Posted on July 14, 2009 at 7:07 PM
Let me paint a picture for you. It’s 2008, and you’re an expatriate working in Hong Kong. You receive a hefty housing allowance of US$6,000) a month, your employer, a top international law firm, is paying for your kids’ education at the best international school in the area. Weekends are filled with free trips home to the States, and afternoons lounging at an exclusive country club. You spend money like water, since there always seems to be more. You may work 100 hours a week, but at least you don’t have to drive anywhere—the company-provided chauffeurs take care of that.
Fast forward to 2009. Your housing allowance has been reduced and rolled into your salary and you’ve started footing that international school bill. You no longer belong to that country club, and those free trips home are now only a memory. Oh, and that chauffeur? He’s long gone.
According to a recent Reuters article, many Wall Street banks, hit hard by the recent financial crisis, have started slashing expat perks. Lee Quane, the Asian director of a company that advises on expatriate packages, says that benefits can amount to almost double the base salary of an expatriate in Hong Kong. These benefits, once standard, are now too costly for most institutions. In fact, the article states that new hires aren’t even offered housing allowances now—and that several lower-level executives aren’t offered any expatriate packages at all.
Expatriates have also decreased their spending. The reduced benefits and unpredictable economy have made expatriates think twice about their extravagant lifestyles. “Anecdotal evidence,” reveals the Reuters article, reveals that several bankers are moving to smaller apartments and cheaper neighborhoods. The Expat Explorer Survey from HSBC Bank International reports that 63% of expats (from all industries) worldwide have “changed their attitude to spending,” and that 60% have cut back on luxuries such as holidays and leisure activities.
Still, expat jobs remain lucrative, and expat lifestyles remain lavish. The survey states that “Asia…[has] the highest-paid expats in the world.” About a third of all expats in Hong Kong, make over US$250,000 a year, while close to 40% make over US$200,000. Singapore also boasts wealthy expats, with 47% reporting over $4,000 a month in disposable income.
Is it still worth it to work abroad? Most seem to think so. Despite the global recession, 85% of expats say they’re staying put. They may no longer have their chauffeurs, but their six-figure salaries are cushioning the blow.
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