Jobless and broke from the pandemic, many of the world’s expat workers head home

Aug 28, 2020 | 15 comments

By Ollie Williams

The golden age of fat tax-free salaries and cushy overseas lifestyles has passed, killed by the coronavirus. Expats are no longer living the dream, they say, as many prepare to come home.

An ironic message welcomes expats and tourists in the UAE.

A typical expat weekend in Dubai used to revolve around brunch. Mid Saturday morning, friends would gather in air conditioned restaurants near the beach. Food and drink would be on tap, until the party moved onto a bar, beach or yacht.

Not any longer. Even as some coronavirus restrictions are relaxed in the UAE, Zahra Clark says she is noticing less expats in the bars and on the beaches. “I’m starting to see less expats around and it’s very noticeable. Less British as well.”

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It’s not just during the weekends she sees fewer expats around. Clark is the head of MENA for Tiger Recruitment and finds staff for royal families, ultra high net worth individuals and multinational companies across the Gulf region.

That recruitment has slowed rapidly, she says: “Multinational firms at the moment have massive hiring freezes on. They have changed the packages for expats so what used to be the fabulous, ‘We’ll relocate you, we’ll pay your housing, we’ll give you a car allowance and we’ll pay your schooling plus a salary on top of that.’ Those days are long gone.”

It is now simply too expensive, says an internal recruiter at BP: “An expat salary is four times that of a local.” Expats with multinationals, like BP, often have their housing and children’s schooling paid for. But these are becoming too expensive. A survey in June found that cities frequented by expats had become the priciest in the world. After Hong Kong, oil rich Ashgabat was the world’s most expensive city. Dubai was 23rd.

Oxford Economics estimate 10% of residents in the UAE could leave as jobs are cut and the number could be far higher. Dubai, which woos wealthier expats with plush malls, fancy restaurants and tax breaks, is the Emirate most likely to bear the brunt of this.

Before social distancing, English-speaking expats would gather for events such as this in Dubai.

For the young expat crowd this might mean fewer brunch parties. But it is families that will be most affected, says Clark: “Say if one member of the family loses their job and you have children and you don’t get schooling allowances, people are saying: ‘Well it makes sense for us to go back to the U.K. or U.S. where we get free schooling.’

“It’s the expense of schools. As soon as one parent loses their job, unless they can get another job, they normally leave.”

Where are these expats going once they get home? It’s the suburbs, says Knight Frank, a real estate agency. Nearly half (43%) of returning expats are looking to buy properties in suburbia according to a survey in June and demand has only increased since.

“Time in lockdown has underlined the importance of family for many and focused their minds on the type of lifestyle they want to lead,” says Victoria Garrett, Knight Frank’s head of residential in Asia-Pacific.

New Zealanders were the largest group returning home, which is hardly surprising given the country has been one of the most successful in fending off Covid-19. Others have come home to the U.K. and U.S. from postings in China, Singapore, Hong Kong and the UAE.

In Ireland, 29,000 citizens returned home, according to the Central Statistics Office, the highest number for 13 years. Most returnees want access to good schools, high quality amenities, parks and beaches and proximity to family members, says Ray Palmer-Smith, Knight Frank’s director of new homes in Ireland.

Currently, there is little flow in the other direction. The number of visas issued by Hong Kong’s immigration department for professional jobs has dropped more than 60% from January to June this year. Kuwait, another Gulf expat haven, says it will dismiss half of foreign staff in government ministries as it seeks to employ more locals.

Singapore, which is the fifth most expensive city in the world, has tightened its employment passes for foreign workers. From December, firms in Singapore can only hire foreigners earning at least $3,717 a month, and only then after advertising to locals first. Bloomberg says 47 companies are on a watch-list for suspected discriminatory hiring practices.

Many multinationals are following suit and replacing expats with locals who are often cheaper, speak the language and stay in jobs for longer. It also reduces the risk of expensive repatriations in the event of another another global pandemic. In March, when airlines were grounding flights, multinationals spent millions on private jets just to get staff home.

For the career-climbing expat, this means fewer opportunities for foreign fortunes. But given the volatility in international travel some are happy with that. “It’s not until something like this happens until you realize how far you are away from home and if there was an emergency how do you get back,” asks Clark.
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Credit: Forbes

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