International Salary Negotiations
The international job market is messy and competitive. Consider carefully how you want to approach any international job search and don't assume anything.
The international job market is getting messy and competitive. The “gold-plated” expat packages of the past are really only given for internal relocation and specialty projects or consulting jobs with a fixed time-limit. This is true even for previously labeled “hardship” placements like Japan. Now there is a movement towards local-plus or equalization packages.
An offer in any other country
If you are being offered a full-time opportunity based in another country, you would likely be looking an equalization package plus some sort of hardship / housing assistance adjustment. A lot of what you can get will be based on how badly the company needs you and what is normal for that company.
Sometimes the best place to start is asking them to detail a suitable package based on their standard practice. Use that as a base point to negotiate. They may give you more than you would have asked for, and you won’t run the risk of scaring them with a big number.
The market trend is moving away from giving a separate “allowances” for transport or housing. Instead companies are just combining all the allowances into the base salary. This will not apply if the company is used to expatriating people and provides a specific range of choices for housing.
For example: 50,000 to 100,000 JPY per month could be an accurate target for a housing allowance in Japan, but walk-carefully, these sorts of benefits tend to change (and may not exist) depending on the industry and company practice.
Simply & Easy way to calculate a base-point for an equalization package
1) Start with what your new base salary would be if you accepted a job in your present country: Present fixed salary + 15% (average increase when moving to another job — can be more if your present salary is below the market average for your kind of role, or your skill set is high demand).
2) Then look at the cost of living difference between your country and the country you are moving to. Take your present monthly cost of living and compare it with a rough average cost of living in the new country. Best to look at rental + transport + insurance + food expenses. Also, use a market average for housing in a reasonable area. Numbeo offers a good rough reference point for relocation and country to country comparisons.
Most companies don’t let you compare based on central, high-cost districts. Example: in Singapore a high-end apartment can run into 10,000 SGD per month, but the average rental cost is around 1,800 SGD per month.
3) Finally, add or subtract the cost of living difference from the “New Base Salary”. Subtracting applies when you are moving from a high-cost country to a low-cost country. Adding when you go the other way. There are more and more people willing to take lower packages in countries where the cost of living is comparably lower and especially when tax burdens are lower.
Even if your overall gross package (pre-tax) goes down, you often make much more net in pocket (after-tax) in a low cost and low tax country.
Cost of Living Multipliers on the Market
In some situations, companies used to use a cost of living multiplier. “If you were to move from USA to Japan you would receive a package that is 2x” as an example of how multipliers are often misused. I wouldn’t recommend looking at any of the multipliers available. Instead try to get a rough idea of how much you would need to maintain your lifestyle in Japan in a reasonable place to stay. Google and a little bit of networking can likely get you more accurate information.
Hardship Adjustments
The market average for a hardship allowance in a reasonably developed country is around 20% added on-top of the New Base Salary. Again this is higher or lower depending on how much of a true “hardship” the posting is, and it is good to keep in mind that many companies are removing this all together in all but the most difficult environments (think war zone). Most metropolitan cities where you are likely to be posted or offered a role have a similar standard of living these days.
Consider local salary dynamics
Each country will have some variation in how they form packages. This is often influenced by tax policy and historic practice. Companies in Japan often stuff a package with different types of bonuses that are considered “guaranteed” but really they aren’t.
Many countries in Asia offer guaranteed holiday bonuses or wage supplements at the end of the year. When present, these are used to spread out the risk of larg(er) bonus payouts during the year.
Whenever possible, I would recommend a package with a higher basic and lower bonuses as this limits your risk-exposure to the company freezing bonuses.
Relocation negotiations take a long time
Be prepared for a long process. Salary negotiations for any relocation can take a long time and there may be points where the other party insists things are not possible; when really they are. If you can, ensure that you are negotiating with the most senior stakeholders in the team who have the ability to bend policy to bring you in. The amount that you can leverage and bend depends on how much the company needs you.