Valuing Quality of Life When Negotiating Your Relocation Package – Can Money Buy Happiness?


It can be thrilling to hear that you have been given an assignment overseas. In most cases, you will be recognized for your outstanding contributions and have a chance to grow your career. You may also be excited about your family. Many people find it exciting to travel abroad, experience a new culture, and see things you didn’t know existed. There are always concerns.
You may feel disoriented or disillusioned when you have to leave your routine and move across time zones, oceans, and cultures. It is essential to know as much information as you can about your new home. One of the most important questions to ask is, “How much does everything cost?”

Calculators for the Cost of Living

It may seem simple to compare essential items such as toothpaste, milk, dinner out, and the cost of renting a car or a movie. However, there are some surprises. Some goods and services may be more expensive than you would expect in specific ex-pat destinations. To fund programs such as health care and public transit, taxes may be imposed on imported goods, including cigarettes, alcohol, and gasoline.

Hardship premium

Some people associate the term “hardship” with early settlers or polar explorers who traveled west in covered wagons. The term “hardship” is used to describe a variety of factors, including the availability of certain goods or services, political and socio-economic freedoms, language barriers and infrastructure, as well as access to health care and pollution. Although not as dramatic as living on the frozen tundra in winter, hardship factors can have a significant impact on your overseas experience.

A hardship premium is often offered as part of corporate relocation packages. This helps to encourage people to move to less desirable locations. A hardship premium is a perk provided by companies to compensate for the stress and unhappy feelings that you might experience while on assignment.

You will be better equipped to evaluate the circumstances that could cause hardship and to address your quality-of-life needs before you accept the offer.

Asia-Pacific – Compare a Move to Two Popular Destinations

We can compare the cost of a move from New York City with two popular destinations in Asia-Pacific using a Salary Purchasing power Parity (SPPP). This report allows you to project the salary accurately for your new job.

These two cases were based on an employee who earned $100,000 and was married with a child. He or she transferred from New York City, Shanghai, or Sydney.

Case Study 1: New York to Shanghai

Shanghai, China’s biggest city, has a 220,000-strong ex-pat population. This makes it a popular destination for foreign workers. Companies around the world have considerable opportunities to take part in this nation’s rapid economic growth and modernization.

The Overall Cost of Living Index +1.89% (+$1,890.00).

Shanghai’s cost of living is slightly lower than NYC.

Transport -14.44%

Taxi fares are much cheaper in Shanghai than in NYC. The 25-mile ride from Pudong International Airport in Shanghai to downtown Shanghai will cost you $30. While the shorter 15-mile trip from JFK to Manhattan will cost you $45, it will take you less than 30 minutes. The single Shanghai bus ticket will cost you 45 cents, while the $2.50 NYC subway ticket will set you back $2.50.

Restaurants, Meals Out, and Hotels -14.50%

You can also enjoy a great deal of eating out. If you’re a huge foodie and love variety, Shanghai might be the right place for you. You may be able to pay less than $2 for a meal if you dine at one of the many noodle shops in your area.

Education +20.76%

Language barriers can make it challenging to attend public school. This can lead to education being a costly expense. Many ex-pats recommend that children participate in a public school in the first few years to learn Mandarin and have a unique cultural experience. However, most ex-pat children living in Shanghai go to international schools. International school fees can range from $12,000 to more than $30,000 per annum.

Hardship Premium +20% (+$20,000.00)

Many people who move to Shanghai may find it difficult to adjust to the cultural and language differences. Because of its tonal nature, Mandarin is one of the most challenging languages to learn. Each word can have multiple meanings, depending on how many tones are used.

Many ex-pats are concerned about food safety and air pollution. Some people may find it challenging to live with restrictive government regulations in media.

Case Study 2: New York to Sydney

Hardship Premium 0%

Many ex-pats love Sydney because of its laid-back lifestyle, beautiful weather, and high standards of living. There are many opportunities in Sydney. More than half of Australia’s largest companies are headquartered there.

Index of Overall Cost of Living +18.12% (+$18.120.00)

Despite its seemingly endless appeal, Sydney is also a costly place to live.

Communication +84%

An American who used to pay $70 per month for unlimited calls, texting, and wireless Internet, may be shocked at the high cost of Australian cell phones and Internet service. The data caps for Australian wireless Internet plans are typically between 5 and 15 gigabytes per month. They also have some of the most expensive per gigabyte overage fees of any country. You may be charged several hundred dollars more each month, depending on how you use the Internet or your phone.

Alcohol & Tobacco +34.5%
Clothing +68.4%
Groceries at +15.58%
Recreation & Culture +29.17%
Restaurants, Meals Out and Hotels +25.00%
Transport +35.78%

Australia is one of the most expensive countries for groceries and consumer goods due to its size, remoteness, and small population. To encourage local industries like banana growers or car manufacturers, tariffs are imposed by the government to cover the high shipping costs of imported goods. The other side of increased costs for maintaining domestic industries was that Australia was relatively unaffected by the 2008 global economic crisis.

Oranges and apples

It is essential to recognize that every person is unique and that an overseas assignment may not be for you. Access to detailed information such as the SPPP report can help you negotiate a structured package of benefits for your move. It will help you to understand what you value the most and what you can expect when you get there.