EXPAT PACKAGES BECOMING LESS COMMON IN ASIA
In the past, expatriate packages in Asia have typically included a wide range of benefits such as housing allowances, education reimbursement, tax equalization and car allowances. However, cost-cutting measures resulting from the recent global economic downturn have caused many companies to reduce expenditures on excessive expat packages.
It is becoming increasingly common for foreign nationals - including Asian returnees - to accept local or so-called "local plus" packages for positions in Asia. This is especially true in more developed cities such as Singapore, Hong Kong and Tokyo. A recent survey by a Singaporean consulting firm showed that around one in five expatriates working in Singapore is now being paid on a local package. This figure has increased by nearly 15% since a year earlier.
Expat packages in less-developed countries have often also included a full-time driver with a vehicle. Another survey conducted recently by ORC Worldwide showed that expatriates residing in Asian cities including Bangalore, Bangkok, and Jakarta cite traffic congestion as the biggest challenge to living in these cities. The survey showed that, while only around 10% of expatriates in Singapore and 15% in Tokyo were provided with a car and driver as part of their compensation packages, over 60% of expat packages in Mumbai and Banglaore included this benefit.
Expat packages may slowly be disappearing, but foreign companies must still take into consideration the costs of hiring senior executives for their Asian offices, particularly in less-developed regions. In more expensive cities like Tokyo and Shanghai, on the other hand, many expats may request cost-of-living adjustments to mitigate the effects of rising prices for housing and other essentials. Total compensation packages throughout the region remain high. A recent study published in Insurance International News shows that more than 25% of expats living in Hong Kong, Japan and India earn more than US$250,000 per year (compared with only 16% of expats globally).