Here’s How Inflation Is Affecting Employees Around the World

A global look at the rising costs to work—and who is expected to pay for them.

With inflation raising the price of things such as food and gasoline, employees are being forced to spend more of their paycheck just to be at work. If companies want to attract and retain top talent, finding ways to mitigate or share these work costs with employees is becoming increasingly critical.

Inflation isn’t being felt the same everywhere, however. That’s why—with help from Capterra’s 2024 Cost of Work Survey, which collected data from 2,716 employees across 11 countries—we’ll uncover which areas of the world are experiencing inflation the worst, what expenses are hitting the hardest, and how employees expect these costs to be covered by their employer.*

Using this data, HR leaders can figure out the best cost mitigation strategies to implement based on where their employees are, whether they expect those employees to come to the office or not, and more.

Australian employees have been hit the hardest by inflation

Relevant stat: 75% of employees in Australia say their costs to work have increased in the last year—the highest rate of any country in our survey.

While a majority of employees in most of the countries we surveyed said their costs to work have increased in the last year, no one has been affected more than employees in Australia. There were only two countries where more employees said their costs to work had stayed the same or decreased during this time: Japan and Spain.

We chalk up this reduced impact of inflation on work costs in Japan and Spain, in part, due to how employees get to work in these countries. At 45% and 41%, respectively, Japan and Spain have among the highest rates of employees using public buses or trains to commute to work—a mode of transportation that hasn’t seen the same rise in prices as all the costs associated with a personal vehicle. Spain and Italy are also the most likely to have employees who walk to work, again reducing costs.

Australia, on the other hand, has been hit particularly hard by supply chain disruptions and higher shipping costs, and thus has seen their price for things such as food and gasoline increase more than other countries. Making matters worse, 71% of employees in Australia say their salary or wage has not kept pace with these increased costs—which was only behind France (79%) and Italy (75%) among the countries we surveyed.

The most common work cost increase around the world is groceries

Relevant stat: Except for Japan, the most mentioned work price increase in every country in our survey is groceries.

Climate change, crop and animal disease, and supply chain shocks are all impacting food prices, which is causing groceries to be the most common inflated work cost in every country but Japan (where more employees say the price of utilities when working from home has gone up than food).

With 95% of employees reporting higher prices, the United Kingdom (U.K.) is feeling the effects of increased grocery costs the most.

Besides groceries and utilities, workers around the world also cite gasoline, child care, and pet care as some of the top categories where they have seen their costs go up.

France, Canada, and Mexico would retaliate the most if work costs became too much

Relevant stat: 70% of employees in France would ask for a raise if they felt their costs to work were unreasonable, while 68% of employees in Canada and Mexico would look for a new job.

Emphasizing the importance of acting on inflated work costs, employees across countries in our survey say they would react poorly if they felt their costs to work were unreasonable:

• Besides Japan (39%) and the U.K. (48%), a majority of employees in every other country we surveyed said they would ask for a raise if they felt their costs to work were unreasonable. Employees in France (70%) are the most likely to ask for a raise.

• Besides Brazil (33%) and Japan (37%), a majority of employees in every other country we surveyed said they would look for a new job if they felt their costs to work were unreasonable. Employees in Canada and Mexico (68% each) are the most likely to look for a new job.

How employees believe onsite work costs should be split

Relevant stat: A majority of employees in all the countries we surveyed believe employers should pay for the cost of parking. Conversely, employees in every country overwhelmingly believe they should cover the costs of pet care.

To better understand how employers can help their employees mitigate work costs, we gave respondents eight different costs associated with commuting to work and asked them if they believe employers should pay for this, employees should pay for this, or if the cost should be shared between employer and employee.

The costs most employees believe employers should cover are:

1. Parking: A majority of employees in all the countries that we surveyed believe employers should pay for the cost of parking. In fact, parking was the top cited commuting work cost preferred to be covered by employers in Canada, France, Germany, Italy, Mexico, the U.K., and the U.S.

2. Uniforms: The top choice in every country we surveyed is for employers to cover all the costs for uniforms or other clothing required by company dress code.

And the costs most employees think should cover themselves are:

1. Pet care: Employees in every country overwhelmingly believe they should cover the costs of pet care.

2. Child care: While the most popular choice in every country we surveyed was for employees to cover the costs of child care to be at work, it’s worth noting that child care was the most popular cost to be shared between employers and employees in Brazil, Canada, Germany, Italy, Japan, the U.K., and the U.S.

For the other costs, opinion varies by country: 

1. Gasoline: Employees in Brazil, Germany, Italy, Japan, Mexico, and Spain most often believe employers should cover the cost of gas. In Australia, the U.K., and the U.S., employees most often believe they should cover the cost of gas. France is the only country where the preference is for employers and employees to split the cost of gas.

2. Toll roads: In Australia, Canada, the U.K., and the U.S., the preference is that employees pay for toll roads. In every other country, it’s preferred that employers pay for toll roads.

3. Public transportation: Employees in Brazil, France, Germany, Italy, Japan, Mexico and Spain would prefer for employers to pay for public transportation. In every other country (Australia, Canada, the U.K., and the U.S.), employees think they should pay for public transportation.

4. Meals and/or snacks: In Brazil, France, Germany, Italy, and Spain, employees prefer employers to cover all the costs for food while at work. In Australia, Canada, Japan, the U.K., and the U.S., employees would prefer to cover the costs for food themselves. Mexico is the only country where the preferred choice is for employers and employees to split the cost of food.

North America leads the way in return-to-office (RTO) resistance

Relevant stat: A majority of employees in Canada, Mexico, and the U.S. would prefer to be fully remote.

We find that employees in North America are the most opposed to being in an office or other workplace full-time. 

In fact, Canada (54%), Mexico (53%), and the United States (52%) are the only countries in our survey where a majority of employees say they would prefer to work remotely the entire time.

Conversely, close to half of employees in Japan (46%) say they would prefer to work onsite the entire time. For the rest of the countries in our survey, a hybrid approach is what’s most often preferred.

How employees believe remote work costs should be split

Relevant stat: Home internet is the most divisive remote work cost: Two countries in our survey believe employers should pay for home internet, three countries believe employees should pay for home internet, and six countries believe this cost should be split.

Because remote workers incur their own costs to work, we also gave the employees in our survey six different costs associated with working from home and asked them if they believe employers should pay for this, employees should pay for this, or if the cost should be shared between employer and employee.

The costs most employees believe employers should cover are:

1. Computer and peripherals (e.g., mouse and keyboard): A large majority of employees in all the countries we surveyed believe their employer should pay for their work computer and any necessary peripherals.

2. Office equipment and supplies: Most employees in every country we surveyed believe their employer should pay for home office equipment and supplies. 

3. Mobile phone: In every country but the U.S., employees believe their employers should pay for their mobile phone. The U.S. is the only country where employees would prefer to pay for their mobile phone.

And the cost most employees think should cover themselves are:

1. Utilities: Brazil is the only country where employees believe their employer should pay for their utilities while working from home. In every other country, employees believe they should cover this cost themselves.

However, there are two costs where the opinion is split: 

1. Home internet: In Brazil and Japan, employees would prefer for employers to pay for their home internet. In Germany, Italy, and the U.K., employees believe they should pay for their internet. In every other country (Australia, Canada, France, Mexico, Spain, and the U.S.), the preference is for this cost to be shared.

2. Home office furniture: Employees in Australia, Canada, France, Italy, Spain, and the U.S. believe they should pay for their home office furniture. Those in Brazil, Japan, Mexico, and the U.K. believe employers should pay for home office furniture. Employees in Germany are the only ones who split the vote between employees paying for this and employers paying for this.

U.S. workers are the most willing to accept a pay cut to work from home

Relevant stat: Close to half of U.S. workers (49%) would take a pay cut to work from home.

The preference for remote work differs around the world, and so does employee willingness to stay remote in exchange for a lower wage or salary.

While 40% or more employees in countries such as the U.S., Brazil, Italy, and Canada would take a pay cut to work from home, that number drops to 23% in France and 19% in Japan.

Use this data to create a targeted cost mitigation strategy

While our survey data reveals some commonalities between countries (e.g., all employees need help with food costs, all employers should pay for uniforms and parking), it also sheds some light on important differences. Knowing where inflation is hurting your employees the most, what work costs they’re not willing to take on anymore, and the consequences if you don’t act can help you and your team come up with the best talent management strategy to fight persistent inflation.

Whether it’s stipends, free food, adjusting compensation based on work location, or offering tools to help employees budget better, finding the right combination of solutions to mitigate work costs is increasingly critical to retaining top talent around the world.