Truth About Overseas Assignments & Expat Relocation Packages

Summary: If you’re being asked to work abroad by your employer how much can you expect from an expatriate relocation package?

I don’t know whether you believe this or not but apparently, once upon a time an expatriate on an overseas assignment for his or her company would receive a generous relocation package as a bonus and a thank you from their employer for making the move abroad.  Sounds almost unbelievable in this day and age when most employees are treated as an expendable commodity doesn’t it?

Indeed, nowadays generous expat packages are seemingly a thing of the past and employers have the cheek to assume that relocation abroad is all part of a career enhancing opportunity and that you should actually be thanking them for giving you the chance to work overseas!  In this article we examine the truth about overseas assignments and relocation packages for anyone contemplating an offer from their company to work abroad for a period of time.  We’ll show you what you need to negotiate for and how to go about it…

Back in the good old days of the late 1990’s when employers had more money than sense and the good times were still rolling, it was not uncommon for people to be moved lock, stock and barrel abroad and have all their expense covered and even receive a natty bonus on top in the form of anything from cold hard cash in the bank to cover the differences in costs of living between one location and another to specialist expatriate taxation assistance from an international accountant.

As soon as the stock market started to dive and employers started shedding staff and expenses, naturally the good old expatriate packages were one of the first things to be hit…so instead of offering you language lessons, integration courses, school fees for the kids and a generous financial package to relocate, employers managed to convince their employees that to be asked to move abroad on a work assignment meant that they were giving you the chance to broaden your cultural and career horizons and that you should be thankful…and quiet…and not rock the boat otherwise redundancy would beckon.

Well, now the stock markets have bounced back and corporate scandals are thankfully far fewer and further between than in the days of the Enron debacle for example, shouldn’t expatriate packages be re-introduced?  After all employers can afford to recompense expatriate staff?  Hmmm, well, in an inverse sort of way of looking at things – just like once a tax is introduced it’s never scrapped (think ‘solidarity tax in Germany’ for example), once a benefit or bonus is taken away it’s unlikely to ever be reintroduced.

So, the truth about overseas assignments and relocation packages is this – if you want to take an overseas assignment you’re going to have to work very hard at getting any form of relocation package at all. 

You are going to have to work backwards – consider what you really require in order to be able to make the transition abroad successfully and smoothly and then add in what you want in terms of a bonus or a benefit to give you the actual incentive to turn your life upside down and move - and then go to your employer and begin negotiations.

In terms of the inclusions you might like to consider, we would suggest you look at the following possibilities, discuss them with your spouse or partner and rate the option as ‘Essential’, ‘Nice to Have’ or ‘Not Required’ and then draw up your proposal list to take to your employer/HR department…

1) Moving costs covered – you will need to find money to cover everything from packing and shipping your personal effects and placing some things in storage to physically moving your family and any pets overseas to the new country of assignment, will your company assist and if so how much will they give you?  Work out how much you need so that any offer made can be compared against it to ensure you’re not left out of pocket.

2) Resettlement assistance – will you get a chance for you and your family to visit the country in question first, will you get advice about how to handle the move for the whole family?

3) Initial accommodation costs covered for a set period – you’ll need to initially rent a house or apartment before you can spend time looking for suitable long term accommodation, will you be helped financially?

4) Assistance in finding accommodation – will your company pay for an agent to help you locate suitable accommodation?

5) Language/cultural training for you or for you and your family – if you’re moving to a country where they speak a different language or where religions or cultural differences are strongly apparent and where you will need to learn to adjust you will need teaching and training to adjust, will this be made available for you and your family?

6) Family assistance – will your spouse and children get the emotional assistance they need to help with the transition?  Did you know that one of the main reasons why expatriate relocation assignments fail is because the accompanying spouse (often referred to as the training spouse) cannot adjust?  Does your company have anything in place to cope with this potential challenge?

7) School fees assistance – it will probably be a requirement that any accompanying children are privately educated at an international school so that their schooling is not affected – many such institutions are seriously expensive!  You’ll need financial assistance if you’re not to end up out of pocket.

8) Medical insurance package – make sure you get complete cover for you and your family from your employer – this is essential!

9) Incentive premium – your employer is asking you to turn your life upside down.  He is also asking that you turn your family’s life upside down as well and that you all endure stress and disruption – how much do you think this sacrifice is worth to your employer?

10) Cost of living adjustment – if you’re moving to a higher cost country you’ll need additional income to cover a higher cost of living for the duration of your assignment – others who are being relocated to a similarly priced nation usually incur higher living costs in the first few months as they adjust and learn where to shop and who to buy services from etc.

11) Taxation assistance and equalisation – if you have assets in one country and live, work and earn income in another this will affect your taxation situation, additionally taxation may be higher in your new country.  You need on hand advice about all this, and if you’re going to be harder hit by taxation because of your move will your employer offset this for you?

12) Exchange rate protection – consider the fact that currencies fluctuate; if you’re paid in one currency but are living in a country that deals in another currency you could be negatively hit by changes in a given currency’s value.

13) Immigration/visa assistance – this is totally essential and all employers should be willing to handle every single aspect of your immigration and visa requirements for relocation as well as those of your family.  If they are not willing to help you, you could end up in all sorts of trouble and in my humble opinion you shouldn’t trust your company because they obviously don’t value their staff.

14) Repatriation assistance – finally, if you’re being relocated overseas on a work abroad assignment for a fixed period, you’ll be repatriating at some point and will incur heavy costs associated with relocation once again.  What will an employer pay towards repatriation expenses?

Obviously if your boss is putting pressure on you to move abroad for the company you are in a better bargaining position than if you’ve applied for a transfer!  Use your common sense when it comes to negotiating your expatriate relocation package, don’t be left out of pocket but don’t demand so much that your employer not only turns you down but he sticks your name at the top of the next redundancy list for being a greedy trouble maker!  It’s a fine line!

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