Expat relocation vs. local contract jobs

Global careers revIf you work for a global organization and are considering a short- or long-term assignment in a new country, it’s critical to understand the range of benefits that can accompany the two standard types of relocation: the extended expat assignment and the local contract or package. Though benefits for each type will vary from company to company and from location to location, consider the following general guidelines when thinking about an assignment in another country.

Expat Assignments

Relocating as an expat usually confers the highest degree of assistance and benefits and is therefore the most competitive and challenging global assignment to land. For the organization, it can cost up to twice as much to move an employee as an expat as it can to keep him or her at home.

Expat assignments can cover some or all of the following:

  • Finding a residence
  • Transportation, including paying for a driver if there are safety considerations
  • Trips home
  • Moving your family and household belongings
  • Housing costs, including maintaining your home (usually mortgage at home is not covered if the company is providing a place to live as part of a relocation) or helping you sell your home
  • Paying for your children’s private school tuition if public school isn’t an option
  • Cost of living differentials
  • Tax implications
  • Partial loss of spousal income

When proposing an expat assignment to your organization, take into account the substantial cost involved when offering your value proposition, and keep in mind that benefits can be a part of the negotiation.

Local Package

In a relocation based on a local package or contract, the host country agrees to sponsor you as though you are a local worker, meaning you will be paid local wages and enjoy local benefits. Your company may provide some tax or health care support, but by and large you are considered a local employee. In a relocation structured around a local contract, you will most likely not receive cost of living adjustments, transportation assistance, relocation support, and the like. Keep in mind that, depending on the country you’re moving to, wages on a local contract may be equal to—or even surpass—those of your home country.

Know Before You Go

Because cost and quality of living vary considerably from country to country, before entering into negotiations for a global assignment, make sure you’ve investigated the elements of relocation that are of greatest interest to you and your family.

by Mark E Thompson (EMBA ’01), vice president of Human Resources – Eaton Corporation, with Laura Schmitt