What to Consider Before Accepting Your Executive Expat Compensation Package


Making a next career move can be an enormous step for any executive; with the added challenges of a new country, a new language and the possible relocation of your family, the stakes are much higher for would-be executive expats.

expat_dubaiLike with any life-changing decision, the first step is to do your research and gather as much information as you can, yet it can be difficult to know where to begin. That’s why we have provided a list of our top three considerations for potential executive expats.

1. Consider the Value of Your Financial Package

Although the days of executives procuring incredibly lucrative offers for overseas placements are long gone, there are still many high-value components of a typical executive expat offer: accommodation allowance, healthcare, relocation costs, annual or biannual trips home, and an education allowance for children.

In some cases, you may also be able to negotiate for your employer to help your spouse find work if they are joining you on your relocation assignment.

It is important to calculate the relative value of these relative allowances in the proposed country to ensure that you are getting a good deal. In fact, it is commonplace among savvy would-be expats to connect with existing expats to learn more about the cost of living and local market before agreeing to the financial package.

When negotiating your financial package, if you are relocating to an unstable economic environment, it could be in your best interest to request that at least a proportion of your salary to be paid in a major currency, to avoid negative finance repercussions.

2. Consider Your Accommodation Negotiables

An accommodation allowance is considered a core perk of any expat package. Many executives assume that the company will naturally provide an allowance that will allow you to maintain your current lifestyle abroad, including the level of housing provided. This is not always the case and should be researched thoroughly to avoid disappointment.

Understanding the realistic housing costs and where to live is intrinsic to a successful expat move and is information that can be easily gleaned from existing expats in the desired location.

Another accommodation factor to consider is the home that you will be leaving behind in your native country. If you are a home owner, your company may also be responsible for covering the financial costs of a management company to rent and maintain your property while you are away.

3. Consider Your Location Pay/Foreign Service Premium

A standard expat package will often include what is known as a ‘Foreign Service Premium.’ This is where your salary level is temporary heighted to compensate for the shift in your quality of living in your new location, as well as the inconvenience of having to move overseas.

These once generous payments are now much smaller, but still valuable for many executives. A typical foreign service premium for what is considered a lateral locational career move, for example from London to New York, would incur a premium of around 10 percent of your salary.

For areas where there would be a more drastic change in your standard of living to a ‘hardship location,’ for example Bangladesh, your premium would be reflective of this and could go up 60 percent. Following on from this, high-danger locations, such as Baghdad, will have even higher premiums, in addition to security allowances, personal drivers, armed vehicles and security personnel.

Therefore, it is important to do your due diligence on the level of Foreign Service Premium which is to be expected for your move in order to ensure that you are being fairly compensated by your potential employer.

Join us for more helpful tips, advice, information and guidance relating to executive expat opportunities during our upcoming webinar, Insider Secrets for Executive Expat Success. Click here to register today!

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About the author

This article was written by Lisa Marsh, Marketing Manager at the Association of Executive Search and Leadership Consultants (AESC).

About the Association of Executive Search and Leadership Consultants

Since 1959, the AESC has set the standard for quality and ethics in executive search and leadership consulting worldwide. Because AESC members must commit and adhere to the AESC's industry and government recognized Code of Ethics and Professional Practice Guidelines, clients can be assured that AESC members are able to serve as trusted advisors for their most important engagements. As the voice for executive search and leadership consulting worldwide, today the AESC is comprised of more than 350 member firms, representing 8,000 executive search professionals in 75 countries. To learn more about the AESC and its membership, visit www.aesc.org.

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