Friday, December 17, 2010

Work permit 5 of 5: Salary Negotiation

Fair warning: this post is extremely rushed. We had the company Christmas party last night and while plenty of people said they wouldn't even be in this today, I still plan to. I am, however, running late. Incredible party, but boy am I tired and I won't be editing this carefully. It didn't help that I left after the trams stopped and walked across much of Amsterdam to get home at 1:30 in the morning!

I was living in London and was back in the US for a friend's wedding and eight of us were at a Mexican restaurant for dinner. When it came time to pay the bill, eight wallets came out, with an assortment of cards and cash. I thought about it for a moment and realized that with the (then) exchange rate at $2 to the British pound and with me living in the second most expensive city on the planet (or first, depending on the source), this dinner for eight was about the price of dinner for two back home. I picked up the tab and saved everyone a lot of hassle.

Money's always a difficult and confusing topic and if you're in the wonderful position to negotiate the salary for a job in another country, you'll want to keep a number of things in mind.

Exchange rates are for exchanging money

Outdoor Food Market
Who cares about the exchange rate?
When I first moved overseas, I was a bit obsessed with staying on top of the exchange rate. "How much is this carton of eggs in dollars?"

It doesn't matter. What matters is whether or not something is cheap or expensive relative to the local currency, so don't stress about it unless ...

... you're planning on returning to your home country a lot. That 30,000 baht a month salary is fantastic in Thailand but it's only about $1,000 US. If you're a Thai going to work in the US, great! If you're an American going to work in Thailand, you'll want to be aware of this.

That's nice. Now tell me the salary to ask for.

If you live in a foreign country, you'll discover that the economy is as foreign as the country. For example, here in the Netherlands books are typically around €16 to €18 (about $21US to $24US). Mind you, we're talking about the cheap mass market paperback that will sell for $7 to $8 in the US. If I were living in France, many excellent wines are dirt cheap and are often far better than the beer (French beer proves that the French do not excel at everything food and drink related). Petrol (gas) in Europe is far more expensive than in the US and cigarette prices vary considerably from country to country.

What this means is that when you're naming a salary, you're naming a salary relative to what the job should earn, not relative to what you think you'll need for your cost of living. Try as you might, you will get it wrong if you try and estimate the cost of living for yourself.

Justice Bao's Mansion
You can't afford to live here.
What I recommend is naming a range. This sounds strange, but it works like this. In London, for example, many computer programmers earn between £35,000 and £55,000 a year (it can be much higher if it's in banking). The lower end of your range should be close to the higher end of typical salaries. You're an expert and you don't want to sell yourself short. You'll have to judge this carefully, though.
I'd like to earn somewhere between forty-five and sixty-thousand pounds a year, but it really depends on holiday time, working conditions, or other benefits available. What salary did you have in mind?
At this point, you've given a range, made it clear you know what reasonable salaries are, made it clear you're flexible, and thrown it back in their lap. And you've done it very professionally. And you know what? If they're offering eight weeks off a year, you might be quite happy to take a lower salary.

The employment contract

If you get this far, the actual employment contract will need some form of relocation assistance. To guarantee my job in Nottingham, while I did receive a very nice salary, I also offered to pay for my own transportation to the UK. Generally, the employer will pay for your flight and the cost (if any) of moving your goods. If you've offered to pay to secure the job, so be it (don't offer to pay unless you absolutely have to).

In addition to the normal needs of an employment contract, you'll have to ensure that they've guaranteed you some initial accommodation. Most larger cities offer some sort of "short-stay" apartment housing for people moving to a city. They typically include a kitchen, so it's a bit more than a hotel. If you're working in a low-paying industry (e.g., social worker) and they offer to let you temporarily take a room in a coworker's flat, consider it.

Also, if you'll have trouble with rental deposits, ask the company if they can provide a payroll loan to cover it? Make sure you ask before you fly over. Being homeless is not fun (I speak from experience).

Finally, you might have to have a provision in there that if you leave before a certain amount of time, you'll repay some or all of the relocation expenses. This is a normal condition, but make sure it's not for too long of a time. I probably wouldn't go over a year, but it depends on the expenses.

Overview of Part 5
  • Forget about the exchange rate
  • Name a salary range, not a flat rate
  • Make sure the contract covers relocation needs
Work Permit Summary

So that's about it. I've covered preparing your résumé, researching and applying for jobs, interviewing and salary negotiations. This should give you a solid plan for attacking the foreign job market. Be aware, though, that there are plenty of other avenues to working overseas and this one is not guaranteed. It's simply a variant of the strategy that I took and I know it's worked for others too.

Good luck!

<< Part 4: the Interview


  1. Thank you very much for this series. I see I have a lot of work ahead of me but having this outline gives me a place to start. Enjoy your holidays!

    - Brendan

  2. @Brendan: you're quite welcome. Yes, it's a lot of work, but the upside is that even if it doesn't get you a job in another country, it will teach you a lot and the improved résumé can improve your job opportunities in your home country. It's a "win-win" situation, I think.

  3. Great series, Curtis. Keep posting.
    It would be really interesting to read about every day expat's problems, for example how to mix with locals, how to deal with cultural differences, etc.

  4. Ivan: those are some great ideas. I've got a series of "starter" posts written with just hints of what I should research and I'll have to add those.