Climate change

Here in southern Ontario we have just clicked over into fall weather.  Every year, usually in the last week of August we wake up one morning to discover the temperature has dropped a few degrees and the humidity has suddenly vanished.  Although it’s still warm and sunny, the air is crisp.  It makes me feel that it’s time to get off my butt and start doing things. 

One of the benefits of expat life is to experience living in different climates.  Not something you normally think about when looking back on your travel experiences and yet for me it’s just as much a part of it as the people I’ve met and the places I’ve seen.

When we lived in Baku, Azerbaijan, despite some rain and even occasional snow in winter, it was primarily an arid climate and very hot in the summer.  Its distinctive feature is the wind, and locals told me that the name Baku means City of Winds.  There’s a steady breeze most of the time, a blessing in the summer heat and for keeping airborne pollution at bay.  However it’s in the winter when it can howl for days that you really notice it.  Lying in bed at night it made me feel really cozy, despite our rather draughty apartment and the inevitable clanging of a piece of corrugated iron somewhere.

Curiously Baku doesn’t have a name for this wind, but in Cairo they call it the Khamsin, which means 50 in Arabic, because it blows for about 50 days in the spring.  It comes from the western desert and brings raised temperatures as well as a lot of sand and dust.  However what I remember most about Cairo weather is how cold it was when we first arrived in January and that I hadn’t packed enough sweaters to see me through until our shipment arrived. 

By contrast, we arrived in Dubai on July 1st, just about the hottest time of the year with temperatures well over 40C.  When we checked into our hotel room I was convinced they’d made a terrible mistake with the plumbing, as there was steam rising from the toilet.  I discovered later that the water storage tank was on the roof and therefore the water coming out of the cold line was almost too hot to shower in.  Experienced expats soon explained that we needed to turn off the hot water immersion heater in the bathroom, allow the water in the tank to cool to room temperature and then use the taps in reverse – cooler water now coming out of the hot tap and hot out of the cold.  Another surprise was that Dubai was humid in the summer.  It never occurred to me that the desert could be humid.  But  the prevailing wind passes over the warm waters of the Arabian Gulf, making most of the summer oppressively sticky.

Having been born and raised in the northern hemisphere I’m glad I’ve had the opportunity to experience living in really hot climates.  Although I  love the sun, living in the desert has taught me that you can have too much of a good thing.   I know now that what I love most is the contrast between the seasons.  I find the changes reassuring; like the chiming of a clock they mark the turning of the year.

Show me the money!

Money makes the world go round, so I thought I’d talk about some of the items normally found in expat employment contracts.  But I would start by saying that very few expats work overseas just for money.  Diplomats, those in the military, people who work for charities and NGO’s certainly don’t, people looking for adventure or work experience don’t, and even those whose work is the driving factor generally have many other reasons other than money for accepting an expat position. 

First, some terminology:

Working as an employee is what most people understand it to be.  You become a permanent employee of the company and are usually entitled to a range of benefits, such as health or life insurance, savings or pension plans etc.  It implies a long term, permanent position although these days most companies won’t hesitate to lay off staff as soon as they’re no longer required, so pay particular attention to termination clauses.

Working as a contractor, means you are a self-employed individual.  Many contractors have their own registered companies (even if they’re the only employee) for tax or liability reasons.  Contractors are usually paid on a daily or monthly rate which will generally be all inclusive.  In other words, as a contractor it will be up to you to pay for accommodation, health insurance, airfares, mobilization costs as well as any expenses incurred by your family (visas, school fees, etc) if you choose to bring them along.  Typically contractors can be terminated at very short notice (eg 24 hours) and the term of the contract is always stated, although it may be extended by mutual consent.  Because they receive so little company support, contractors usually get paid higher rates than employees.

Looking at the contract itself it’s important to determine who will pay for what.  Some are very complex, with the employer providing many items, allowances and “uplifts” to reflect a high cost or living or hardship location, for example, and perhaps even deductions such as hypothetical tax, to bring the base salary into line with the home country.  Others are much more basic, offering lump sum packages which the employee can spend at his or her discretion.  Either way the main things to look at are:-

Accommodation.  If it’s provided by the employer, there are three broad options:

1. Provided by the employer.  You need to determine if it will meet your needs in terms of size, quality and location.  While this can be the simplest solution, as you’ll just walk in as soon as you arrive (and, perhaps more importantly, just walk out when you leave) you have no choice about where you live. 
2. An accommodation budget ie a maximum amount which you can spend.  It’s then up to you to find suitable accommodation within the budget and the employer will rent it for you on your behalf. 
3. An accommodation allowance ie a fixed sum of money which may, or may not, be enough to cover the cost of accommodation.  This can work in your favour if the allowance is generous as you can pocket the difference if you find a place which costs less than the allowance.  By the same token, you may find you have to add money to the allowance to secure something to your taste.  It’s therefore important to research the local housing market to determine whether the allowance being offered is adequate and if there are any additional fees for agents, deposits, taxes, etc.  Similarly find out what are the normal lease terms – must large amounts be paid in advance and what happens if you need to leave on short notice?

Also remember to consider the cost of utilities, if they’re not covered by your employer.  Generally apartments are much cheaper to run than houses, where heating, air conditioning and even water for the garden can be very costly.

Schooling is another major expense, particularly if you have more than one child.  Somewhat like accommodation, some companies will either offer to pay the fees for a particular school, or offer an allowance which you can use towards the school of your choice.  Again you’ll need to research the schools available and their fees to see if what’s being offered is adequate.  Very few companies pay for nursery or pre-school, some will cover boarding school in your home country.  Remember to look out for extra charges for after school activities, transport, uniforms, etc.  If you need to trim costs you might want to look at home-schooling.  I understand there are now many excellent distance learning programs, often including tutoring over the internet.

Insurance.  I’ve already discussed the importance of health insurance.  The best scenario is to be covered under a company group policy.  If you do need to purchase this on your own, you may want to use a broker who can help you compare the huge range of options.  Many company policies will also provide life insurance and sometimes disability insurance.

Transport.  Is a vehicle provided, or an allowance?  If you are moving as a family, how will the children get to school and how will the stay-at-home spouse get around?  Running a second car can really eat into your budget.  We’ve always managed to avoid it, either by living within walking distance of good local facilities and/or using taxis, but you need to research and plan carefully when choosing accommodation.

Vacations.  Four or five weeks are fairly typical as a minimum for expat assignments.  If it’s a hardship location though I would press for more, as you’ll find a lot of your holiday time will be spent taking care of health and dental checkups, shopping for things you cannot buy locally, etc.  It’s usual for the company to pay for your flights, but check if they provide you with a ticket to you home country or an allowance to spend as you wish.  Obviously the latter option is preferable, as you may prefer to use the time to explore even more of the world!

Mobilization/Demobilization.  Some companies will pay actual costs or provide an allowance for you to spend as you wish.  This can range from a full service package which includes pre-mobilization counselling, shipping household goods and the services of a relocation consultant when you arrive.  Or it may be just enough to ship a few extra suitcases.  In any event you should consider what you will actually need and whether you or the company will pay for it.  And as already stated – don’t forget the costs associated with the end of the assignment.  If an allowance is provided do check to see if it has to be repaid if you terminate the assignment early. 

Visas.  The company should organise and pay for the work visa for the employee, but you should determine if they will also assist and pay for the visas for accompanying family members. 

Terms of Service.  Under this heading you need to establish:

1. Working hours.
2. Sick leave.
3. Equipment to be provided.  Are you expected to provide your own laptop, mobile phone, etc?
4. Duration of the contract and how termination (by either side) can occur.
5. Confidentiality or non-competition clauses.
6. Pensions plans and/or gratuity.

Tax.  I’ve put this as a separate heading because it’s a big issue and one for which I would strongly urge you to seek professional advice.  Some expat packages are quoted as “after tax” – in other words the employer will pay any tax owing in the country of the assignment on your behalf.  If this is not the case you need to find out how much tax you will have to pay.  This survey, just released by KPMG provides some rough guidelines.  You then need to determine if you’ll also have to pay tax in your home country.  If you can become non-resident for tax purposes, then also consider the consequences if you return earlier than planned as tax-free status often requires a minimum period outside the country.

Cost-of-Living.  If no allowance is given for the difference in cost-of-living between your home country and your expat destination then you need to do some independent research.  These days, thanks to the Internet, there’s no shortage of information.   One which I came across just this week is the UBS Prices and Earnings Study, which compares the cost of living in 73 international cities, but many similar surveys are conducted by other companies.  Scour the forums of the various expat websites (see my resources page for some suggestions) as they can be a valuable source of first-hand information from fellow expats.

Remuneration.  All the items I’ve mentioned so far need to be analysed before deciding whether or not the salary offered is fair. If you’re being recruited specifically for an overseas assignment it’s likely that when it’s over you may face a period of unemployment. You’re also going to be living far from friends, relatives and your usual support networks, so it’s reasonable to expect to make more money than you would at home.

Lifestyle/personal goals is last on my list, as this cannot be quantified in money and won’t be mentioned in any contract, but it’s an important part of the decision to take on an international assignment.  It’s also very personal, but here in no particular order are some headings to think about.  You may have a few more of your own to add:

1. Climate
2. Language
3. Local culture
4. Security
5. Recreation
6. Shopping
7. Healthcare
8. Social Groups
9. Travel  (local travel opportunities and also the distance from your home country)
10. Career advancement (for working expats)
11. Continuing education (for non-working expats)

If you’re in the lucky situation of having more than one job offer on the table at the same time, making a decision can be quite a process, involving calculators, spreadsheets and much pencil sharpening.  We were once in the situation of having jobs offered in three different countries at the same time and, although it was nice to have a choice, it was difficult to make a decision.  In the end, because our son was entering the imortant high school years, the quality of schooling was the deciding factor.  So while I entitled this post “Show me the Money” in fact money may not be the deciding factor!

Health Insurance

I’m following the current debate on US health care reform with interest.  Having grown up in the UK with it’s NHS system and then emigrated to Canada where there is something similar, I only encountered paying for visits to the doctor when I first became an expat.  I’ve been fortunate to have had excellent health insurance, but it’s still been a shock to see how it all adds up.  The year I had a back problem the cost of specialist visits, scans, physiotherapy, etc was truly alarming even though my injury wasn’t anything major.

Medical expenses can literally take you out financially.  Even though she was insured, a good friend found that the 20% co-pay for a life threatening illness she suffered while overseas was more than the value of her house back home.  She and her husband had to delay retirement as a result.

It’s therefore surprising how many expats don’t seem to take health insurance all that seriously, shopping for it primarily on the basis of cost, rather than coverage or relying on holiday travel insurance policies from home when they’re resident abroad.  Even if you’re from a country like the UK where health care is “free” in the event of an accident or serious illness you may not be fit to fly home for days or even weeks, and when you do, you may not be immediately eligible for coverage. 

So what’ s important when shopping for health insurance?

1. What’s covered, what’s not.   Hospital care usually is, but what about normal visits to the doctor, tests the doctor may order and prescription drugs?  What about physiotherapy, eye care, dental and annual checkups, mammograms, vaccinations, etc?
2. Medi-vac (medical evacuation).  This is important if you’re living in a country where medical facilities are not that great.  I once knew someone who had to be flown out to have a broken leg set, as local x-ray facilities were not considered safe.
3. Pre-existing conditions and other exemptions.  This can be a real killer.  Most policies for individuals will not cover pre-existing conditions although some may do after a year or two, providing they haven’t re-occurred.  If you suffer from a chronic condition like diabetes it can have major implications.  I just read a story about American expats who are stranded overseas because of they can’t get coverage back home for conditions they’ve developed as expats.  Usually the only way around it is a company or group policy, as they generally do cover pre-existing conditions immediately.
4. Is the coverage 100%?  Many plans require a co-pay, in other words covering less than 100% of the cost.  This may or may not have an annual limit, after which everything is 100% covered.  Accepting a co-pay may be a good way to reduce the premium if you’re paying for the plan yourself, but it may turn round and bite you on the bum as it did to the friend I mentioned earlier.

Finally remember that although some plans will pay the health care facility directly, generally you will have to pay and claim it back later.  This can often take a few weeks, so remember to keep some funds or a credit line available to cover such unforeseen expenses.

Choosing a school

An article in Times Online about children who have taken the IB curriculum finding it difficult to enter British universities could be of major concern to many expat parents.  Choosing an appropriate school is a major decision for families moving overseas, and for those in secondary school/high school, curriculum is often the deciding factor. 

Looking back, we went quite blindly into our first expat posting with our 9 year old son, not really knowing what kind of school we would find.  This was back in 1996 and doing research over the internet was just about impossible.  But as I wouldn’t be working I felt I could make up at home for whatever the school lacked, as the opportunity for us as a family was too good to pass up.  Fortunately we fell on our feet and our son’s very small international school provided an excellent education, albeit in very shabby surroundings.  It was an American curriculum, very similar to the Canadian one we had come from, and he was able to continue in American schools wherever we were right up until university.

Some parents I’ve met along the way have struggled though.  Recently in Dubai finding a school of any kind with vacancies was difficult and as a result parents had very limited choices.  For those who are able to pick and choose, my advice for the early grades (up until age 11 or 12) would be to focus less on curriculum and more on the the “feel” of the school and whether it fits your child.  At that stage, although the approach may be different, most sytems have similar goals.  But after that you really need to give careful thought to where and what kind of post-secondary education your child is likely to pursue.  Hard to do when it’s so far in the future, but as this article illustrates it can have major consequences.  One of your best resources is the experience of other parents, so reach out to family, friends and fellow expats and ask them their opinions and advice.

Edit:  An added resource I just came across is this article on timing and points to consider when moving children.

Travelling light

It’s a rainy afternoon and I’m throwing stuff out.  I love a good clearout.  One of the best things I’ve learned from expat life is how good it feels to get rid of all the excess stuff that weighs you down, both physically and mentally.  Stuff is what my Nana described as ”neither use nor ornament”.  It can be brand new, like the spare lightbulbs for lamps you don’t own any more, but mostly it’s used, like the clothes in your closet which don’t fit or which never did come back into fashion.

Having moved so many times in the last 13 years I’ve become almost paranoid about accumulating stuff and try my best to operate on the principle of one-in-one-out, ie buy a new shirt, throw out an old one.  Despite the fact that I’m married to a collector, living in a variety of different apartments, some large, some small, has taught me a lot. 

For example, for many years I believed I needed a big, well equipped kitchen.  In my last apartment the kitchen was so small I could barely turn around in it but I was still able to prepare exactly the same food as I did when I lived with a kitchen so vast I actually had empty cupboards.  Similarly I survived for a year without a working oven and a fridge that struggled to maintain an interior temperature of 13C in summer, so now I’m much less tempted to buy fancy appliances, gadgets and multiple dinner sets because I know the food won’t taste any better.  The company of family and good friends is more important than size and decor.

Living with less is truly liberating.  When we were young we felt footloose and fancy free in part because we didn’t have much to anchor us down.  The things we acquire all need cleaning, painting, mowing, insuring, repairing . . . and if you’re an expat, packing and moving.   It’s taken a lifetime, but I’m gradually learning that the things I value most are all in my mind – the memories of all the things I’ve done, people I’ve met, places I’ve been.  Oh, and my laptop, of course . . .  ;-)

It’s not what it used to be

I came across a couple of interesting articles online today about the current reality of expat life.

The first one is about work/life balance and the stress of expat life.  It refers to a 2007 survey of expatriates which found that on average expats worked an additional 13 hours or more per week than they did in their home countries.  Assuming they were used to working a 40 hr week, that’s a huge one third increase in working hours.  Add to that the stress of working in a different culture, language difficulties, perhaps a hardship location and lots of travel, to say nothing of missing the support of family, friends and activities at home and you can see the potential for burnout.

The second article is about cutting back on staff and travel costs and suggests that some companies are using the global recession as a reason to cut pay and benefits more aggressively than is warranted.

My reaction to both articles are that these are not news.  Expats have always worked long, hard hours and certainly in the last 13 years we have been overseas I’ve seen a gradual erosion of both salaries and benefits.  It’s a steady trend, perhaps moving a little faster right now due to the current economic situation.  In today’s world companies must compete on a global basis, which generally means using the cheapest resources to get the job done.  As countries with lower costs of living, such as India and China, produce more and more skilled professionals they will inevitably take the place of more expensive western expats, both in their own countries and overseas. 

The situation for western expats is no different from American factory workers losing their jobs to China.  We may not like it, but the trend is unstoppable and is probably a good thing if we look at the big picture.  However it does mean that in the future there will be fewer well paying jobs for western expats and most will go to senior managers and those with high level or unusual skills. 

For expats who don’t fit that profile it’s something to think about.

Re-entry shock

The practical problems arising from repatriation can be anticipated and planned for but the emotional adjustments are much more difficult to handle.  A lot has been written about the emotional toll of repatriation, but where are the constructive suggestions on what to do about it? 

While you’re away:-

Read about it.  Do an internet search on repatriaton, re-entry shock, reverse culture shock.  This will  prepare you in advance and when you’re feeling low you’ll know that you’re not alone and you’re not going mad!  Only someone who’s been through it can fully understand it.  Most family, friends and co-workers  will expect you to slot right back in after a week or two.  After all, you’re home, right?

Stay in touch with family and friends back home.  They’ll be an important support system when you return.  But also realize they can’t appreciate what you’re going through.  If you meet up with them during vacations you’ll probably notice the glazed look in their eyes when you talk about your life overseas.   The solution is to focus on what you do have in common, which is why regular contact with them while you’re away is so important. 

Keep up with the news.  Follow the local newspapers and magazines while you’re away.  Most are online these days.  Keeping abreast of the issues will help you stay connected and ease the transition.

Observe the holidays.  Of course it’s important to learn about the new culture you’re living in overseas, but don’t neglect your own traditions.  In many locations you’ll find expat clubs eager to help you celebrate everything from Thanksgiving to Novruz.

Once you’ve repatriated:-

Make some new friends to supplement your old ones, just in case you’re not as close as you were.  Not easy to do, I know.  In expat locations it’s much easier to find a fellow expat who’s looking for company.  Back home everyone seems to have known everyone since kindergarten and it can be hard to break in.  The good news though is that living overseas has probably improved your social skills.  Join a club, pursue a hobby, take a class.

Stay in touch with  your expat friends overseas.  They are a valuable emotional support network.  There’s a real temptation to hole up until you’re “over it” and perhaps some reluctance about admitting things are tough, but a complete and total silence will leave them hurt and puzzled.  Although your level of connection with them is bound to change over time it should happen slowly and naturally.  In the meantime they can provide a virtual social network for you while you rebuild and develop new friendships at home.

Give it time.  You’re grieving for your former life.  Just as it takes time to get over the death of a loved one, so it will take time to come to terms with your repatriation.  The life you had is not lost, it’s still within you.  I once read that you go out expecting to change the world and come back realizing the world changed you.  That’s very true.  Be glad you’ve had the experience and know that you are richer for it.