Company relocation packages are also not as generous and comprehensive as they were in the past, adding to the practical challenges and costs of moving.
Adam Hugill, partner at Hugill & Ip Solicitors in Hong Kong, says the deterrents to picking up stakes and moving to a regional hub like Hong Kong or Singapore tend to be “practical rather than structural”.
“Housing is expensive and apartments are generally small. International schooling is also often a threshold issue, particularly for families with two or more children, as the availability and cost of school places can determine whether a move is viable,” says Hugill, who focuses on employment law.
Kher Sheng Lee, Asia-Pacific co-head of the Alternative Investment Management Association, says “partner career and schooling, in particular, show up repeatedly as reasons people decline assignments or end them early.”
When Hong Kong unveiled competitive tax incentives in June, one of the key considerations for Singapore-based funds workers contemplating a move was how to relocate before international school application deadlines in November, industry participants tell Ignites Asia.
However, Singapore’s own tax proposals, announced last month, prompted some funds workers to reconsider their relocation plans, a tax consultant says, requesting anonymity to protect client details.
Most people “are not eager to relocate” as it can be a “costly and tiring process, especially for people with families”, the tax consultant says.
“So-called relocation packages are becoming less attractive, and people are left having to pay out of their own pocket for many things,” she adds.
Traditionally, relocation packages would include a travel allowance, temporary accommodation and a rental allowance, according to John Mullally, Hong Kong-based managing director at recruiting and placement agency Robert Walters.
For executives with families, they often extended to spousal support, assistance for children, and coverage of school fees, he says.
These conversations would happen quite early in the process of a job offer, he says, since they make up “material costs” for both the employer and the employee. But some of the relocation perks that companies provided two decades ago are not as common today, notes Mullally. “There is a bit of a general misconception that these packages are still the norm,” he says. “This really now exists at the most senior levels within the largest firms with the biggest amount of money.”
Mullally notes that more and more companies are now saying: ‘We can give you a one-way ticket, a month’s accommodation and a US$2,000 relocation allowance, but the rest is up to you.”
Executives are often told to sort out rent and schooling themselves, with Mullally saying companies believe they are “paying what [they] feel is a pretty decent salary that should support those expenditures”.
Another consideration for funds executives pondering a relocation is how long they should stay in their new location and what that would mean for their families.
Increasingly, Aima’s Lee is seeing that senior moves in Asia are considered “tours of duty”. “People go where the money is being put to work, and they often come back when it moves again,” he says.
This might lead to a compromise for some senior executives where they relocate to a new city for work and their family stays behind, Lee adds. However, a good relocation package is important for a company that is trying to attract top talent, which is “scarce globally”, Lee says.
When a candidate is highly sought after and the company has the budget, relocation packages may still include rental allowances and schooling support, often covering costs at some of the competitive international schools in the city, Mullally says. “Some of the larger US bulge-bracket banks and investment management firms will also hold a certain amount of debentures within some of the international schools for their senior people to take up,” he adds.
Some senior staff are also looking for companies to address “bonus, equity, deferred compensation and what happens on termination”, as part of their relocation package, says Hugill.
“Relocation discussions are rarely just about salary,” he says. “The questions that come up repeatedly are: What is the real net package? Where will I live? Can my children secure school places? And, critically, what happens if the assignment ends early?”
The article was originally published on Ignites Asia
