There are more than 50 million expats around the world and this number continues to rise.
The rapid growth in people working abroad can partly be attributed to the lifestyle benefits of living overseas, as well as the exclusive perks and benefits often offered to expats by their employers.
However, the key to having a successful expat career is bargaining for the right employment package. In this post you’ll find out what’s included in a typical expatriate package, so you can negotiate better benefits and get the most out of your new situation.
Do Expats Get Paid More?
According to research by Statista, expats living in San Francisco take home more than USD 200,000 annually, demonstrating that many expats do earn large salaries. However not all expats earn mega bucks - the same source reveals that the global average annual salary of expats worldwide is just USD 99,903.
This variation in expatriate pay is partly due to location - for example expats in San Francisco tend to be paid higher than expats working in similar jobs in Paris. However this pay variation is not only related to local factors such as supply and demand and the availability of employment in your new host country. Pay variation also acknowledges the difference in an expat’s lifestyle compared to their original home country, including cost of living, currency exchange rate, as well as the relative hardship of the post.
What Does a Typical Expat Package Include?
A typical Expat Package should fully compensate an expat for his or her decision to work abroad, and will vary depending on your industry, role and level or responsibility. Below are some examples of what you might expect to find in a typical expat package.
This should cover all the expenses you need to move to your new host country.
Relocation expenses typically cover costs for flights (including family if applicable), international removals, temporary accommodation, and visa and work permits. This can often come as a lump sum to enable you take care of any out-of-pocket expenses.
Typically your employer may also provide a local agent to assist with the relocation, including helping you to find housing options and set up your finances.
Moving to developing countries, such as some parts of Africa or Asia, can be considered 'harder' and less convenient because of issues around the local infrastructure, security, economy, healthcare, and other factors such as crime and pollution.
If you are being posted to what is considered a 'less desirable' location you may be offered an additional hardship allowance, which is normally calculated as a percentage of your pay. These allowances can sometimes be up to 30% of your base salary.
Housing allowance is also a common feature of an expatriate package and may include costs for basic utility services and domestic help. In some cases your employer may also provide accommodation for you, at least on a temporary basis when you arrive, to give you time to find somewhere to settle.
It's important to check that your housing allowance is sufficient to cover the cost of accommodation in your new country, as it may be considerably more expensive than what you're used to back home.
It is worth speaking to other expats via online forums to get a realistic view of housing costs, including how different neighbourhoods will impact your housing allowance (for example prime locations with access to the best schools and transport networks will likely be more expensive).
If you are moving your family with you overseas you may also be offered an education allowance for any children of school age.
This can be particularly important if an international school is the only viable option in your new host country because of concerns around language or ensuring your child can continue with the same curriculum.
While company cars are less common these days, you may be offered a monthly sum to cover the costs for your own car or alternative transport. Remember that if you are planning to purchase a car, your allowance should be sufficient to cover fuel costs and insurance.
It's also worth noting that in some parts of the world it is better to hire a driver instead of driving yourself, so you may need to factor this into your allowance budget.
Home Travel Expenses
A typical expat package will often include travel costs for you and your family to visit loved ones back home. Most packages usually cover the cost for a flight home once a year, although you may be able to negotiate for more depending on your personal circumstances. If you have a child staying in your home country to study, you may also need to factor in their travel costs during the holidays.
Of course you should also consider the other standard benefits you will get with your employment package such as annual leave, which may differ from home, and international health insurance to ensure your healthcare needs are met.
You may also be able to request other sweeteners to help you adjust to life in your new home, from gym memberships to local language courses, or even access to private members clubs.
How to Negotiate for a Better Expat Package
Before you take up an expat employment offer, make sure you understand what life will be like abroad and the day to day costs for you and your family so you know what your negotiation 'red lines' are.
Firstly, don’t begin financial negotiations until you’ve at least been verbally offered a job.
Secondly, don’t go in empty-handed. Do your research and see what is the standard package for your industry or company, and consider factors such as the the cost of living and relative hardship of the post.
You can find out more by connecting with other expats online through blogs, forums, and social media communities, including these two groups on LinkedIn - Expat Network and Expatriates and Global Mobility. Ask for advice and get honest opinions from expats in similar industries or those working in your new host country.
Thirdly, remember to be realistic - not all expats will be given generous benefit packages, and if you're a less experienced hire than you may have less leverage to negotiate.
Finally it's important not to lose sight of the bigger picture, as there is much more to moving abroad than high salaries. Weigh up your employment package against the other benefits you may gain from moving abroad, such as new career opportunities, language skills, better quality of life, and the opportunity to broaden your horizons...