clearly warrant an allowance. A move from Singapore to New York, however, will also merit compensation (albeit at a far lower level) for the not insignificant changes to lifestyle required. This is the reason ECA doesn’t tend to call location allowances ‘hardship allowances’, a name which may sound unreasonable for an allowance in some locations where in fact it is perfectly warranted. To provide a fair and objective basis for determining location allowances for all international moves, ECA has designed a consistent, systematic and flexible approach to quantifying the levels of adjustment required and difficulties likely to be encountered. The system looks at a series of factors which affect the living conditions of an assignee and accompanying family members and is built around set scoring criteria relating to those factors. This document will look at how the scoring system works, how locations compare to one another using these criteria, and how the system can be used to formulate a robust and credible location allowance policy. ECA Global Perspectives Location Ratings Questions? Please email us at or call us. Contact details on page 47. All location ratings scores and location allowances quoted in this document, unless otherwise stated, have been taken from ECA International’s 2012 Location Ratings survey. The survey comprises both feedback from expatriates on location and extensive research using government bodies, specialist agencies and other internationally recognised data sources. ECA provides assessments for 440 locations around the world on an annual basis. Updated location ratings scores and recommended allowances are published in November.
  5. 5. 4 ECA Global Perspectives Location Ratings © Employment Conditions Abroad Ltd 2013 Use of location allowances In a recent survey conducted by ECA, nearly two thirds of companies reported that they used a location allowance system when calculating salary packages for their mobile employees. Although perhaps more commonly associated with the home-based approach to calculating assignment pay, around a third of companies that use a host- based approach also provide for location allowances in their policy*. Location allowances are designed to financially compensate employees for the difficulties they may experience in adapting to life in a new location. They are not specifically designed to act as an incentive to encourage employees to go and work in another country; however, it is clear from our research that a significant minority do use location allowances for this purpose, as the chart below shows. Financial motivation to undertake an international move is traditionally provided through a separate mobility allowance or foreign service premium, although cost pressures and increasing expectation from employers that their people should willingly be mobile have seen a decline in the application of this incentive in recent years. That said, companies ultimately need a policy that will keep the right person in the right place, so it is unsurprising that as mobility allowances are removed other components of the remuneration package are being used to incentivise the move and the location allowance ceases to be purely a compensator. Indeed, 12% of companies pay a location allowance and mobility allowance combined into a single payment. * Home country approach – salary methodology that starts with the salary that would be paid for the expatriate's job if it were done in the home country. Usually a portion of the home net salary is indexed for cost of living differences and is added back to the remainder of the net, without indexation, together with extra mobility allowances, such as an expatriate or location allowance. Host country approach – salary methodology that applies the norms of the host country. The starting point may be the market rate for expatriates or for local nationals in that country, in which case additional allowances are usually paid to compensate for financial burdens over and above those of local nationals. 4% 32% 64% To compensate employees for adapting to a different environment To motivate employees to move to undesirable locations To spend on improving life in the host environment Reasons for paying a location allowance
  6. 6. 5 ECA Global Perspectives Location Ratings Questions? Please email us at or call us. Contact details on page 47. Many companies apply location allowances for policy types beyond the traditional long-term assignment for which they were originally designed. This again indicates its increasing use as an incentive to undertake an international move. ECA’s system for calculating location allowances is not intended to compensate employees for any specific costs incurred while on assignment, although 4% of companies consider this the main reason for paying them. Whilst the quality and availability of goods, services and accommodation may contribute to the overall quality of life in a particular location, adjustments for the specific costs of these items are generally considered elsewhere in the remuneration package. Similarly, the availability of suitable schooling for the children of expatriates is taken into account, but the actual cost of tuition fees is not. Neither is the location ratings system designed to cover or measure any costs incurred by expatriates when a crisis situation develops, such as extra security measures or costs relating to evacuation. The cost of international flights, for example, is not considered, although the assessment looks at the availability of international flight connections in order to measure the degree of isolation, in part in case such a crisis should occur. %ofcompaniesapplying Long-term assignment Short-term assignment Commuter assignment Permanent transfer Business trip 30% 20% 0 10% 40% 50% 100% 60% 70% 80% 90% 100% 90% 100% 90% %ofcompaniesapplying 30% 50% 40% 20% 60% 70% 80% 30% 50% 40% 20% 60% 70% 80% 10% 20% assignment Short-term assignment Long-term 10% 0 20% assignment Commuter assignment Short-term Business trip transfer Permanent Business trip Types of mobility policy in which location allowances are used
  7. 7. 6 ECA Global Perspectives Location Ratings © Employment Conditions Abroad Ltd 2013 Expressing location allowances The most common way to express a location allowance is as a percentage of the notional home gross salary, delivered as a net amount. The most usual alternatives are to pay a percentage of home net salary, or a fixed cash amount (varying by location) so that the same allowance is paid regardless of seniority. Just over a fifth of companies applying a percentage impose a ceiling on the allowance. It is far less common to specify a minimum allowance to be paid. Systems in use Over half of the companies applying location allowances use a banding system to define them. Typically, locations are grouped into five, six or seven bands and a recommended allowance assigned to each band, normally ranging from zero to 30% of gross salary, although companies apply a broad variation of bands and percentages to suit the specific needs of their organisation and mobile population. Interestingly, about 40% of companies do not use a structured system of scoring and bands to calculate their location allowances. In some cases this is because what the company refers to as the location allowance is actually a mobility incentive, calculated using a fixed percentage or allowance for all locations rather than a location-specific payment. Other companies generally devise what they consider to be an appropriate allowance for each location based on their own internal system, which may be as simple as sorting locations into two categories; those that qualify for a hardship payment and those that do not. 15% 14% 13% 58% As a percentage of home gross salary, paid net As a percentage of home net salary As a fixed amount for each location Other How is the location allowance expressed?
  8. 8. 7 ECA Global Perspectives Location Ratings Questions? Please email us at or call us. Contact details on page 47. This ad-hoc approach may be sufficient when managing a limited number of assignments to a handful of locations, but as the number of mobile employees, nationalities and destinations increases, so does the likelihood of the company having a more systematic approach to determining location allowances. By using objective and systematic location ratings to underpin their location allowance policy, these companies can be sure that they are treating their employees consistently, regardless of their location, and not being unduly influenced by subjective opinions about particular destinations. This defensible and robust approach provides companies with an objective framework with which to respond to challenges from employees and quantify improvements or deterioration in living conditions over time. Delivery of location allowances The large majority of organisations pay location allowances on a monthly basis rather than as a one-off payment at the beginning or end of the assignment or otherwise. This is in keeping with the original purpose of these allowances being financial compensation for adapting to a different environment rather than an incentive to move, funding for one-off set-up costs in a new location or a completion bonus. 9% of companies pay additional allowances on top of the location allowance to compensate assignees living in a very remote area or an area of extreme risk e.g. where there are high levels of violent crime, political instability or war (commonly referred to as “danger money”). Whilst security considerations are given significant weighting in ECA’s location ratings, no amount of money on its own can guarantee a person’s safety. Companies considering paying danger money to employees who have to work in extreme locations should think carefully before doing so; a more appropriate provision might be to ensure that suitable security measures are arranged. Location ratings are also used by organisations to identify locations of significant hardship where additional provision for rest and recuperation (R&R) could be required, in addition to formulating location allowance payments.
  9. 9. 8 © Employment Conditions Abroad Ltd 2013 ECA Global Perspectives Location Ratings Reviewing location allowances Half of companies review their location allowances every year, corresponding with the review of other elements of the expatriate salary package on an annual basis. It is interesting that 17% of companies review the allowances less frequently, or not at all after the initial calculation has been made, meaning companies who never review their allowances may be over-compensating employees for living in an environment that is becoming increasingly easier to adapt to. Some companies may well be comfortable with this arrangement, but in the reverse scenario where living conditions are deteriorating, it may be prudent to review the location allowance in order to ensure the continued success of the assignment. Later sections of this document will look in more detail at how location allowances can change over time. Also of note is the reasonable proportion of companies reviewing allowances on an ad hoc basis. These organisations are likely to revisit allowances when a crisis or change in environment happens, such as a natural disaster, civil unrest or sudden military conflict. When such events occur it is understandable that both assignees and administrators of the mobility policy may question whether the existing location allowance is a fair reflection of the new reality on the ground. In extraordinary cases, when a location is hit by a new and unexpected event or if an existing situation has escalated significantly, a review may be appropriate but in general increasing the location allowance in direct response to a crisis is an approach that should be used with caution. 21% 12% 12% 5% 50% Every year On an ad-hoc basis No review after initial calculation Every six months Every 2 - 5 years When do companies review location allowances?
  10. 10. 9Questions? Please email us at or call us. Contact details on page 47. ECA Global Perspectives Location Ratings In the immediate aftermath of a major event, modern 24-hour news reporting across multiple media can sometimes magnify the severity of the crisis and make it difficult to gain a true perspective of the conditions being experienced by people there. Situations tend to be fluid; security advice, for example, may change at short notice. A knee- jerk decision to increase allowances may leave companies with the challenge of how to withdraw the newly increased allowance from their employees if the situation abates rapidly. In ECA’s Location Ratings system, the likelihood of such an event occurring has usually already been accounted for in the location score. Even if the scores are reassessed following an event and are found to have increased, the increase may not be sufficient to push the location into the next allowance band. For example, the location rating for Sana’a, Yemen increased following the significant unrest and deterioration in security surrounding the Arab Spring of 2011, but there was no change in the recommended location allowance. The existing security situation, with other factors affected by it, was already bad enough in Sana’a for the allowance to be set at the highest possible level before these events took place. Depending on its nature and severity, a more appropriate response to a major event might be to take more practical measures such as evacuation or additional security provision. Phase-out of allowances As a location allowance is most commonly paid as compensation for adapting to a new environment, it follows that the need for this payment should decrease the longer the employee remains in the host location. In practice, other factors may come into play. In a recent ECA survey 57% of participants reported that they applied a localisation policy once an assignment had extended beyond a particular period of time, most commonly five years. Companies look to reduce the overall level of compensation or phase out specific elements of the package. Of the latter, more than half will immediately remove the main mobility-related allowances and benefits, including location allowances (assistance with host country schooling and housing costs are the exception). The remainder will generally look to phase them out over a year or more, but it is worth noting that nearly 10% never fully remove location allowances when they “localise” their assignees. Added to this, nearly two-thirds of companies with a localisation policy do not always apply it everywhere, and one of the reasons commonly cited is that the employee is working in a hardship location. A similar number report that the equivalent local salary may be so low that the employee would be unlikely to accept full localisation on those terms. In such cases, continuation of the location allowance may be required to keep the package at an appropriate level and the employee at post. ECA’s National Salary Comparison provides a guide to the differences in local pay levels between countries and can therefore be used to indicate the countries in which localisation is likely to be successful, depending on the originating country.
  11. 11. 10 © Employment Conditions Abroad Ltd 2013
  12. 12. 11 ECA’s Location Ratings are determined by researching a series of factors which affect the living conditions of an international worker and their accompanying family members. Each location is classified according to set scoring criteria relating to these factors. Locations are then grouped into bands according to total points score, and an appropriate location allowance recommended for the band. The higher the score, the greater the level of hardship and adaptability required, and thus the greater the location allowance recommended. The table below shows how a location’s score determines the recommended allowances. ECA’s Location Rating system Questions? Please email us at or call us. Contact details on page 47. Location Ratings Band ECA’s recommended score location allowance 0 – 50 A 0% 51 – 85 B 10% 86 – 125 C 15% 126 – 165 D 20% 166 – 205 E 25% 206 – 330 F 30% ECA Global Perspectives Location Ratings Assessments are carried out on individual cities rather than countries as a whole, as facilities and conditions can vary greatly within the same country. Whilst ECA’s recommendations reflect common practice, the system is designed to give companies the flexibility to define bands and allowances to suit their specific needs whilst remaining underpinned by the same objective scoring system. Companies may retain ECA’s bands but increase or decrease the corresponding allowance or redefine or change the number of bands. For example, companies that operate in a large number of particularly challenging locations, such as in the oil and gas sector, tend to raise the threshold at which allowances become payable by extending band A and increase the allowances corresponding to bands at the other end of the scale up to 50% or more.
  13. 13. 12 © Employment Conditions Abroad Ltd 2013 ECA Global Perspectives Location Ratings The factors assessed in the creation of ECA’s location allowances have been identified through consultation with clients and their expatriates. Each factor has a different maximum score in order to reflect its impact on everyday life and to weight its influence on the final score. A key feature of ECA’s approach is that it acknowledges that while factors such as air pollution and health facilities will have the same impact on all people living in a particular location, the impact of other factors will vary according to how the conditions in the destination location compare to the location of origin. An obvious example of this is language. The degree of adaptation required will be greater if the languages spoken in the destination country are different from those which are spoken in the home country. This unique approach means that a location’s overall score will differ according to the expatriate’s nationality, giving a more accurate reflection of the adaptation required. In this section we will look in detail at how ECA assesses the different factors that make up a location ratings score, both variable and non-variable. Factors that vary with home location as well as host There are five aspects of the ECA scoring system where elements of the score vary depending on the home location. What factors are assessed and how? VARIABLE FACTORS Climate LanguageEducation CultureExternal Isolation EducationEducation FACTORS VARIABLE Climate Language External Isolation FACTORS CultureCulture
  14. 14. 13Questions? Please email us at or call us. Contact details on page 47. ECA Global Perspectives Location Ratings Climate One of the most immediately apparent differences experienced by an expatriate when arriving in a new location might be the climate. ECA scores the level of adaptation required by comparing the climate characteristics in the home and host locations using an internationally recognised system of climate classification. Adapting to the extreme heat and aridity of the Saudi capital Jeddah will be more difficult when moving from Murmansk in northern Russia, than when moving there from Dubai, for example. This kind of adaptation can be physically demanding so the bigger the contrast in climate, the higher the score. Some elements of the climate score do not vary according to the home location as all people living there will be affected in the same way. The frequency, intensity and latest occurrence of natural hazards and disasters in the host location are examined. Life in Havana, for example, is often affected by high winds in hurricane season, affecting infrastructure and causing damage to property. The potential for this to occur is reflected in its location rating. Language Key to adapting to life in a new location will be overcoming any language barrier. Knowing the local language will not only help with practical matters when settling in to the new home, but will also reduce feelings of isolation. If the language spoken at home is different from that in the new location, points will be awarded. The language score also takes into account how widely spoken a common second language in either location might be. Culture Culture is hard to define and can mean different things to different people. For the purpose of scoring this for location ratings, ECA has refined the culture section into three areas directly affecting expatriates: governance, religion and human development. All aspects of the culture score will vary according to the assignee’s home as well as the place of assignment, and assessing these is not a question of decreeing that some religious or governmental systems, for example, are better than others; rather it is the degree to which similarities exist that is assessed. For the development part of the score, ECA references the United Nations’ Human Development Index, which assesses factors including life expectancy, level of education and income per capita. The closer the indices for the home and host location, the lower the score will be.
  15. 15. 14 ECA Global Perspectives Location Ratings © Employment Conditions Abroad Ltd 2013 Education Family-related issues are a major cause of failure for international assignments so education can be very important, contributing to a settled family on assignment. With the education score, ECA assesses the possibility for expatriate children to continue their studies at an international standard. International curricula and the age range of children taught in the international system, if present, are assessed. These elements are assessed regardless of the home country of the expatriate and are therefore not variable. It is the language element of the education score which varies depending on the languages spoken in the home and host locations. External isolation ECA assesses the distance between the home country and place of assignment to determine an isolation score. The greater the distance between the two, the greater the score. Locations without international flight connections will also score additional points here. Small islands in the Pacific or Atlantic oceans often have no direct flight connections to international destinations, if they have an airport at all. St Helena, for example, is a small, isolated island in the mid-Atlantic: “There are two ways of leaving the Island. Travel five days by ship to Cape Town or three days by ship to Ascension and onwards by RAF flight to the UK, when available.” St Helena based expatriate As an airport is planned for St Helena, it may be possible to reduce the external isolation score for this location in the future.
  16. 16. 15 ECA Global Perspectives Location Ratings Factors not influenced by the home location Many factors affecting daily life will affect people regardless of where they come from. The location scores for these elements, therefore, will not vary with the place of origin of the employee. Questions? Please email us at or call us. Contact details on page 47. NON-VARIABLE FACTORS Recreation Expatriate Community Health Socio-Political Tensions Internal Isolation News & Media Air Pollution Natural Hazards Personal Security Goods & Services Housing & Utilities
  17. 17. 16 ECA Global Perspectives Location Ratings © Employment Conditions Abroad Ltd 2013 China Beijing India New Delhi Chile Santiago Iran Tehran Mongolia Ulaanbaatar Air pollution Air quality is an increasingly hot topic as news headlines from locations such as Beijing and Tehran will attest. In these locations a combination of industrial emissions and heavy traffic has led to an unhealthy environment. Expatriate responses in ECA’s annual Location Ratings Survey provide illustrations of the daily impact. “The pollution impacts on everyday life. Exercising outdoors is not always possible; children are particularly susceptible to the pollution.” Beijing based expatriate The overall level, concentration and frequency of air pollution are assessed in this section. Some government bodies, such as the US Environmental Protection Agency, publish regular air quality measurements, although in other countries even official sources may not always be reliable. As with all factors, ECA looks at information from expatriates and independent sources to obtain a true and objective reflection of air quality levels. The diagram below shows the five top-scoring locations for air pollution. Research indicates that pollution in Beijing is still more severe than the other locations, but these are not far behind. Air pollution – high scorers
  18. 18. 17Questions? Please email us at or call us. Contact details on page 47. Health Health is among the most significant concerns for an expatriate and their family; it is one of the most heavily weighted categories for this reason. It is important to factor into a hardship assessment the quality and availability of a range of health facilities, as well as whether evacuation to a better-serviced location would be required in emergencies. Health risks also need to be considered. A location may have a high prevalence of malaria, for example, or a high prevalence of road accidents. Altitude can also be an issue; expatriates based in the Bolivian capital La Paz report that breathing can be difficult as the city is so far above sea level. Port-au-Prince provides a good example of the combination of factors which contribute to a very high score for health. The catastrophic earthquake which struck Haiti in 2010 worsened already poor health facilities. Combined with the high health risks caused by poor sanitation, prevalence of tropical diseases and dangerous roads, the overall assessment for health makes Port-au-Prince one of the highest-scoring locations. Haiti Port-au-Prince Iraq Basra Afghanistan Kabul Afghanistan Kandahar Afghanistan Lashkar Gah East Timor Dili Myanmar Yangon Liberia Monrovia Somalia Mogadishu Sierra Leone Freetown ECA Global Perspectives Location Ratings Health – high scorers
  19. 19. 18 Goods and Services The availability and quality of a range of goods and services are assessed for this section, broadly corresponding to those ECA prices for calculating cost of living indices. Expatriate feedback is an important source of information here. In locations which receive a high goods and services score expatriates often report that they have to bring in certain products themselves from home or use import companies. Some items, such as alcoholic beverages, may be completely unavailable by law and others unsafe for consumption. ECA’s scoring will reflect this. “I tend to bring in toiletries for me and my children when I travel. Some popular items can be found on shelves but can be expired or damaged and very expensive.” Freetown based expatriate Internal isolation Conditions within the place of assignment itself can have an impact on feelings of isolation as well as those accounted for in the external isolation section. In this section of the scoring ECA assesses the standard of the local infrastructure including public transport and communications networks. How easy is it to move around the host city, or even the host country as a whole? What are mobile phone or internet connections like? Is it easy for expatriates to contact home? Expatriates are asked to report on all these topics. “Vehicles available for public transportation are poorly maintained and very overcrowded. Drivers are extremely erratic.” Luanda based expatriate The Internal Isolation score for Luanda is relatively high as a result of poor public transport, although this is somewhat mitigated by reasonable mobile phone coverage. Internet coverage on the other hand is not highly regarded: “Internet connection is very poor and very expensive. Capacity problem and line often unstable and very slow.” Luanda based expatriate Assignee feedback is supplemented by research using mobile and internet coverage maps to arrive at an accurate conclusion and score. © Employment Conditions Abroad Ltd 2013 ECA Global Perspectives Location Ratings
  20. 20. 19 ECA Global Perspectives Location Ratings News and media The ability to stay informed of what’s going on at home, around the world, and in the assignment location is assessed for location ratings. However, this factor has a relatively low weighting as it is not necessarily something that will affect an assignee’s actual wellbeing. ECA assesses the availability of international news sources, as well as levels of media censorship. Given the nature of censorship, some expatriates may not even be aware of the degree of censorship in their location. Organisations such as Reporters Without Borders produce reports on press freedom which ECA uses to make an accurate assessment. Expatriate community This score reflects the relative size of the overall expatriate community in the host location. When an expatriate moves to a new location in a new country, especially if they are taking family with them, having an established expatriate network in place can help reduce feelings of isolation by the sharing of experiences and tips, and possibly providing home links. Recreation The availability of facilities providing activities for leisure is an important factor in the ratings as limitations to these will clearly have an impact on the lifestyle of an assignee and family. For this factor, ECA assesses a variety of amenities including cinemas, theatres, green space, sports and social clubs, museums, art galleries etc. Housing The cost of housing is nearly always compensated for elsewhere in the expatriate package so is not a factor contributing to location allowances. However, the quality and availability of housing suitable for expatriates is an important issue affecting hardship so a score is calculated based on this assessment. Large cities such as Paris, New York and London have a high standard of housing but due to supply shortages it can take expatriates some time to find a suitable property. In other locations, the type of housing available may be limited. The scoring in this section will recognise these scenarios. Utilities The overall standard and reliability of utilities, such as the water supply, electricity and waste removal, are assessed in this section. These are all services which might normally be taken for granted, but which can vary enormously by location and substandard provision of which will cause inconvenience and possible discomfort. Locations recently affected by a natural disaster often see this score increase as infrastructure is damaged. Other locations are affected by constant power cuts which can really impact on expatriates’ quality of life. “There is currently no power available and we rely on generators 24 hours a day. The situation has been like this for several months and there is no sign of any improvement. The generators are turned off for four hours every day to rest them.” Juba based expatriate Questions? Please email us at or call us. Contact details on page 47.
  21. 21. 20 ECA Global Perspectives Location Ratings © Employment Conditions Abroad Ltd 2013 Personal security Security issues are typically the first thing people think of when considering the difficulties of moving to a new location. It’s important to stress here that in ECA’s location ratings the personal security score relates to crime rather than terrorism, which is dealt with in the socio-political tensions section of the system. A wide range of crimes and potentially dangerous situations are assessed, recognising that expatriates can be specifically targeted because of their perceived wealth or influence. Levels of both violent and petty crime are assessed, as well as whether public transport is safe to use and whether the streets are safe to walk. Burglaries, car theft and kidnappings are looked at – in certain Latin American countries, for example, express kidnappings, where the targets are driven to ATMs and forced to withdraw money, are a not-uncommon hazard. This section receives one of the highest weightings in ECA’s scoring system – it is a subject on which expatriates feed back a great deal of information in the location ratings survey. ECA combines their feedback with other research using travel advice from government websites, specialist security consultants and local newspaper reports. “Burglary is a common occurrence. Electric fences, sensor beams, and panic buttons/armed response are all standard features of residential life. Gratuitous violence associated with crime is not uncommon.” Johannesburg based expatriate Socio-political tensions This section looks at wider concerns over instability or conflicts in a country, including terrorism and political, ethnic and religious violence. Scoring also assesses the potential for such incidents to occur so even a location experiencing a short period of peace will score if the underlying tensions indicate conflict may arise. It is the only section in the scoring system which assesses conditions in the country as a whole rather than just the specific city in question. Freedom of movement around the country is examined here. If expatriates require permission from the local authorities to travel to other parts of the country this may impact on feelings of isolation, resulting in higher hardship. Also assessed in this section is corruption and the extent to which expatriates are affected by it on a day-to-day basis. When the Personal Security and Socio-Political Tensions scores are combined, locations in the countries illustrated opposite are the highest scoring. Some may be surprised to see Kenya here, but crime rates in the capital city of Nairobi are very high and there has been a significant amount of political and ethnic violence in recent years. Security reports, press and governmental advice combine with feedback such as that opposite to result in a high score for Nairobi in this section of the system.
  22. 22. Afghanistan Yemen Iraq Kenya Somalia Palestinian Territories Haiti Pakistan Nigeria 21Questions? Please email us at or call us. Contact details on page 47. “There are high levels of threat from carjacking, armed robbery and burglary. Over the past two years, a number of my colleagues here have suffered attacks where firearms were used.” Nairobi based expatriate “There have been grenade attacks in Nairobi and other parts of Kenya every couple of months since I’ve been here. A building in the city was attacked by terrorists last week, apparently.” Nairobi based expatriate ECA Global Perspectives Location Ratings Personal security & socio-political tensions (combined) – high scorers
  23. 23. 22 ECA Global Perspectives Location Ratings © Employment Conditions Abroad Ltd 2013 Total scores When all factors have been assessed for a particular location, the scores for each are totalled to arrive at the overall location rating and recommended allowance. As the following example of two expatriates moving to Oslo illustrates, the results vary depending on the home location of the assignee. An employee assigned to Oslo from New York would not receive a location allowance using ECA’s system, whereas an allowance of 10% is recommended for an assignee from Beijing. The reason for the difference lies with the scores for some of the variable factors, highlighted below. The expatriate moving to Oslo from New York will experience less difficulty in adapting to the language and culture in Norway than an expatriate from Beijing would, as in Norway, English is widely spoken. The language factor also comes into play with the education score. Furthermore, the degree of geographical displacement is greater between Beijing and Oslo than between New York and Oslo. These differences mean the location ratings score is higher for the move to Oslo from Beijing than from New York, enough of a difference to push it into a higher allowance band. Assignment New York to Oslo Beijing to Oslo Factor Natural phenomena 5 5 Air pollution 1 1 Health 2 2 Language 5 10 Culture 0 16 Goods and services 0 0 External isolation 5 10 Internal isolation 1 1 News and media 0 0 Expatriate community 0 0 Recreation 1 1 Housing 2 2 Utilities 0 0 Education 0 5 Personal security 4 4 Socio-political tensions 0 0 Total score 26 57 Band A B Recommended allowance 0 10%
  24. 24. 23Questions? Please email us at or call us. Contact details on page 47.
  25. 25. Afghanistan - Lashkar Gah Canada - Vancouver Afghanistan - Kandahar Australia - Adelaide Afghanistan - Kabul Irish Republic - Dublin Somalia - Mogadishu Denmark - Copenhagen Iraq - Basra Switzerland - Bern Iraq - Baghdad Australia - Perth Pakistan - Karachi Australia - Canberra Korea DPR - Pyongyang Australia - Sydney Central African Republic - Bangui Netherlands - Eindhoven South Sudan - Juba Netherlands - The Hague From Los Angeles Highest scoring Lowest scoring Afghanistan - Lashkar Gah Switzerland - Lausanne Afghanistan - Kandahar Switzerland - Geneva Somalia - Mogadishu Luxembourg - Luxembourg City Iraq - Basra Belgium - Brussels Afghanistan - Kabul Switzerland - Basel Iraq - Baghdad Switzerland - Bern Pakistan - Karachi Belgium - Antwerp Korea DPR - Pyongyang Denmark - Copenhagen South Sudan - Juba Netherlands - The Hague Liberia - Monrovia Germany - Dusseldorf From Paris Highest scoring Lowest scoring 24 ECA Global Perspectives Location Ratings © Employment Conditions Abroad Ltd 2013 Location ratings around the world
  26. 26. Afghanistan - Kabul United Arab Emirates - Dubai Haiti - Port-au-Prince United Arab Emirates - Abu Dhabi Afghanistan - Lashkar Gah Qatar - Doha Afghanistan - Kandahar Monaco - Monaco Somalia - Mogadishu Denmark - Copenhagen Korea DPR - Pyongyang Oman - Muscat Iraq - Baghdad Spain - Las Palmas Papua New Guinea - Lae Switzerland - Bern Central African Republic - Bangui Belgium - Antwerp Liberia - Monrovia Netherlands - Eindhoven From Jeddah Highest scoring Lowest scoring Afghanistan - Lashkar Gah Singapore - Singapore Afghanistan - Kandahar Australia - Sydney Somalia - Mogadishu Australia - Brisbane Afghanistan - Kabul Australia - Adelaide Iraq - Basra Japan - Kobe Iraq - Baghdad Japan - Osaka Pakistan - Karachi Japan - Fukuoka Haiti - Port-au-Prince Japan - Nagoya Central African Republic - Bangui Australia - Perth South Sudan - Juba Monaco - Monaco From Hong Kong Highest scoring Lowest scoring 25 ECA Global Perspectives Location Ratings The tables show the ten locations which merit the highest and lowest location rating scores, and therefore recommended allowances, from the locations given. They reference ECA’s 2012 survey. The highest scoring locations present the biggest challenges to assignees, and the lowest present the smallest. Low-scoring locations are not necessarily ‘better’ than anywhere else. It is more accurate to consider these locations less challenging to adapt to for someone coming from the given home towns. An assessment of how ‘good’ a city is to live in might result in an entirely different list. Questions? Please email us at or call us. Contact details on page 47. Commentary overleaf
  27. 27. 26 ECA Global Perspectives Location Ratings © Employment Conditions Abroad Ltd 2013 The previous page illustrates the effect the home location can have on location ratings. Locations like Kandahar, Mogadishu and Baghdad are high scoring for all expatriates no matter where they come from, but there are some locations that make it into the top 10 for families from some cities but not others. Pyongyang, for example, scores less overall from Hong Kong than it does from Jeddah, Paris or Los Angeles, mainly because it is geographically closer and also because its culture, though different, is more similar to that of Hong Kong than to the other cities. These differences are marginal though; Pyongyang may not make it into the ten highest scoring locations for assignees out of Hong Kong but its score still falls into band F, for which the highest location allowance of 30% is recommended. At the other end of the scale, Vancouver is the lowest scoring location for expatriates from Los Angeles but does not feature in the list for expatriates from Paris, Jeddah or Hong Kong. Differences in language, culture and climate, coupled with the greater geographical distance, mean that Vancouver scores more highly for expatriates from the other cities, particularly those from Jeddah, where the differences are sufficient to produce a total score placing Vancouver in band B. For the other locations Vancouver is in band A, for which no location allowance is recommended. Relative geographical proximity and cultural similarities are also the reason why the complexion of the ten lowest scoring locations out of Paris looks so different from those out of Hong Kong. Holiday or hardship? Few people would dispute that an expatriate moving from Paris to Kabul will be eligible for some form of location allowance due to its well documented issues and the considerable amount of adaptation required. However, many may be surprised to learn that a move from Paris to several locations within the Caribbean, for example, will attract an allowance. These ‘paradise’ locations may be a dream destination for a two week holiday but the reality of living there for prolonged periods of time is rather different. The examples following illustrate why a supposedly attractive posting may actually warrant a location allowance. Location ratings around the world
  28. 28. 27 ECA Global Perspectives Location Ratings Questions? Please email us at or call us. Contact details on page 47. Dubai, UAE Dubai is often thought of as an expatriate haven – with warm weather, excellent recreational facilities and a large expatriate community. There are, however, considerable differences in culture that exist between many locations and the United Arab Emirates, and this is often the highest scoring aspect in ECA’s location rating assessment of Dubai. Living in an Islamic authoritarian state and becoming accustomed to different ways of dressing and social norms will require adaptation if you are arriving from Los Angeles or Hong Kong, for example. Whilst society may seem outwardly tolerant, expatriates in Dubai frequently comment on the lack of interaction with the local population and different attitudes towards women. Expatriates in Dubai are also subject to significant limits on their everyday activities for much of the year by the oppressive climate. During the summer months, temperatures frequently climb to over 40oC, and combined with a dusty environment, this makes trips to the beach or outdoor sport difficult. These limitations can be challenging for accompanying spouses and children in particular, curtailing opportunities for social interaction. St John’s, Antigua & Barbuda Antigua may be seen as an island paradise but life there can pose a number of difficulties for expatriates. For many common goods there is a limited choice or supply because they have to be imported. For non-food items, such as clothing, choice may be further restricted; boutique shops catering to tourists do not offer an appropriate range to year-round expatriate residents. Recreational pursuits, such as beach-based activities and nature walks may be excellent for holidays but there are no theatres and a restricted range of museums, cinemas and galleries. This is not surprising for a location of such a small size with a stable population of only around 25 000 people. A substantial number of points in the location ratings assessment for St John’s are given in the natural phenomena section. The location of Antigua & Barbuda means that it is vulnerable to hurricanes and tropical storms. The impact of dangerously high winds and flooding is not something that has to be considered in the majority of locations and a degree of compensation is warranted in this respect. While many health facilities are of a suitable standard for expatriates and common ailments can be treated easily, there is a lack of specialist doctors and hospitals. Therefore it is likely that in the case of a serious medical issue, evacuation will be necessary. Location allowances to Dubai From Band Recommended allowance Los Angeles C 15% Paris C 15% Jeddah A 0% Hong Kong C 15% Location allowances to St John’s From Band Recommended allowance Los Angeles C 15% Paris C 15% Jeddah C 15% Hong Kong C 15%
  29. 29. 28 ECA Global Perspectives Location Ratings © Employment Conditions Abroad Ltd 2013 Cape Town, South Africa Cape Town is one of the world’s great cities, offering a diverse range of activities and natural attractions. However, crime continues to be of critical concern for all visitors to South Africa. Although not quite at the level seen in Johannesburg, Cape Town scores very highly in the personal security section, recognising the significant risk to expatriates living within the city. Many types of crime occur in Cape Town, including violent crime, so it is necessary for expatriates to adopt strict security measures in their everyday lives. The extent and severity of the problem in Cape Town means that getting around at night time or using public transport is hazard prone and requires advance planning. Additionally, many residential properties suitable for expatriates are located in gated communities for extra protection, surrounded by barbed wire and connected to alarm systems, an environment many people would find alien. The considerable distance from all the locations given as an example here means that the score for external isolation is high, although not the maximum possible because the international airport in Cape Town has good connections. Berlin, Germany Many international assignees in Berlin will not receive a location allowance. An assignment from New York to Berlin, for example, has a location ratings score of just 19, and for a Madrid to Berlin move the score is 40, both comfortably in the Band A category, meriting no location allowance in the ECA system. However, there are also many examples where an international assignment in Berlin will require a considerable amount of adaptation and a location allowance is recommended by ECA. An expatriate coming from a location in the tropics will find the cooler climate of Berlin more difficult to adapt to than an expatriate from another location in Western Europe with a similar climate. Cultural differences for some expatriates will be relatively high. An expatriate from New Delhi, India, for example, will have to adapt to a location where a different language is spoken, a different religion dominates and where systems of governance are not the same. This move falls into Band B, with a recommended allowance of 10%. Location allowances to Cape Town From Band Recommended allowance Los Angeles C 15% Paris C 15% Jeddah C 15% Hong Kong C 15% Location allowances to Berlin From Band Recommended allowance Los Angeles A 0% Paris A 0% Jeddah B 10% Hong Kong B 10%
  30. 30. 29Questions? Please email us at or call us. Contact details on page 47.
  31. 31. 30 ECA Global Perspectives Location Ratings © Employment Conditions Abroad Ltd 2013 Understanding changes in location ratings and allowances Some organisations review their location allowances infrequently. This can cut down on administration but living conditions can and do change over time so an expatriate’s location allowance may no longer provide the level of allowance appropriate for the assignment. Looking in detail at scores for some example locations illustrates the point. Damascus, Syria – civil unrest and increase in scores In 2011, a number of locations across North Africa and the Middle East saw significant upheaval as the populace rose against incumbent regimes in events that came to be known as the Arab Spring. Unsurprisingly, conditions in some of these places deteriorated to such a degree that there were significant increases in scores and therefore recommended location allowances. In Syria, what began as a series of pro-reform demonstrations rapidly descended into civil war. The move from Moscow to Damascus, as illustrated opposite, shows how the scores add up to produce band changes and consequently increased allowances when such an event occurs. Unsurprisingly, the increase in score across the three survey periods has been driven predominantly by personal security and socio-political tensions, but other components of the score, such as education, expatriate community and internal isolation have also contributed. As the conflict worsened many expatriates were forced to leave the city and the expatriate community shrank drastically in size. It was therefore necessary for ECA to increase this element of the score as well as that for education; with fewer expatriate children in Damascus and an environment that was increasingly dangerous to operate in, international schools in Damascus have been forced to close. Therefore the score for education changed in the 2012 survey to the maximum possible to recognise this. Major events can have an immediate impact on a location ratings score and consequently the band that a location falls into. Many other locations have remained relatively stable over time, but in some locations small, incremental changes have occurred each year, culminating in a significant shift in score over time as the next two examples illustrate.
  32. 32. 31 ECA Global Perspectives Location Ratings Questions? Please email us at or call us. Contact details on page 47. 0 20 40 60 80 100 120 140 160 180 200 220 2010 2011 2012 ScoreonaMoscowbase BANDABANDBBANDC Socio-Political Tensions Personal Security Education Utilities Housing Recreation Expatriate Community News & Media Internal Isolation External Isolation Goods & Services Culture Language Health Air Pollution Natural Phenomena BANDDBANDEBANDF Combined score and band changes for Moscow to Damascus 2010 – 2012
  33. 33. 32 ECA Global Perspectives Location Ratings © Employment Conditions Abroad Ltd 2013 Tallinn, Estonia – continuing development and decrease in scores Over the last ten years there has been a major change in the location rating for an expatriate move to Tallinn. The fall in bands and recommended allowances has not come about as a result of one single, large-impact event, but as a result of decreasing scores across nearly all assessed areas, reflecting steadily improving services and conditions. The biggest changes in score have been because of the increasing democratisation of politics in Estonia and the investment in infrastructure, largely as a result of Estonia’s successful bid to join both NATO and the EU and subsequent entry into the Eurozone. Consequently, there has been a total cancellation of any score for socio-political tensions, and a reduction in score for personal security. Scores have also gone down for goods and services and recreation, reflecting improved choice and availability. Scores for utilities, decreasing steadily over the period, are now zero, and improved availability and standard of housing has resulted in a steady reduction in scores for this category too. Health has seen a marked improvement over the period and now merits similar scores to many other European locations. A combination of all these factors over an extended period has led to a marked reduction in recommended allowances.
  34. 34. 33 ECA Global Perspectives Location Ratings Questions? Please email us at or call us. Contact details on page 47. 0 10 20 30 40 50 60 70 80 90 100 110 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 ScoreonaNewYorkbase BANDABANDBBANDC Socio-Political Tensions Personal Security Education Utilities Housing Recreation Expatriate Community News & Media Internal Isolation External Isolation Goods & Services Culture Language Health Air Pollution Natural Phenomena Combined score and band changes for New York to Tallinn 2003 – 2012
  35. 35. 34 © Employment Conditions Abroad Ltd 2013 ECA Global Perspectives Location Ratings Monterrey, Mexico – economic development but increase in scores Generally, it is expected that most locations would see a gradual decrease in score as development and growth occur. However, as the location ratings score for a move from London to Monterrey demonstrates, this is not always the case. This expatriate move has seen its score increase by 36 points over ten years despite Monterrey now being Mexico's richest city and amongst its most developed, home to many Mexican companies as well as foreign multinationals. Most of the change in score is due to the significant increase in the personal security score. The graph shows how the majority of this change has occurred in the last four survey periods. Monterrey is situated in Nuevo Leon, a state which has seen an escalation in drug related violence. Whilst the majority of this occurs between rival gangs, car thefts, robbery and kidnappings are all a very real risk for expatriates based in Monterrey. Although personal security has deteriorated and this is the most significant contributor to the cause of the score change for Monterrey, other elements of the score have changed in a positive direction at the same time. During the survey periods shown, the goods and services score has decreased from 5 to 0, reflecting the improved quality and availability of goods and services in Monterrey. Similarly, education no longer warrants a score because of significant improvements over the period.
  36. 36. 35 ECA Global Perspectives Location Ratings Questions? Please email us at or call us. Contact details on page 47. 0 10 20 30 40 50 60 70 80 90 110 100 150 140 130 120 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 ScoreonaLondonbase BANDABANDBBANDCBANDD Socio-Political Tensions Personal Security Education Utilities Housing Recreation Expatriate Community News & Media Internal Isolation External Isolation Goods & Services Culture Language Health Air Pollution Natural Phenomena Combined score and band changes for London to Monterrey 2003 – 2012
  37. 37. 36 © Employment Conditions Abroad Ltd 2013
  38. 38. 37 ECA Global Perspectives Location Ratings Questions? Please email us at or call us. Contact details on page 47. Case study: the Arab Spring Screenshot showing location ratings bands and recommended allowances in the MENA region from ECA’s Location Ratings calculator The events that came to be known as the Arab Spring dominated news headlines in 2011 and 2012. Varying degrees of civil unrest and violence resulted in regime change in some locations and political reform in others. This has provided a big challenge for global mobility professionals and their expatriate populations across the Middle East and North Africa (MENA) region who have experienced, and continue to experience, different levels of short and long-term hardship brought about by these events. ECA’s Location Ratings scores can be used to provide a relevant quantification of the effects of significant events, like the Arab Spring, on quality of life and adaptation required by expatriates in each of the affected locations.
  39. 39. 38 © Employment Conditions Abroad Ltd 2013 ECA Global Perspectives Location Ratings Socio-political tensions across the region ECA’s Location Ratings scores for the countries affected by the Arab Spring have changed, and some more than others. The common trigger for these changes has been the civil unrest manifested in protests calling for democratic reform. The effect of civil unrest on the socio-political component of the Location Ratings scores for all the locations in question can be seen below. In Egypt and Tunisia, where the ruling regimes were overthrown relatively quickly, scores increased moderately in 2011 and stabilised at their new level in the most recent survey, 2012. Scores have yet to return to their 2010 level due to a continuation of heightened tensions and restrictions on movement, but this may change following the 2013 survey. In Bahrain and Syria where the ruling establishments, at the time of writing, have not been removed, the scores for socio-political tensions have continued to increase significantly. Libya is an extreme case where the outbreak of civil war resulted in the largest increase of the group in 2011. The country is now no longer in a state of war and the 2012 score reflects this, being the only one in the group to have decreased. In Yemen, where President Saleh eventually lost power, escalating violence caused the socio-political score to reach the maximum where it has remained since. The threat of assassination, kidnapping and other violent acts was already so high in Sana’a before the Arab Spring that the recommended allowance has not changed. Democratic reforms and improved scores The toppling of several long-standing regimes led to significant democratic advancements in Egypt, Libya and Tunisia. All have now held democratic elections to select their current leaders. For expatriates from most countries ECA’s relative culture scores for Cairo and Tripoli, which include a measurement of governance, decreased in the 2012 survey after peaking in 2011 when the Libyan civil war was on-going and Egypt was under transitional military rule. Tunis, on the other hand, witnessed this decrease in 2011, having held 2010 2011 2012 2010 2011 2012 2010 2011 2012 2010 2011 2012 2010 2011 2012 2010 2011 2012 Bahrain - Manama Egypt - Cairo Libya - Tripoli Tunisia - Tunis Syria - DamascusYemen - Sana’a Scores 25 20 15 10 5 0 (Maximum) Socio-political tensions across Arab Spring countries
  40. 40. 39 ECA Global Perspectives Location Ratings Questions? Please email us at or call us. Contact details on page 47. Constituent Assembly elections in October 2011, nine months after the ousting of President Ben Ali. Increased political and civil freedoms often go hand in hand with a less censored press and the news and media component of the Location Ratings score improved for both Tripoli and Tunis. Knock-on effects While Bahrain, Egypt and Tunisia witnessed different levels of expatriate evacuations at the height of their respective unrest, most assignees returned to their posts within a few months, or in some cases weeks. Expatriates have been slow to return to Tripoli, however, and many that have returned have done so without their families. Consequently, the score for the expatriate community there, as in Damascus, has increased. The reduced number of expatriates has also affected international schools in both locations, with few or no expatriate families creating demand for schooling and supply of teachers. The education scores for these locations have risen accordingly. Other consequences of conflict include damage to infrastructure and weakening healthcare and transportation systems, which are still starved of investment as governments struggle to prioritise funds for recovery. Almost all of the Arab Spring locations have had their health scores worsen. Shortages of goods and services have also affected some of the surveyed locations, as trade flows suffer from disruptions as a result of conflict or sanctions. It follows that civil unrest will lead to precarious security conditions and, as the figure below shows, the Personal Security score has continued to worsen across all Arab Spring locations since 2010. On the one hand, this could be interpreted as a direct trade-off between the stability of an autocratic regime for a more unstable democratic one, as increased criminal activity has been seen following regime change in Egypt, Libya and Tunisia. However, the same trend has been observed in the other locations in the region where regime change has not occurred, so is more likely to be a medium-term effect. 2010 2011 2012 2010 2011 2012 2010 2011 2012 2010 2011 2012 2010 2011 2012 2010 2011 2012 Bahrain - Manama Egypt - Cairo Libya - Tripoli Tunisia - Tunis Syria - DamascusYemen - Sana’a 25 30 35 40 20 15 10 5 0 Scores (Maximum) Personal security across Arab Spring countries
  41. 41. 40 © Employment Conditions Abroad Ltd 2013 ECA Global Perspectives Location Ratings Band changes Not all countries involved in the Arab Spring saw armed conflict, but scores – and recommended allowances – changed nonetheless. Cairo, Tunis and Manama are examples. The socio-political and personal security scores for Manama have increased to accommodate the unrest seen in Bahrain. While factoring in these increases, the ability of the ruling establishment to survive the crisis (at the time of writing) has protected other elements of the score from the increases associated with regime change. The large number of expatriates and the relatively moderate scale of evacuations have kept the Manama scores for education, isolation, utilities and expatriate community from rising substantially, if at all. Tension continues to simmer, however, and expatriates have expressed their concern about political instability in the country. The chart opposite shows how ECA’s Location Ratings score for Manama has been affected for a person relocating from Jeddah. In 2010 Manama fell into Band A of ECA’s Location Ratings for an assignee from Jeddah. The 2011 score increased significantly enough to push Manama into Band B, warranting a Location Allowance recommendation of 10% of gross salary. The lack of resolution to the problems in Bahrain has meant that no reduction in score was seen in any category in 2012. In fact, some areas, particularly personal security and socio-political tensions, continue to increase in score. Using a Jeddah base, a move to Manama remained within Band B in 2012. The potential for tensions to escalate in any location is accounted for in ECA’s Location Ratings score, which is useful to reflect the true tensions in places where hardship can be more subtle. This, of course, means that the effects of any incident on the score will be proportional to the threat already assessed. For example, a car bomb exploding in Baghdad will not immediately affect the score as the danger of this happening is already accounted for. On the other hand, a location which sees significant escalation of peaceful demonstrations into armed conflict would merit an increase. The fall-out from the Arab Spring will continue to challenge companies operating in the region in 2013 and beyond. Whilst some locations may soon be considered stable enough to merit a reduction in the location allowance, ongoing tensions in others will require the allowance to remain at current levels to reflect the potential for escalation into a more serious situation. It is not unusual for unrest to spill over from one country to another as weapons become readily accessible, security forces are busy on multiple fronts and dissidents gain courage and enthusiasm. The Arab Spring is no exception, with repercussions being felt in places like Turkey, Lebanon and Mali.
  42. 42. 41 ECA Global Perspectives Location Ratings Questions? Please email us at or call us. Contact details on page 47. 0 10 20 30 40 50 60 70 2010 2011 2012 ScoreonaJeddahbase BANDABANDB Socio-Political Tensions Personal Security Education Utilities Housing Recreation Expatriate Community News & Media Internal Isolation External Isolation Goods & Services Culture Language Health Air Pollution Natural Phenomena Combined score and band changes for Jeddah to Manama 2010 – 2012
  43. 43. 42 © Employment Conditions Abroad Ltd 2013
  44. 44. 43 ECA Global Perspectives Location Ratings Neil Ashman Senior Location Ratings Analyst Neil Ashman oversees ECA’s Location Ratings survey, reports and software. He also presents on location ratings at webinars and events, and regularly contributes articles to ECA’s Newsline publication in addition to advising clients on use of ECA’s Location Ratings information. Neil joined ECA International in 2002, working in the Country Profiles team, before moving to the Cost of Living team and later the Remuneration team. He also spent two years travelling extensively as an International Data Researcher, before joining the Location Ratings team in 2007. Neil graduated from the University of Bath with a Degree in Business Administration and has previously worked for British Airways, Hitachi and HSBC. He is currently working on new developments for Location Ratings products. Rebecca Darling Head of Production Rebecca is responsible for the production teams that research, analyse and publish the information forming ECA's core data offering, including cost of living, tax and social security, accommodation and benefits, location allowances and expatriate remuneration. In addition to ensuring timely and accurate publication of ECA’s data, she also works on the development of new product features and portfolios. Manager of Tax Services at ECA between 2002 and 2006, Rebecca then worked as a consultant at Ernst & Young before returning to ECA in 2008. During her time at Ernst & Young she gained extensive experience of cross-border tax treatment of share incentive schemes and managing the assignment lifecycle including calculating compensation, assignment letters, assignee briefings, vendor management, payroll and repatriation. Rebecca has an MA in Natural Sciences from Queens' College, University of Cambridge and is a member of the ATT. About the authors Questions? Please email us at or call us. Contact details on page 47. Additional content supplied by Rosalind Haville and Malek Fituri, Research Analysts.
  45. 45. ECA Global Perspectives Location Ratings 44 © Employment Conditions Abroad Ltd 2013 ECA’s Location Ratings System measures the quality of expatriate living conditions in 440 locations around the world and assesses the level of difficulty the expatriate will experience in adapting to a new location. This is a consistent, systematic and flexible approach to quantifying the levels of expatriate ‘hardship’ likely to be experienced, and facilitates the calculation and application of equitable allowances. The system looks at a series of factors which affect the living conditions of an assignee and accompanying family members and is built around set scoring criteria relating to those factors. Using independent research and feedback from expatriate families on location, there are eight major sections, each with a number of specific subsections, which are attributed a specific weight based on their relative level of influence upon everyday lifestyle: • Climate • Health • Language and culture • Goods and services • Isolation • Social network and leisure • Housing, utilities and education • Personal security and socio-political tensions Some scores take into account both the home and host locations (eg language and culture) and others, like health, look at the host only. Locations are classified by points score and grouped into bands accordingly. ECA recommends a particular allowance for each band, although companies can customise the banding system if they wish, and apply their own associated allowances. Location ratings come as part of standard subscriptions, or can be bought individually – online or through our Client Services. An online calculator is also available, which contains interactive reporting based on maps, and which can also be customised to work with your own policy provision. About ECA’s Location Ratings
  46. 46. 45 ECA Global Perspectives Location Ratings Use of this document This material is protected by copyright law. You may not copy, redistribute, republish or otherwise make available the material to third parties without the prior written consent of ECA. In the event that such consent is granted, you must not modify the material in any way, you must make aware of these restrictions any person to whom you provide any of the material and you must acknowledge ECA as the source of any of the material. The content of this document is for general information only and in the absence of specific advice from ECA International as to its application to specific circumstances ECA International is not responsible for any loss caused by reliance placed upon it. Other Global Perspectives available from ECA More documents like these, on subjects including Cost of Living, Tax, Accommodation and other factors for consideration in the management of international assignments, are available to download free from the Resources pages of ECA’s website at About ECA International ( ECA is the world’s leader in the development and provision of solutions for the management and assignment of employees around the world. Our highly skilled teams help to ensure that businesses’ international assignments operate efficiently and cost-effectively. Delivering data, expertise, systems and support in formats which suit its clients, ECA’s offer includes a complete ‘out-source’ package of calculations, advice and services for companies with little international assignment management experience or resource; subscriptions to comprehensive online information and software systems for companies with larger requirements; and custom policy and system development projects for companies who manage thousands of mobile employees around the world. Accessing data and information ECA’s services can be accessed online through a subscription to ECA data or on an ad-hoc basis through the online shop at www.eca- Purchasers can download sample documents and calculations prior to completing any transaction. Sample data, reports and calculations can be viewed free by registering to use the website. Additionally, ECA can offer a consultancy service providing a full support and advisory service to multinational clients. Questions? Please email us at or call us. Contact details on page 47.
  47. 47. ECA Global Perspectives Location Ratings 46 © Employment Conditions Abroad Ltd 2013 Data and services available from ECA Registered users of ECA’s website can access a number of reports and services online. Calculations and reports available to buy online Individual reports Calculations Accommodation Reports Location Allowances Country Profiles Gross-to-Net Daily Rates Net-to-Gross Expatriate Salary Management Survey Build-up Managing Mobility Survey Salary Trends Surveys Tax Reports Choosing A Salary System Online data, tools and information available by subscription See the full range of available online data, tools and information according to your subscription (or trial data if you haven’t subscribed) in the MyECA section of the website, including: Reports Calculators Accommodation Reports Build-up Benefits Reports Cost of Living Cost of Living Reports Location Allowances Country Profiles Short-term Allowances Country Security Reports Tax Daily Rates Exchange Rates Expatriate Market Pay Reports Inflation Rates Labour Law Reports Location Ratings Salary Trends Surveys Social Security Reports Tax Reports
  48. 48. 47 ECA Global Perspectives Location Ratings Training and conferences Browse and book online for ECA’s training courses, discussion groups and conferences. Surveys Take part in selected ECA surveys and get the results free. See Surveys in the MyECA section of Further services available from ECA ECA’s world-class data and years of experience in the international assignment arena mean that it is perfectly placed to provide a broad range of solutions designed to your particular needs, including: • policy design and review • assignment costings • individual salary calculations and assignment letters • benchmarking surveys • customised data • system design and implementation • standard and custom software, programs and applications. For more information, please see or contact us. Contact us For help, queries or to find out more about ECA’s services, please visit, email or call us: London +44 (0)20 7351 5000 Hong Kong +852 2121 2388 New York +1 212 582 2333 Sydney +61 (0)2 8923 5400 @ecaintl ECA International Questions? Please email us at or call us.
  49. 49. ECA Global Perspectives Location Ratings 48 © Employment Conditions Abroad Ltd 2013
  50. 50. ECA International London +44 (0)20 7351 5000 Hong Kong +852 2121 2388 New York +1 212 582 2333 Sydney +61 (0)2 8923 5400 Join the conversation! Follow us on twitter @ECAintl LinkedIn and