{"id":16523,"date":"2025-12-02T10:53:50","date_gmt":"2025-12-02T10:53:50","guid":{"rendered":"https:\/\/tst.wordpress.realogydev.com\/cartus\/uncategorized\/rising-inflation-and-importance-cost-living-allowance\/"},"modified":"2025-12-02T10:53:50","modified_gmt":"2025-12-02T10:53:50","slug":"rising-inflation-and-importance-cost-living-allowance","status":"publish","type":"post","link":"https:\/\/tst.wordpress.realogydev.com\/cartus\/insights\/blog\/rising-inflation-and-importance-cost-living-allowance\/","title":{"rendered":"Rising Inflation and the Importance of a Cost of Living Allowance"},"content":{"rendered":"","protected":false},"excerpt":{"rendered":"","protected":false},"author":26,"featured_media":16524,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"wds_primary_category":0,"footnotes":""},"categories":[23,37],"tags":[207,230,208,231],"class_list":["post-16523","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog","category-policy-and-program-guidance","tag-cola","tag-compensation","tag-cost-of-living","tag-inflation"],"acf":{"blog_type":"Long Blog","category_type":"blogs","dont_display_published_date_in_blog_landing_tile":false,"hero_image":16525,"story_section_topic":"","story_section_description":"","rich_text_content1":"As mobility professionals, we're used to the potential effect currency fluctuation can have on an assignee\u2019s pay, but inflation can be just as significant, and its impact is being felt more today than in recent years. Inflationary pressures are dominating news headlines, Twitter feeds, and daily conversations around the world, but what can a mobility manager do to meet these challenges?\n\nMany regions and countries are experiencing record-high inflation, and although some regions, like Asia, are faring well, many more are not. Take, for instance, my home country of Lebanon, which is clocking shocking hikes to the tune of over 200% (and still rising!), making its capital, Beirut, one of the most expensive places to work abroad. If, like me, you\u2019re based in the U.S., I\u2019m sure you\u2019ve felt the 7% inflation rate at the grocery store, gas pumps, and in other parts of daily life.\n\n","rich_text_content2":"

What can mobility managers do?<\/h3>While there is no one-size-fits-all answer for multinational organizations with employees on assignment, mobility managers should be prepared to examine existing practices and evaluate compensation structures and assignment allowances carefully on a case-by-case basis.\n\nMany companies leverage the popular balance sheet approach, which is rooted in the theory that administering this method ensures an assignee is no better or worse off than if they remained at the home location. However, there's also a mechanism to overcome these challenges and their risk to employees working abroad\u2014the cost of living allowance!\n\n","title":"","sub_title":"","sub_text":"Price inflation is measured using the Consumer Price Index (CPI), an internationally comparable measure from the perspective of the purchaser. It is a measure of price change in consumer goods and services such as food, clothing, gasoline, and cars.\n\n","display_primary_cta":true,"label_for_primary_cta":"","download_pdf_or_link":false,"download_pdf":null,"download_link":"","primary_video_or_image":false,"primary_image":null,"primary_video":{"video_title":"","video_type":"youtube","video_id":""},"rich_text_content3":"

The importance of a cost of living allowance<\/h3>A cost of living allowance (COLA) is the policy benefit payable to assignees while on an assignment that is above and beyond their established salary. It is designed to cover additional day-to-day living expenses in the host country, which may vary from city to city and whether the location is a large urban center or not.\n\nIt's crucial to understand the role a cost of living allowance plays in diffusing the effects of rising inflation. COLA counteracts the effects of currency fluctuation and inflation, but to be truly effective, allowances must be reviewed regularly to ensure budgets are in line with the most current currency and inflationary rates.\n\n","secondary_video_or_image":false,"secondary_image":null,"secondary_video":{"video_title":"","video_type":"youtube","video_id":""},"rich_text_content4":"","rich_text_header_with_bullet_points":"Following are key considerations when establishing a COLA at the start of an assignment:<\/strong>\n\n