Source of intrigue, jealousy and often downright bitter resentment: the ex-pat package. It\u2019s the subject of hearsay and Chinese whispers and someone else has always got a better deal (or, in the case of journalists, everyone else). We\u2019ve all heard tales of the company who caters for every whim \u2013 from the villa accommodation right down to your dog\u2019s diamond collar. But the times they are a-changing in Shanghai \u2013 and so are the expats who work here.<\/p>\n\n\n\n
Ten years ago a traditional employment contract would have likely included regular R&R (rest and relaxation) trips to the nearest comfortable place to recover from the \u2018horror\u2019 of Shanghai. Today, with a Starbucks on every corner, fine wines in every restaurant and a Zara in every mall, this city is no longer such a stressful place to live. \u201cThe R&R trips are virtually non-existent in Shanghai today,\u201d says Kate Lorenz, Managing Director of Ark International, an orientation and housing company. \u201cIt isn\u2019t the hardship posting it used to be and we\u2019re seeing many of our clients downgrade the city\u2019s rating as a difficult place to live.\u201d<\/p>\n\n\n\n
Downgrading the city isn\u2019t simply a way for companies to pay their employees less, though that may be the end result. It is supported by a wave of willing expats who are actively seeking to come here and don\u2019t need the traditional enticements offered in the past. Such expats bring competition for jobs and consequently cuts in packages. For many mid-level employees looking to take a step up the career ladder, Shanghai is the perfect opportunity; people are swapping the package for a promotion.<\/p>\n\n\n\n
That\u2019s not to say employment packages no longer exist. Other than the R&R trips, Lorenz is not seeing swingeing cuts but witnessing a more subtle change.<\/p>\n\n\n\n
\u201cMore people are becoming what we call half-pats: they take a monthly lump sum with which they pay their own accommodation and school fees and whatever else. Employees can make their own decisions about what to prioritize and the company invariably saves money.\u201d<\/p>\n\n\n\n
Beverly Burgess, Regional Marketing Manager for eBay Beverly willingly moved from Sydney to Shanghai in early 2019. \u201cThe economy wasn\u2019t doing so well in Australia and so I was looking to move somewhere more prosperous.\u201d<\/p>\n\n\n\n
Package includes:<\/strong><\/p>\n\n\n\n This is the path that eBay has taken in China. \u201cWe don\u2019t offer a standard expat package,\u201d says Jing Huang, head of human resources for eBay in China. \u201cEach individual is offered a tailor-made deal, usually with a transition bonus that takes into account their level within the company and situation in their home country.\u201d<\/p>\n\n\n\n Employees with families are a particularly expensive option for companies, because they require additional health insurance and school fees. Anna Wethered, China Country Manager for Orientations, a global relocation company with offices in Shanghai, says she has noticed a recent change in the expat demographic coming to the city. \u201cIt\u2019s hard to know how much what we\u2019ve seen is a true indicator, but anecdotally it would seem companies are, where possible, opting to employ people who don\u2019t come with two children and an RMB400,000 school fee bill.\u201d<\/p>\n\n\n\n Mr. X Teacher at Shanghai American School Mr. X wishes to remain anonymous. \u201cOur package is extremely generous. My salary is similar to back home, but all the added extras mean I save much more.\u201d<\/p>\n\n\n\n Package includes:<\/strong><\/p>\n\n\n\n Another recent phenomenon is an increase in \u2018localization\u2019 packages where employees are offered a contract with benefits gradually stripped away as they get used to living in Shanghai. This might mean that accommodation is paid for the first year, half-paid for the second year and then not paid at all after that. \u201cWe have seen a huge growth in localization packages over the past couple of years. <\/p>\n\n\n\n Companies recognize that setting up here is still a difficult task for families, but aim to reduce the costs for the company over the long term,\u201d says Wethered. But what of that vast shapeless destroyer, the global recession \u2013 how is this affecting Shanghai? Wethered wonders if it\u2019s had much impact. \u201cWe have heard a lot of talk about plummeting rental prices and swathes of expats returning home, but this isn\u2019t the reality we are experiencing,\u201d she says. \u201cA handful of people bagged a good deal, but by and large rentals have remained stable \u2013 particularly in the popular expat areas like Jinqiao. Already this year we have seen around a 15 percent increase in rental prices.\u201d<\/p>\n\n\n\n Bevis Jones Visual Effects Supervisor, Bevis moved from London with his family last August. \u201cI came here because of the opportunities that simply aren\u2019t available back home. I pay school fees of RMB200,000 a year out of my own pocket.\u201d<\/p>\n\n\n\n Package includes:<\/strong><\/p>\n\n\n\n The schools, often a reliable litmus test for the health of the expat economy, seem to tell a similar story. Harlan Lyso, Superintendent at Shanghai American School, believes the international schools all took a bit of a hit in terms of numbers, but most have recovered quickly.<\/p>\n\n\n\n \u201cWe are already back up to 2018 figures and we are projecting that the 2019\/2020 school year will see our highest enrollment yet,\u201d says Lyso. SAS sees the situation from both sides of the coin, as it is currently also China\u2019s biggest expat employer, with more than 300 overseas staff on the books. \u201cWe are not cutting back what we offer staff,\u201d says Lyso. \u201cThis year we have increased teachers\u2019 salaries by four percent and maintained a comprehensive employment package.\u201d He believes these steps are necessary to attract the very best teachers and therefore keep numbers high.<\/p>\n\n\n\n Mr. X Engineering Senior Project Manager Mr. X wishes to remain anonymous. \u201cI think we get a pretty good deal. I don\u2019t know how it compares with others.\u201d<\/p>\n\n\n\n Package includes:<\/strong><\/p>\n\n\n\n A recent HSBC report looking into expats\u2019 finances across the globe reported that 30 percent of expats in China have scaled down their spending on essential day-to-day items. This sounds like a significant belt-tightening, but when you compare that with the 79 percent in the US or 75 percent in the UK, China doesn\u2019t look so bad. In fact, HSBC rates China as number 11 out of 26 in the top locations for global expat finances. The scale is worked out by a combination of expat disposable income, savings and luxury items owned. Russia was listed as the number one place for an expat to make money and France was at the bottom at number 26.<\/p>\n\n\n\n Dr. Gregg Miller Emergency Physician, Shanghai United Family Hospital. \u201cExpat doctors often make less money here than in their home country. I make two-thirds of what I did in the US. Doctors come here for the experience or as trailing spouses, not to make money.\u201d<\/p>\n\n\n\n Package includes:<\/strong><\/p>\n\n\n\n Today in Shanghai we are seeing a more integrated expat population, not simply confined to compounds and chauffeur-driven cars. Part of that is to do with the sheer volume of people coming to the city. <\/p>\n\n\n\n In the top-level jobs these packages still exist, but what we are seeing now is companies expanding and offering more mid-level positions. <\/p>\n\n\n\n The lavish packages haven\u2019t disappeared; they have simply been watered down. \u201cA company bringing in a top level executive is still going to have to provide a package to suit \u2013 and that includes an RMB70,000 per month villa, a car and driver and all the trimmings,\u201d says Lorenz. \u201cBut the reality for most people is that expat packages have changed forever.\u201d<\/p>\n\n\n\n Real deal breakers we encountered:<\/p>\n\n\n\nThe School Teacher package<\/h3>\n\n\n\n
The opportunist expat package<\/h3>\n\n\n\n
Full expat relocation package<\/h3>\n\n\n\n
The Expat Doctor Package<\/h3>\n\n\n\n
I won\u2019t come unless\u2026.<\/h3>\n\n\n\n