Friday, November 25, 2011

Singapore Hong Kong Expatriate Packages are shrinking

Banking and Financial job cuts by 2011 are in the news around the world. Western banks are aggressively cutting jobs to prepare themselves for the new normal and any future global scale financial problems especially in USA and Europe. The job cutting axe has also started to fall on banking and finance jobs in Asia, particularly the financial centers Hong Kong and Singapore. But the cuts were not aggressive here and has mainly been the problem of western bankers. But the aggressive job cuts in the west are having a direct and very important effect in Singapore: shrinking expatriate package.

Expatriate packages for bankers and financial services industry high fliers from West have been very generous until recently: housing and car allowances, job for spouse, club memberships on the top of free tickets every year back to homeland, free relocation as well as 1 month free service apartment stay in the first month of employment. But since 2008, the expatriate packages are shrinking and luxuries like housing allowances are not included in the standard package any more. This is because the excessive bonuses as well as job opportunities are shrinking in Europe and USA and there are many who would work in Singapore or Hong Kong for only(!) a monthly salary and bonus.

Housing allowances in the expatriate packages for "foreign talent" are one of the main drivers of rents in Singapore, especially the luxury segment of the city centers. In the past a banker or financial services high flyer would expect 100% housing allowance in luxury condominium rentals. This is shrinking and the effect is already felt in Singapore as District 9,10,11 rents fell first time in 4 years.

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