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locals paid more than expats?

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nkprimo
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locals paid more than expats?

Post by nkprimo » Fri, 08 Jun 2007 8:37 am

Based on your years of working in Singapore, would you say locals are paid better than expats? I was told that they are but I would like to hear other people's opinion...

Thank you.
Last edited by nkprimo on Fri, 08 Jun 2007 9:56 am, edited 1 time in total.

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Post by Splatted » Fri, 08 Jun 2007 8:50 am

I can't base this answer on personal experience, but generally when there is a skill shortage in a certain sector pay rates tend to rise, both for local and foreign talent.

For an expat, there would have to be some "incentive" for someone to leave their country of birth to come all the way to Singapore and take up a position, eg tax savings, higher salary, promotion, or simply the experience of working in an "exotic" country. It may or may not necessarily be a higher pay than the local counterparts.

For some positions, eg CEO of a major company, you will find however that pay rate is not dictated by local supply and demand, but rather the global market for people of this calibre & usually to attract qualified talent you need to match the expected salary packages/incentives these people would normally receive overseas (namely according to US market).
Last edited by Splatted on Fri, 08 Jun 2007 8:53 am, edited 1 time in total.

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Post by muratkorman » Fri, 08 Jun 2007 8:51 am

For some positions this could be true, but I believe in general expats are paid better considering that their salary package includes accomodation, car or extra living allowance.

In order to attract expats, they have to offer better packages than the current standards.
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Post by Splatted » Fri, 08 Jun 2007 9:08 am

muratkorman wrote:For some positions this could be true, but I believe in general expats are paid better considering that their salary package includes accomodation, car or extra living allowance.

In order to attract expats, they have to offer better packages than the current standards.
Things like accommodation & car, work mobiles etc, I wouldn't consider these being part of the 'pay'.

Personally, I feel it's what you take home at the end of the month in your bank account.

I used to regularly and usually work in different parts of the state when I was in Victoria, Australia, and accommodation was always included, but I never considered this a bonus. Travel expenses were also included.

These sorts of things were covered as I could just as easily find work in the city for the same pay, and it was generally acknowledged that if you want to attract the skills to other areas you at least cover the expenses getting that professional to the area and keeping them there.

Otherwise, who would want to inconvenience themselves living further away from home & friends, for the same pay and higher expenses? You walk away from the job with less money in your pocket if that's the case than if you stayed put.

So, anyway, things like accommodation, car, mobile, relocation expenses, are a given and I wouldn't count this as part of the 'pay'.

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Post by muratkorman » Fri, 08 Jun 2007 9:15 am

But that is what makes the difference. The locals don't receive these conditions and they pay their own rent and use their own car. On the other hand expats like us stay in a condo which has a rent higher than many local salaries. If you segregate these additional payments from the original salary, you won't make a healthy comparison.
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Post by Splatted » Fri, 08 Jun 2007 9:30 am

muratkorman wrote:But that is what makes the difference. The locals don't receive these conditions and they pay their own rent and use their own car. On the other hand expats like us stay in a condo which has a rent higher than many local salaries. If you segregate these additional payments from the original salary, you won't make a healthy comparison.
The thing is, whenever I had to work away from home, I still had to pay rent back in the city and utility bills, etc.

Why would anyone want to pay two lots of such expenses, and for it to be considered part of one's pay?

Why would I want to pay $100's on fuel bills travelling across state, in my earlier example, when I could get the same job locally and not have this expense at all?

I don't consider anyone doing me any favours covering the expenses of relocating me. This is always a given & my pay has always been negotiated on top of this.

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Post by sundaymorningstaple » Fri, 08 Jun 2007 9:45 am

Okay, I am going to get flamed for sure on this one but here goes........

By the numbers, yes locals do get paid more.

However.......

Senior Level Expats generally will have a larger package do to their international experience and generally more rounded experience.

Mid-level positions like asian expat middle managers or engineers generally get paid equally or less depending on where they are from (sad to have to say this but I'm speaking from 14 years of recruitment experience - not counting being an HR manager). Of course we need to also factor in the possibility of certain positions having allowances versus locals having to pay CPF. Usually an employer will look at the "total" cost to the company when deducing the amount to pay. This doesn't always translate to money in the employee's pocket however.

Then we come to the shipyards & construction industries and this is where I get flamed. Every one of the 850,000 foreigners working here in Singapore be they P1, P2,Q, S or WP's are "Expats". Unfortunately most who frequent these forums do not fit into the lower rungs of the economy so therefore tend to forget the definition of "Expat"

So, I guess the next step would be to narrow the definition? And yes, you do need to take into consideration the total package and not just the basic salary.

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Post by ScoobyDoes » Fri, 08 Jun 2007 9:49 am

Splatted wrote: Things like accommodation & car, work mobiles etc, I wouldn't consider these being part of the 'pay'.

Personally, I feel it's what you take home at the end of the month in your bank account.
You have to count these as pay.

It means that you have more money to put in the bank because you have no need to spend it. And, let's face it that here as in most countries these perks are taxable so for me anything taxable is an income.

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Post by Splatted » Fri, 08 Jun 2007 9:59 am

sundaymorningstaple wrote:Usually an employer will look at the "total" cost to the company when deducing the amount to pay. This doesn't always translate to money in the employee's pocket however.

.....And yes, you do need to take into consideration the total package and not just the basic salary.
I think this is the point of confusion here (or difference of opinion, rather).

Total cost is an Employer's perspective on the matter. For someone like me, all I care about is the $$ value entering my bank account.

When I used to travel & fill these temp positions, all I wanted to ensure was that my take-home pay (after paying all expenses) was never lower than working locally.

Was the gross dollar figure higher? - Yes, but the net value entering my bank account was no different for the above reasons.

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Post by sundaymorningstaple » Fri, 08 Jun 2007 10:22 am

splatted,

I would have to agree with regard to employers costs.

From your perspective however not quite because you are talking about "You" and not generally speaking.

I could talk about "Me" when I first came to Singapore a quarter of a century ago. In that case, I was an expat drawing "expat" salary. I got housing allowances, etc., etc. and so on. My difference? I didn't maintain a home (well I did if you count the farm which was self-funding) "back in the city" so I paid for and maintained a single "living" place here in Singapore.

Under this arrangement wouldn't you say that my allowances would have to be considered income? To me the easiest way to figure out which would be the correct way is using the tax liability method. If it is subject to classification as income by a tax board (whether in you home country or your host country) then you have to consider it as part of your salary package. How one negotiates their pay packet is another story though.

:wink:

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Post by muratkorman » Fri, 08 Jun 2007 10:47 am

Coming back to the subject, I would say expats have better income with their allowance packages compared to locals. And I think this is applicable globally. On the other hand, you should consider this higher payment as a compensation to sacrifices made such as being far away from your country, family and friends.
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Post by Splatted » Fri, 08 Jun 2007 11:59 am

sundaymorningstaple wrote: Under this arrangement wouldn't you say that my allowances would have to be considered income? To me the easiest way to figure out which would be the correct way is using the tax liability method.
Yes it is income.

I don't disagree with the tax definition of "income" that you've (and others have) brought up.

And without wanting to re-hash the same point yet again, as a total, including all such allowances, and bonuses, minus all unavoidable expenses (housing, schooling (if you've brought kids, etc)) at the end of the day I look at the net figure that ends up in my bank account.

Some expenses incurred here in Singapore are much higher than back home overseas. "Free all-day parking" for example, simply doesn't exist here in Singapore. (If it does, please let me know where).

Housing is much cheaper back home as well - I've lived previously in a 3br brick house on 3/4 acre block of land as do most Australians. Cars, without question are cheaper overseas.

To maintain the same quality of life here in Singapore as what one had back home, it is generally much more expensive.

So, if i'm trans-locating my lifestyle here without making any sacrifices, generally what is considered, say, a $50,000 lifestyle by overseas standards, may end up being a $100,000 lifestyle by Singapore standards if continued here (I'm guestimating).

If I were someone arriving from overseas and negotiating a pay package, it would have to as a bare minimum allow me to continue my lifestyle and at least have the same net $$ value in the bank at the end of the month. Anything less, simply wouldn't be fair - why leave home otherwise & accept an overseas job otherwise?

The question then comes, am I better off than the local counter-part?

Again, I would only compare net pay packet in the bank at end of month. Everything else is making a lifestyle comparison.

The reason I don't like comparing lifestyles is similar to the "materialism" debate. What's considered normal by one person's standard (eg flat-screen tv in every bedroom) can be considered "rich" or materialistic by someone elses.

As a gross dollar figure, however, yes - expats get more. (not counting the 850,000 mentioned earlier by SMS).

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Post by sundaymorningstaple » Fri, 08 Jun 2007 12:30 pm

If you use the EP qualifications to determine an Expat definition (leaving out all the "foreign worker" that I alluded to, in order narrow the scope somewhat, I would have to say the "majority" of Expats here are actually Regional Expats from other Asian Countries and on the average get paid less than their local counterparts. As a recruiter it was rare that any regional engineer was paid more than their equivalent local employee in the same position. This even moreso using basic salaries as a guideline. This only changed in the IT sector and a wee bit in certain areas of the PetroChem-O&G sectors, and then only if the regional expat had US experience and/or possibly Mid-east experience but less so.
At least that is what I found during my 14-16 years total HR experience here in Singapore.

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Post by Splatted » Fri, 08 Jun 2007 12:43 pm

sundaymorningstaple wrote:If you use the EP qualifications to determine an Expat definition (leaving out all the "foreign worker" that I alluded to, in order narrow the scope somewhat, I would have to say the "majority" of Expats here are actually Regional Expats from other Asian Countries and on the average get paid less than their local counterparts. As a recruiter it was rare that any regional engineer was paid more than their equivalent local employee in the same position. This even moreso using basic salaries as a guideline. This only changed in the IT sector and a wee bit in certain areas of the PetroChem-O&G sectors, and then only if the regional expat had US experience and/or possibly Mid-east experience but less so.
At least that is what I found during my 14-16 years total HR experience here in Singapore.
Thanks SMS,

I should have pointed out that I was only voicing an opinion, btw, & not speaking from experience. I'm actually PR here (through marriage), so I've never arrived with an EP on some work assignment.

I think I had in my mind the stereotypical idea of "expat" as being the caucasian male arriving from USA/Europe/Australia, with family in tow.

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Post by Marlowe » Fri, 08 Jun 2007 7:10 pm

i am the compensation & benefits director for asia pacific of a big company you all have heard of. i can speak about professional level people, not construction, dock workers, etc.

and, sundaymorning is right. all else being equal, non-singaporeans are paid the same as singaporeans. senior level people in most multinationals here tend to be americans or europan, and they make a helluva lot more than their local counterparts on average because they get a lot of goodies like housing allowances, etc. however, that is NOT the norm for expats who are here. most are hired as locals or if they're on expat packages, they are 'light' packages that are more to keep people connect to home-country pension plans than the traditional goody-laden package.

it really depends where the person is coming from. if they're from india or china, they'll usually make less than locals. if they're from australia, the US or europe, they'll usually make the same or a little more.

so, the answer is, 'it depends'.

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