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Housing as Compensation

20 January, 2013

Last week I spoke to a group of HR leaders in Singapore about housing for foreign talent, at a private client event hosted by Far East Organization, Singapore’s largest private corporate landlord. In preparation, I reflected on my own housing journey in Singapore, as I am now in my third apartment here. My own experience illustrates the main points I shared, that not all foreigners are “expatriates” on a full expat package, that foreigners who are hired on a local package have different needs, and that the longer one is here, the more willing they will be to live further out from central areas.

Singapore Part I–Full Expatriate Package

I had been asked to move to Singapore as VP of Compensation and Benefits for InterContinental Hotels Group, leaving that role for the Americas Region to now look after Asia Pacific. One of my objectives was to get certain mobility practices better aligned with the rest of the company and support the needs of the business better. Part of the package I was offered was free housing in Singapore. The budget was set at the “market” level, a number that was nearly equal to my salary. I was astounded at the cost of housing in Singapore! I owned a large home in Atlanta with a monthly mortgage payment of less than $2,000 per month, but my company was going to pay more than five times that amount for a place that was actually smaller than my home in Atlanta.

We moved in, got to know the neighborhood (American Club, Orchard Road, Shangri-La Hotel, you get the idea). I heard from others that we were living in one of the nicest apartments in Singapore, and we even hired a maid to clean and cook for us a couple days per week. I had never had maid service before! After a while we adjusted and it all felt normal.

After three years, I had completed my assignment objectives: hire local talent, get the right policies and practices in place, line up management support for the way things must be done and hand over all key duties to the team I had put in place for the region. So I was repatriated in September 2010 back to the U.S.A. We were a bit disappointed since we really loved Singapore. We learned once more to wash our dishes and windows, and we now had to drive long distances to go shopping. But of course it was nice to be home.

Singapore Part II–Local Package

Well, we missed Singapore and my best career options were in Asia. So I found an opportunity with Mercer–Asia’s #1 HR consulting firm–to help lead their mobility business for the region. I was so excited to return to Singapore! As an expert in mobility, I was curious what type of package Mercer would offer… They offered me a local contract! Actually, I knew this was fully in line with the trend, but it became real to me when all I saw was a salary offer with standard benefits, etc. I decided to accept the offer as it appeared competitive, and for the chance to work with a great firm like Mercer.

This time I did my research. I spent hours on propertyguru.com checking out my options, and I got advice from some agents I know. As I was fully responsible for my own housing, I found a suitable place near work, with a rent roughly one-third what it was when my company paid for it. At least I was near my office, and also near Marina Bay. I could take morning runs around the Bay, or cut under the Helix bridge to the new Gardens by the Bay. I had a nice view from the 19th floor, including Marina Bay Sands, the sea to the south and Sentosa to the west. I could also count 34 cranes from my window, as construction never ceases in the CBD.

Singapore Part III–No Package

Well, now I am freelancing, obviously. Otherwise I wouldn’t have all this time on my hands, writing blogs! With no steady paycheck every month, I must generate my own income. My rent? As this is my startup period, I am paying only about one-third the rent I was paying while with Mercer. Hopefully, as my business develops, I will move into more permanent housing. But for now a smaller place near Kovan MRT will do! It’s very peaceful, I can walk to church, and there’s a mall with a big hawker center nearby. There are several Thai, Korean, Chinese and western restaurants in walking distance. Even a bar with karaoke…

Once my consulting business is stabilized, I will finally look for longer-term housing. I have given up on having a landed house, strongly favoring the condo lifestyle with security, a gym, etc. I mentioned Far East Organization earlier. I was not aware until this speaking engagement just how many great properties they offer around the island, but next time I’m on the market I will certainly give them a close look. Sometimes you can get a “wacko” landlord when working only through agents, but with a group like Far East I imagine it’s safer since they have a standard lease template, and they have a bigger reputation to protect than most landlords.*

Implications for Managing Housing for Foreign Talent

Here are a few considerations for employers:

1. In addition to traditional expatriates, who will most likely be repatriated, there are more and more foreigners in Singapore who are locally hired or permanently transfered here, typically on local or “local plus” packages. Local plus packages in Singapore are generally cash-based, including a highly competitive salary and a cash allowance to help the foreign talent adjust to high housing (or schooling) costs.

2. In addition to company leases, it is important that those responsible for their own housing get some support finding suitable, affordable housing in Singapore.

3. Housing solutions should be reliable, and protect your people from unpleasant surprises. This way, they are not distracted during the day, and can focus better on their work. Most expat assignments that fail, fail due to family reasons, and a good living situation is essential to a happy home, in my experience.

For more insights on foreign housing trends, or assistance aligning your company’s housing or mobility policies, contact me at Freelance Total Rewards. If you are managing your company’s corporate housing in Singapore, give Far East a look*.

*as an independent consultant, I do not endorse specific providers in return for compensation. I will always give my honest opinion!

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