Companies' expat costs fall in most nations

The cost to global companies of overseas assignees dropped significantly in many nations last year, according to the annual MyExpatriate Market Pay Survey published by ECA International.

David Sapsted

26 August 2020

The survey, which calculates the costs of employing mid-level expatriate workers in 160 countries, said the slowdown in the global economy in 2019 was the main reason for the overall drop in costs. "Moreover, in light of the Covid-19 pandemic, the average expatriate package is unlikely to grow significantly for the foreseeable future, as pressure builds on companies to manage their costs,” said Lee Quane, Asia regional director at ECA International.One nation that bucked the trend was the US where the overall cost of employing an expatriate (taking in salaries, tax and benefits such as accommodation and international schools) rose by $3,000 to $253,000. By contrast, Sweden saw the biggest drop in the rankings, with the average falling by more than $20,000 to $219,000.Hong Kong expatriate packages also continued to grow throughout 2019, with the average hitting $284,000, including an average salary of US$88,000. “Hong Kong stood out against the global trend of lower expatriate packages in 2019 and is one of the only locations in our rankings that saw all aspects of the average package increase” said Mr Quane."However, though this increase is positive news when compared to the rest of Asia, it was significantly lower than in previous years. This was representative of the weakened global economy in 2019."Once again, the most expensive nation for companies to send staff was the UK, followed by Japan with China third in the rankings, even though the costs in each were noticeably lower than a year earlier.The overall UK cost stood at $413,194 even though the average mid-level expatriate salary stood at $73,849 - significantly lower than in many other nations.Mr Quane said: “Although the UK maintains the top spot in our rankings, the overall cost to a company has dropped significantly – by over $8,600 in total. This, of course, reflects the global trend, but it should also be noted that the average salary for an expatriate worker in the UK is, and has been, a lot lower than in many Asian nations – this includes Japan, Hong Kong and Singapore."Therefore, while the overall cost is higher for the company, expatriates working in the UK are not necessarily better off compared to their counterparts in other locations in the world.”Eleven of the top 20 most expensive locations to send expatriate workers were in Asia. "Although the average value of an expatriate package has dropped in most locations in our rankings, there is no doubt that the costs of employing expatriate workers in Asia are relatively higher now as compared to other locations in the world," said Mr Quane."For example, countries such as Bangladesh and Vietnam have entered the top 20 most expensive locations in recent years. Further, of the eight countries in our list which saw increases in the cost of the average expatriate package this year, five of these were Asian nations.”