Property Insurance and Home Contents Insurance are two different types of cover. We help expats in Hong Kong with both…
‘Expat’ has been a word synonymous with wealth and luxury. Being an expat meant living on a generous salary plus benefits and allowances from the company one works for. It meant living in classy locations in swank apartments, sending one’s kids to the best schools, eating in expensive restaurants, and travelling to the most beautiful countries.
Not all expats enjoy the comforts associated with living in Hong Kong because of work. Research has shown that since 2004, most expats in Singapore, Hong Kong, and Shanghai have been given the localised compensation, in which companies give their employees pay that is comparable to those being offered to locals.
With localisation, the base salary is lower than those of regular expats and no longer includes benefits such as:
Obviously, fancy dinners, extravagant vacations, and prestigious schools are also no longer in the picture.
Still, expats don’t always see this as a loss on their part and similarly, companies don’t practice localising to reap the benefits. Localisation for expats can be seen as an opportunity to take charge of their own life someday. Because along with the generous salary and benefits of the old compensation came the reality of being tied to the company for an indefinite amount of time. This isn’t necessarily a bad thing but some prefer the freedom of being able to pick up and leave and move on to another job whenever they want or relocate to a whole new place. Deciding their own future is a big plus.
This is also why localising isn’t a win-win deal for companies either. Despite the practice saving them money in the face of difficult economic conditions, they also no longer have a financial bind on their employees and thus risk the possibility of losing their talents.
This is why some companies offer a “local-plus” package to aid their employees in managing their finances and adjusting their spending habits over a period of two years. This package also includes benefits such as transportation, housing, and education for their dependents.
Companies also know who to localise versus those they know won’t stay unless given the full compensation and benefits package. The former is usually the younger employees who are grateful for any opportunity while the latter is the more senior employees who have been loyal to the company and therefore deserve such benefits.
While localisation may mean keeping a closer look on the household budget and saving up for the children’s college education, it also means a certain freedom career-wise that isn’t possible with the generous package. And it’s also a desirable strategy in the long run for companies; it helps them maximise the talent they have in their employment and saving themselves money in the future. So it looks like localisation in the expat world is here to stay.
Village Insurance Direct provides expat assistance in finding insurance to cover personal and business needs while in Hong Kong.Contact us or LiveChat with us for more information.