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Here’s a breakdown of how these global cost of living increases can impact your program directly, and what you can do about it:

Understanding the Impact of Cost of Living Increases

When the cost of living rises, the overall expense of international assignments can skyrocket. Housing allowances, per diems, and other mobility benefits must be adjusted to ensure assignees can maintain their standard of living. However, these adjustments can strain budgets, especially when multiple locations are affected.

Higher living costs can also impact employee satisfaction. If allowances fail to reflect local realities, assignees may feel unsupported, and this can ultimately hurt engagement and productivity, and even lead to assignment failure.

Building Flexibility into Mobility Policies

Consider revisiting mobility policies to incorporate cost-of-living adjustments (COLA) and ensure packages remain competitive. Core-flex and tiered mobility policies allow for personalized support while managing costs.

Periodic reviews and updates to COLA allowances can keep packages relevant. For short-term assignments, implementing a lump-sum approach can help employees budget based on their unique needs. But remember to balance these approaches with the necessary support to ensure that flexibility does not compromise the employee experience.

Lean on Your Data

Relying on accurate, up-to-date data is essential for managing cost-of-living increases and understanding what elements of the move lifecycle need to be revisited. Conduct regular market assessments using reputable data sources to understand fluctuations in housing, goods, and services.

Tools like interactive dashboards and analytics can help mobility teams quickly identify trends, adjust allowances, and plan budgets effectively. Predictive analytics can also provide foresight on potential cost impacts.

Step-Up Employee Communication and Support

Naturally, during times of economic uncertainty, anxiety and relocation reluctance are at an all-time high. Comprehensive, transparent communication is vital to help offset this and keep your talent strategy moving forward. Proactively share information with assignees about how cost-of-living increases may impact their assignments and outline available support options.

Consider providing access to local experts or resources to help assignees navigate high-cost locations. Virtual support tools, pre-departure sessions, and ongoing consultations can make a significant difference in setting realistic expectations, resulting in smoother transitions for mobile employees and their families.

Re-evaluate Housing and Benefits Packages

The impacts of soaring housing markets are being felt on a global scale. The median home price in Dublin, Ireland has risen 75% in the past decade, and the average rent has doubled within this same period. In cities in Australia, India and Singapore, high living costs are pushing companies to explore innovative housing solutions, such as co-living spaces and housing allowances.

Other alternatives, such as serviced apartments, regional hubs, and remote work options, can reduce expenses for employees navigating scorching-hot real estate markets. Adjusting benefits packages to include utilities or transportation allowances can also provide targeted support.

The Bottom Line

Cost-of-living increases are a reality, but with a thoughtful, strategic approach, you can foster an agile mobility program that continues to attract and retain top talent while managing costs.

Aim to revisit policies regularly, benchmark against industry standards, and leverage data-driven insights. Most importantly, be open to sharing these insights with assignees—market shifts will impact them directly, and clear, proactive communication will ensure that they feel informed and supported.

 

Editors Note: Tariffs, Soaring Costs, and the Mobility Impact

As on-again-off-again tariffs send financial markets whipsawing, consumers are still clutching their wallets: While some tariffs were paused on Wednesday, a 10% tariff remains on virtually all products imported to the United States, and more than half of Americans (57%) oppose it, according to new Ipsos polling. Consumers also understand that the tariffs will hit their bottom lines directly: 73% say they expect prices to increase for the items they buy every day as a result. The tariffs have also led to discussions about the impact on global mobility, with potential shifts in the types of talent moved and the regions affected.

No doubt, the impact of tariffs is likely to have a downstream effect on pricing, which in turn impacts the cost of living in virtually every corner of the world. Companies will be well served to conduct more frequent periodic reviews to ensure the financial security of employees on assignment or in the midst of a move to mitigate significant negative impacts.