4 relocation package negotiation tips
An international assignment is an amazing opportunity. As a professional, you can learn, grow and enhance your career prospects. On a family level, it can enrich your lives and give you experiences that will benefit you, your partner and your children.
But now, at the negotiation stage, you have to ensure that the assignment is right for you – and here are four tips to help ensure that you get the best deal from your employer.
1. Get the contract right
The first stage is to get the contract watertight, for which it will be useful to seek specialist advice. Your contract should cover a number of key points including:
- Remuneration – how will your salary be calculated and paid?
- Duration – how long is the assignment expected to last, and what is the impact (if any) of early repatriation?
- Relationship with employer – does the assignment affect your existing contract of employment?
- Roles and responsibilities – what is your job title, what are your objectives, and how will you be appraised?
- Post-assignment – what happens when you get back? Is your previous role still guaranteed?
2. Maximise your earnings
Relocating to Zurich? Be prepared for a cost of living that may take your breath away. It is 46% more expensive than New York (which is already one of the most expensive places to live). Oslo and San Francisco are considered the next most expensive locations, with respective equivalent premiums of 27% and 26%. On the other hand, there are places in the world that are far cheaper to live in.
This is the key factor in calculating a salary, and the starting point for negotiation, but the best advice during the process is to talk about ‘equalization’. Your employer is of course keen to keep its costs down, but it should offer at least equal remuneration once local factors are taken into account, ie:
- Local cost of living
- Taxes – whether paid in your host or home country
- Social welfare – ie the cost of personal insurance, medical costs etc
- Currency fluctuation
- Financial obligations in your home country while you are abroad
- Accommodation and other benefits, if you are funding these yourself
- Hardship allowance – not all destinations are equally desirable and companies are sometimes obliged to offer a premium to tempt employees to go to certain locations
3. What benefits do you need?
There are a host of different benefits included in most expat packages, but it is still all too easy to concentrate on the housing negotiations and neglect the rest. The best advice, therefore, for expats is to consider all the different types of benefits that are included in the package, for example:
- Travel – companies typically offer flight costs (for the whole family if required) to and from the new host country as well as a reasonable number of trips back home.
- Shipping – assignees are usually given a “moving allowance”, ie a certain weight or volume of belongings that will be shipped at the employer’s expense as part of the package. Note that the ‘standard’ moving allowance may not be enough if you have a larger family, which is why it might be an interesting point to cover during negotiations.
- Other travel – many packages include either the use of a car (and even a driver), as well as local travelling expenses.
- Healthcare – often included, depending on the local provision of state-funded healthcare facilities
- Education – again, often made available depending on the availability of suitable local, state-provided education.
- Courses, clubs and subscriptions – many companies will fund local language classes, expat club membership fees or other relevant subscriptions. (Don’t overlook the importance of this kind of support in helping your family and partner to settle in the new location.)
- Insurance – ranging from personal insurance to emergency evacuation cover
- Accommodation allowance – usually negotiated based on ‘housing norms’, and usually the dominant factor in negotiations.
4. Remember the art of negotiation
The final piece of advice to expats negotiating a relocation package is perhaps the most important: choose your battles. Employers are naturally supportive of relocating employees, and they want to make it a successful and fulfilling experience for you and your family, while creating a positive commercial return for the company. But they have limits, and they have budgetary constraints.
Together with your family, take time to consider the various aspects of a relocation package (as listed above) and choose those that matter most. For example, some families will be keen to integrate more into the local community and have their children attend a local language school; others may insist on private schools. Equally, you may prefer salary in lieu of benefits, enabling you to spend your allowance how you wish. Each expat family has different needs, and you should negotiate with a firm idea of what is most important to you.