The US may lead in AI and Asia may drive growth, but European cities still dominate liveability rankings, according to a recent assessment by Deutsche Bank. This, and similar studies, are shaping how CFOs set allowances, choose hubs and retain talent.
American tech is booming. Asian economies keep outgrowing the West. Europe, meanwhile, has posted anaemic growth for much of the past decade. And yet when multinationals ask, ‘Where will our people actually want to live?’, Europe often still wins out.
Liveability metrics increasingly feed into financial decisions
Of the 10 most desirable cities to live in the world for international professionals, eight are in continental Europe, according to the latest Deutsche Bank study Mapping the World’s Prices. The micro-state of Luxembourg topped this year’s list, with Amsterdam the fastest riser – gaining 12 slots to number three – and Frankfurt also advancing. By contrast, despite its role in the AI revolution, San Francisco ranked just 24th and New York 50th.
The Deutsche Bank survey considers factors such as purchasing power after rent, property prices, commute times, healthcare, pollution and climate, giving a day-to-day sense of how far salaries stretch once basic costs are met.
These indicators are weighted differently from Mercer’s Quality of Living index, which places greater emphasis on political stability, international schooling, housing standards and public services. Despite these methodological differences, the results align: Mercer’s 2024 study also has eight of the top 10 in Europe, led by Zurich, Vienna and Geneva.
Global mobility units
Why does this paradox matter? Because liveability metrics increasingly feed into financial decisions: compensation and benefits structures, mobility budgets, hub selection and retention strategy.
‘Global mobility is no longer just a logistical function, it’s central to strategic finance’
Most large accounting and advisory firms now maintain global mobility units dedicated to helping clients navigate these decisions. Their remit extends beyond benchmarking allowances: they advise on tax equalisation, payroll compliance, social security obligations, visa requirements and the logistics of setting up new hubs. For accountants, this has developed into a specialised career niche at the intersection of finance, law and strategy.
‘Global mobility is no longer just a logistical function, it’s central to strategic finance,’ says Gordana Muggler, executive director and head of global mobility at Forvis Mazars in Zurich.
‘Beyond tax factors, compliance, immigration matters and the labour law framework, clients should weigh airport connectivity, regional economic strengths and employee quality of life, including safety, cleanliness, healthcare and education. These factors directly influence employee satisfaction, retention and, ultimately, costs and performance.’
Why Europe comes top
The short answer: infrastructure, safety and services. Mercer’s index evaluates 39 factors across 10 categories, from political stability and healthcare to schools, housing and public transport, which systematically reward cities with reliable public services. Europe still leads in these areas.
Slagin Parakatil, senior consultant at Mercer, explains that Europe’s advantage stems from long-term public investment. ‘European cities have been developing transport, green spaces and healthcare systems over many decades. Meanwhile, other cities around the world are making significant investments to upgrade their infrastructure and develop AI hubs, with the goal of attracting more global investment. However, Europe’s established headstart in these areas is difficult to replicate, given the depth of its longstanding development.’
This isn’t just the territory of human resource departments anymore – It’s a ledger issue
Parakatil also cautions that the margins separating cities are razor thin. ‘Competition at the top is like an Olympic sprint – the difference between Zurich, Luxembourg or Frankfurt may come down to tenths of a point. The same goes for US cities. Boston ranks highest there, but Chicago and New York are not far behind, even if they don’t make the global top 10.’
Accounting for liveability
For CFOs, this isn’t just the territory of human resource departments anymore – it’s a ledger issue. Compensation strategies are now often tied to location-specific indices. Accountants and payroll teams translate Mercer’s Quality of Living rankings into net-of-tax packages. Tax advisers assess relocation incentives. And mobility professionals balance salary-after-rent data against corporate pay bands.
‘Not every company can afford Zurich,’ Parakatil notes. ‘Only industries with high value added per employee, like finance or pharma, can make sense of the costs. Many Swiss companies in these sectors do so because of the stability, talent and reputation Zurich offers.
‘Similarly, global tech giants have established hubs in Zurich, valuing access to a highly skilled, multilingual workforce and proximity to European markets, despite the high costs.’
Using liveability data in location strategy allows employers to retain talent without inflating compensation
Others may look to countries like Portugal or Eastern European nations, Parakatil argues, where the overall package of costs and liveability is currently more balanced. And after Covid-19, companies have become more aware of the importance of diversifying operations to minimise concentration risks.
For employers, the advantage of using liveability data in location strategy is clear: it allows them to retain talent without inflating compensation. Employees posted to Vienna or Amsterdam may feel better off, even on a lower salary, than peers in New York or San Francisco, once housing costs and quality-of-life factors are considered.
Navigating the differences
Mercer and Deutsche Bank sometimes diverge. Luxembourg, for example, tops Deutsche’s index, helped by factors such as free public transport and high net purchasing power, but ranks lower in Mercer’s, which places more weight on expat services and global connectivity, including airport hubs. Zurich, meanwhile, is number one for Mercer thanks to stability and services, but drops in Deutsche’s list due to very high living costs.
In short, Mercer tends to reward cities with strong infrastructure and expat amenities (eg Bern and Basel in Switzerland), while Deutsche favours net income and environmental factors (eg Amsterdam and Luxembourg).
‘Liveability directly impacts employee satisfaction, productivity, and thus costs and success’
Parakatil notes that companies often combine different indices when planning assignments: Mercer’s data provides a structural view of stability and services, while Deutsche Bank’s survey highlights day-to-day purchasing power after rent. Used together, they offer a more rounded picture of costs and quality of life across locations.
Muggler agrees, but warns against overreacting to short-term fluctuations. Zurich fell six places last year and Berlin dropped 19, yet she says their fundamental appeal endures.
‘Rankings fluctuate in the short term, but in the long run, quality of life in Zurich remains stable. Zurich is still considered a safe choice for international assignments, thanks to its high quality of life, excellent infrastructure, political and economic stability, and international connectivity.
‘For foreign employees, international schools, recreational opportunities, safety and the healthcare system are also crucial. All of this makes Zurich an attractive location for work and living,’ says Muggler.
Implications for finance teams
The rise of liveability data has real consequences for finance professionals:
- Payroll and tax: accountants must model net compensation across borders, factoring in tax, housing and social contributions.
- Policy design: shadow payroll, tax equalisation and benefits harmonisation all rely on quality-of-life metrics.
- Location strategy: Mobility teams and CFOs must weigh talent access, incentives and liveability in expansion plans.
This shift has brought accounting and mobility specialists closer together. As Muggler notes: ‘Liveability directly impacts employee satisfaction, productivity, and thus costs and success.’ For finance professionals, that means advising not just on numbers, but on the places where employees live and thrive.
