Cities Where the Dollar is Weakest

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According to ECA International, the average price of 1 kilogram of rice in Tokyo is $8.47, and one dozen eggs cost $3.78. Dining in Western and Japanese restaurants is no cheaper—according to restaurant surveyor Zagat, dinner with a glass of wine plus tip in Tokyo costs $94, on average.

Seasonal Delicacies

"You can find reasonable things, but the quality expectation for food here is very high," King says. In addition to the careful preparation involved in much of Japanese cuisine, he says many people are willing to pay more when certain foods are in season—for example, peaches from Yamanashi in the summer.

Of course, Tokyo is not categorically expensive. The city is packed with noodle shops and yakitori stands offering grilled chicken on skewers. Midrange retailers such as Uniqlo and H&M (HNNMY:OTC) have become popular. The same is true in other cities: In New York, for example, hot dogs, pizza slices, and sandwiches are among the cheap eats in a city where Zagat estimates the average dinner with wine and tip costs $42.

Assignees can live on less, but when companies send talent overseas, "they don't want it to be a negative experience for anyone," says ERI's Brennan.

Scaling Down Benefits

Sending employees overseas (often along with their families) is a significant investment for any company, especially because compensation and benefit packages must cover employees' overseas expenses as well as such obligations as mortgage payments at home. Costly as cities such as Tokyo are, they often serve as regional commerce centers and remain critical to multinational companies; the need to move staff overseas remains fundamental.

Even in today's business environment, ECA International's Quane says, employers need to make compensation attractive enough for employees to take assignments, not move to competitors, while the employer can still make a return on investment. Many employers have recently tried to trim benefit packages while ensuring that the employee's core compensation remains attractive, he says.

Until about five years ago, overseas assignments were viewed by many as cash cows—an opportunity to enjoy a good standard of living overseas while saving some money. Today, "companies are striking the right balance," says Quane. Housing allowances and paid trips home, for example, have been scaled down, he says. Assignees who may have received an allowance for a two- or three-bedroom apartment may now receive an allowance for a smaller rental. Some packages are being localized to line up with local standards. In locations that have become unprofitable, some employees have been sent home.

"Talent is never in excess," says Brennan. "Anyone who is proficient and versatile and valued enough to go international is a valuable product." While paying for $90 meals and $50 DVDs may be expensive while the dollar is weak and business is soft, Brennan says in the long term, the right person can be the solution to turning things around.

Wong is a lifestyle and real estate reporter for Bloomberg Businessweek.

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