Negotiating salary during international transfer

Question

I work for a global company with offices in many countries. I am currently working in country A, but am being offered the possibility of transferring to an office in country B, which has a different currency and a much higher cost of living. How should I best go about negotiating a fair salary to maintain or improve my quality of life if I accept the offer?

It seems that I'm holding a few more cards than the typical salary negotiation process. First of all, I already have a job I'm happy in, which won't change if I decline the transfer - I'd be perfectly happy to stay put. Secondly, I'm being considered for the transfer personally due to my background and experience in the company, rather than hiring someone new. Third, HR will be coming to me with an initial offer, rather than the other way around. Finally, I have more experience than when I joined the company, so it might be possible to go for a raise rather than just an equivalent salary.

What are some good tools for determining an equivalent salary in a different country? Many of the cost-of-living calculators I've seen don't do international comparisons. For the ones that do, the fluctuating exchange rates make it difficult to know when the comparison was made, and what would be a true equivalent value at this particular point in time. Is it reasonable to use an average exchange rate over the past few years, or should all my calculations be based on the rate today, which happens to be near an all-time low? Or should I just ignore what I'm making now and just do research on the market value of my job in the area I'm potentially moving to?

EDIT: I'm actually currently working abroad, and the transfer would be a move back to my home country, so visas aren't an issue. I enjoyed a relocation package coming here in the first place, so I would expect something similar on the return.

Answer 1

Like Learner_101 said you've basically answered your own question: base your salary negotiations on the market value of the position in the area where you'll be working. Comparing exchange rates and cost-of-living is largely meaningless for determining whether an offer is competitive.

What you earned previously and the cost-of-living are definitely factors that you need to consider when evaluating an offer and deciding on the range/salary that would make sense for you to accept. But it doesn't and shouldn't factor into the data you use to determine if the offer is competitive.

That said you are in a special position. If they give you an offer that is at the high end of the range for the position in new location then it's normally difficult to negotiate a higher salary. In your case you can do so by simply stating that the offer does not make sense for you financially and specify your minimum or a range. Of course they may simply decide that the number you give doesn't make sense for them and they'll hire locally instead, but that doesn't seem to be a problem for you.

Answer 2

Depending on the time of the work in the other country, there are two possibilities.

• Local: you get paid as if you had always been living there (well consider getting some money for moving). In that case search the local market to see what the average incomes are, and how they compare to your current place. And ask for a rise accordingly.
• Expatriate: for a shorter project, or for a a couple of years, your company may accept to send you to country B as an expatriate. That is usually done by keeping your salary as it is (or the typical annual rise), but adding some compensation for the relocation. This should take into account the price of having two living places, regular travels, and compensate for the remote costs of living.

Answer 3

I was an expatriate more years that I should had been. Make no mistake, this is an expatriate situation, and not an emigration scenario.

Usually expatriate situation have their perks. Accept no less than paid accommodation, and a car or some transportation subsidy.

If you are leaving behind a significant part of your family (either young and still tied to parents, or children from other marriages), bear in mind it normally is part of the package to have paid flights. The minimum number of flights is extremely dependent on the country where you going to. For instance, from the top of my head the normal package for Mozambique is 1 flight per year, for Angola it is 3 flights per year.

If you have a spouse, often visas and flights are part of the package. Some companies go even to lengths of giving her a job.

I also had pocket money, again that part of the package is more dependent on the country you are going than anything else.

If this does not seem your scenario, than I would not move unless there was a very significant increase on salary.

Try to find out asking directly the conditions, and ask specifically for these perks, and/or ask around if there are others in the same situation. Go to expatriate forums, and try to gleam an idea how they are living, and the salary range for expatriates of the particular country you are going to.

When talking with your firm, absorb your information, however do not give them an immediate answer, and ask them some time to think.

Answer 4

I think you are in a good negotiating position, so I would go for a substantial raise.

You're not going as an expatriate, so don't expect all the perks and privileges used to entice them. This is probably one reason they want to send you, it may well save them a lot of money. So in your shoes I would focus on the salary boost rather than expect a house and vehicle, extra expenses etc,.

You will probably be expected to fend for yourself, what they have is basically an internationally experienced local with intimate knowledge of their company, so that makes you pretty valuable.

I would find out how much someone in a similar position makes roughly at least, then I would wait for the initial offer. If it's at the top of the range I'd be reasonably happy, if it wasn't I'd push for more.

Exchange rates etc,. fluctuate wildly at times, it's a bit pointless to rely on them too much, and since your going to your home country it doesn't make a great deal of difference. I expect you wouldn't be sending most of your pay overseas but spending it at home. So if it was me, I'd expect the offer to be in the local currency, if it wasn't, I'd do some calculating as best I could. But when the time came for the contract to be signed I'd probably stipulate that. I would not be prepared for my salary to fluctuate with the exchange rate. I'd much prefer a set rate in the local.

Answer 5

I would say that the best way would be to look at your specific situation. Record what you spend money on over the course of a month, then look up how much those things cost in your target location. Rent, food, electricity, heating fuel, transport, entertainment, etc. Look up how taxation works in your destination and therefore how gross salary translates to take home pay. This will have the advantage of being targetted to your situation rather than being generic.

Then figure out what the costs will be of living further from your family, how much do you value seeing your family? how much will that cost you both in terms of money and time? will you want to have a guest room in your house so family can visit?

Don't worry too much about exchange rates, yes they will fluctuate but your salary and expenses should both be in the currency of the destination. What you should be focussing on is how expenses compare to salaries in your destination location.

You should also try and find out what typical salaries for your position are in your destination country. Asking for less than that is doing yourself short, asking for significantly more may reduce the chance of the transfer going through.

Be aware that there may be some things you are used to that may be unaffordable in your destination location. For example I've heard in india it's common for people working tech jobs to have a maid in the house, whereas in europe having a maid would likely be prohibitively expensive. If so you have to decide whether those are things you would be prepared to give up.