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Originally Posted by hdus001 Having learned about this recently while evaluating a GCC offer,
I understand why a person living in a Western country will need to be offered a very enticing salary to move to the GCC. However, I'm quite interested to know how this works out for the company from a financial perspective. What incentive does the company have to hire a Western passport holder, when it can get the same job done for a lot cheaper by a non-westerner? |
Not quite sure, but let me share some thoughts/experience from some who has let an expat life for a very long time for multiple companies.
I don’t consider emigrating the same as going on an expat assignment. In general I see emigrating as something essentially permanent, and an expat assignment short term, say up to 2-4 years.
In many international companies it is important to gain international experience and build an international network of folks that know each other. So if you want to make a career, irrespective of your field of expertise, you need to move around internationally. For instance Shell International Petroleum in my days was considered a very interesting and lucrative company to work for. But you had to go where they send you. They were extremely generous and would move your family too, if you had for instance a child that would require special care they would pay for all extras to. But for the first 20-25 years of your career you had to go where they send you. You could not chose and you could not refuse. Only towards the end of your career you could chose preferred locations.
Many (western) students and graduates like the idea of working for international companies because they get a stint at working abroad. It’s not so much about the money, more about the experience.
Many international companies have similar expat renumeration packages these days. They get benchmarked too. These days, many of these packages tend to be based on what the job you apply for would pay in your home country! Not what it pays in the country you are going to. Obviously, you would get allowances to meet local expenses and so on.
With my last company we had a pretty good system too. When you got an international expat assignment you would go on the local payroll, but you would also stay on your home country pay roll. The company would pay you a nett salary and pay all the respective tax in both countries. In our case they also paid my and my wife pension and state pension in our home country.
About 20% of your salary was send to your expat country and 80% to your home country in the respective currencies. We lived a very comfortable life on just that 20%, even in the US! So that gives you some idea about the level,of compensation.
They would pay for your move back and forth. You would get an allowance for setting up home, buy a car etc. Rent and utilities were also paid for. Health insurance too.
I made very good money out of all my assignments. And we got to live and work in a number of countries around the world.
You would be given a guarantee to be given a job when your expat tenure was up and you went back home again.
In my last company expat assignments were offered for almost all roles, so not just management and executive roles. But also engineering, R&D, finance, legal, logistics, purchasing etc etc. We had on average 8-9% of the total global workforce moving around on expat contracts in those days
Things have changed a lot though. These days they will still want you to move, but you will go on a local contract only. Which for many westerners might be a huge gamble financially, if you come back.
I am still in touch with various folks around the world in different industries. Although I don’t have a detailed view, my impression is the (financial) very lucrative expat contracts is a thing of the past.
So all in all, there is likely to be a big difference between emigrating and going abroad for a certain defined period. Technically, legally and fiscally the latter is likely to be emigrating too. But it comes with very different expectations and mindset.
Jeroen