23 Jun 2020
What is an Expat anyway?
International moving companies like mine focus on “expats” but when asked what exactly “expats” are, I’m stumped. The word “expat”, as antiquated as it is, just won’t go away even though almost all of the generous compensation features are extinct or have been largely modified.
To most people, “expat” carries two meanings: a degree of commitment or permanence to a given work assignment, and a particular type of compensation package.
There was a time when “expat” was a specific, easily defined term. It described an individual, often with a family, working outside his home country. There was an implied assumption that an “expat” work assignment would be temporary, and the “expat” eventually intended to repatriate back to the home country.
Expats enjoyed very generous compensation packages which came about because a generation ago, incentives were required for executives to be lured outside their home country and away from the comfortable, familiar environment of the head office. Overseas assignments were seen as an adventure, but for a limited period of time if one wanted to follow the traditional route up the corporate ladder. The distinctive comp package I mentioned typically included housing, schooling for kids, home leave, clubs, generous expense accounts, and tax equalization (for US people anyway.) It was a very cushy era for “expats.”
Things have changed dramatically since then.
More and more companies have replaced the traditional “expat” comp package with a far simpler lump sum package. True, that lump sum may be more substantial (grossed up) than what the equivalent would have been in, say Cincinnati, Manchester, or Perth, but the packages are more streamlined and less intricate in today’s environment.
In addition to the career advantages of having an international assignment on your CV, the quality of life in many foreign locations these days is equal or even better than many home country locations. Therefore, the incentives that the corporation had to offer in the past are no longer required.
So, while even I use “expat” because it seems to have staying power, what I mean now better describes “a mobile, “third-country national executive.” That doesn’t roll off the tongue as easily so the “expat” verbal shortcut endures. The range of nationalities that I see now is now vastly more diverse than before. The compensation packages are structured differently, and the attitudes about living abroad are unrecognizable to “expats” from a generation ago.
From my viewpoint as a mover, the only thing that really matters to me is if an executive and/or their family is internationally mobile. It includes the traditional “expat” but it now encompasses a much larger universe.