New Job - How To Justify Higher Salary

[simon43]

I recently applied for the vacancy of Business Development Manager - (south-east Asia) with a young British technology company. The position requires a higher degree and many years of relevant sales & industry experience, (all which I have). The company had previously tried to locate a candidate who would be UK-based, without success.

I've successfully passed three interviews, and now it's down to agreeing a base salary. At my final interview in BKK, the company director has suddenly stated that the base salary is not as previously advertised for a UK-based candidate, but 'should' be nearer a 'local' salary level for the s.e. Asia region. (They are talking about a base salary that is 50% of the salary that they were considering for a UK-based employee). His justification is that the company can quite rightly save money by recruiting a local candidate. However, he also comments that whilst they want a local candidate, they do not really want to employ an Asian, (ie, a white face will be more successful in this role!).

Clearly, when they were seeking a UK-based candidate, they had the budget to pay the UK salary level, plus relevant tax/social security payments etc. They acknowledge that an employee based in s.e. Asia will save the company in terms of airfares, telephone call costs, and probably tax/social securirty payments etc etc

I understand that the cost of living in Thailand is cheaper than the UK, and so a reduction in my base salary is reasonable. But what means can I use to justify and hence maximise the base salary that is offered to me?

What is the comparative Cost of Living Index for Bangkok and a UK rural city?

With the falling exchange rates, should I ask for my salary to be paid offshore in sterling, (with a small proportion paid locally in Thailand?)

Any advice is much appreciated!

Simon

Edited January 25, 2009 by simon43

[eggomaniac]

Clearly, when they were seeking a UK-based candidate, they had the budget to pay the UK salary level, plus relevant tax/social security payments etc. They acknowledge that an employee based in s.e. Asia will save the company in terms of airfares, telephone call costs, and probably tax/social securirty payments etc etc

I understand that the cost of living in Thailand is cheaper than the UK, and so a reduction in my base salary is reasonable. But what means can I use to justify and hence maximise the base salary that is offered to me?

What is the comparative Cost of Living Index for Bangkok and a UK rural city?

Simon

I think the first point cancels out the second.

On the third point, from another post, you own a hotel in Thailand? You probably know better than most what the living costs are, and will you have to hire someone to run your hotel?

My advice is use 'your' knowledge of labor and living conditions in Thailand, which is probably as good as most, figure out what salary 'you' can afford to take this job, compared to your other business and employment opportunities. If you go into it 'feeling' you've been undercut it won't be good for you or them.

Another thing, you said it was a 'young' company; you mean 'start up'? What is the success rate of new businesses in Thailand in 'good times'; 20%???

Maybe you can offer the same services???

[eggomaniac]

Simon, you seem like a good guy, and I hope the usual flamers don't chime in, however the more I read your Topic the more it makes me wonder what you are getting yourself into? It is possible constructive criticism is worth considering?

-----------------------------

I recently applied for the vacancy of Business Development Manager - (south-east Asia) with a young [as in 'start up'] British technology company. The position requires a higher degree and many years of relevant sales & industry experience, (all which I have). The company had previously tried to locate a candidate who would be UK-based, without success. <<< This makes absolutely no sense, to me. There are companies going under all over. If they paid me a one week trip to Britain, I could find them a raft of qualified candidates who would JUMP at a job in Thailand with Western Pay scale.

I've successfully passed three interviews, and now it's down to agreeing a base salary. At my final interview in BKK, the company director has suddenly stated that the base salary is not as previously advertised for a UK-based candidate, but 'should' be nearer a 'local' salary level for the s.e. Asia region. (They are talking about a base salary that is 50% of the salary that they were considering for a UK-based employee). His justification is that the company can quite rightly save money by recruiting a local candidate. They only had the brains to think of this AFTER an exhaustive search in the UK? However, he also comments that whilst they want a local candidate, they do not really want to employ an Asian, (ie, a white face will be more successful in this role!). <<<things that make you go hmmmm

Clearly, when they were seeking a UK-based candidate, they had the budget to pay the UK salary level, plus relevant tax/social security payments etc. They acknowledge that an employee based in s.e. Asia will save the company in terms of airfares, telephone call costs, and probably tax/social securirty payments etc etc

In my humble opinion, they are not being honest with you? Methinks, for example, if you ran a Craigslist advert in London for a UK-based candidate for this type of job, your Inbox would be flooded!

I understand that the cost of living in Thailand is cheaper than the UK, and so a reduction in my base salary is reasonable. But what means can I use to justify and hence maximise the base salary that is offered to me?

What is the comparative Cost of Living Index for Bangkok and a UK rural city?

With the falling exchange rates, should I ask for my salary to be paid offshore in sterling, (with a small proportion paid locally in Thailand?)

Are you a Brit? Ask for a WP and UK based salary that contributes towards your pension.

Any advice is much appreciated!

Simon

[Indo-Siam]

In a rational marketplace, the way things should work is that each employee's contribution to an employer should be to (effectively, one way or another) bring in enough marginal revenue to cover the employee's burdened salary, plus some amount of profit for the employer.

Meaning - if the employee was not there, the company would lose profit, as well as lose the cost recovery for the position (which would fall to zero if the employee was not there).

So - you are taking a BDM position - which should pretty clearly be linked to bringing in additional revenue.

Once you take the job, you are either going to succeed, or you are going to fail. If you succeed, you will at least bring in enough revenue to offset the cost of employing you (most of which will be your salary), plus, hopefully, you will generate marginal profit for the employer.

If you fail to generate sufficient new marginal income to offset the cost of employing you - then it ends up being a mistake to have hired you - the employer would have been better off - net - by never hiring you.

So - here you stand at the opening gate - and your employer has reservations. They KNOW that from the outset, they are going to lose money - because you are probably unlikely to bring in sufficient revenue in first month to offset your expense to the company. So - the employer is trying to limit that early expense - by giving you a low initial salary.

What I would suggest is that you consider going along with things from the employer's perspective - thereby minimizing the depth of the initial "hole" you dig in creating accumulated costs that are not offset by marginal revenue that you bring in. You start work, and your goal is to bring in sufficient cumulative marginal revenue to fully offset the cumulative cost of your employment to your employer. If you succeed, then the day will come when you hit exact break-even - meaning that the cost to the company of employing you since day one will have effectively been zero.

You then want to begin earning net profit for the company - hopefully by adding recurring profitable business. At an appropriate time, you then are in position to ask for some of the recurring profit to be redistributed as additional salary to you. The risk here is if the employer can then terminate your employment, replace you with a lower cost employee, and still continue to earn the new profit stream that you created. If you can create in the employer's mind the perception that retaining you - and rewarding you handsomely - is an assured way to both hang onto current profit stream, and also bring in further levels of additional recurring profit - then they have every reason to agree to pay you more.

That's the long version. The short version is:

"OK, I accept your initial offer - but only on the condition that we agree that after 'x' months, we will revisit the issue of my compensation, and - if I am not satisfied at that point - you should expect me to cease my employment. It is my intention to perform so well, and bring you so much profit, that you will be happy to increase my salary to "xx," once I have proven to you what I can achieve".

"Business Development" is effectively "Sales" - and there should probably be a commission component in the salary (or "bonus").

Good luck!

Steve

Indo-Siam

[GuestHouse]

The only bargaining chip you really have is to walk away from the job offer.

The company making this offer have changed the offer they have made - while on the other and they have taken your selection to three interviews (they are clearly interested in recruiting you but it seems they believe that you will accept a lower offer).

The issue then seems to be that the company need to be in Thailand (they clearly need to have a presence in Thailand and are looking for someone of your capabilities) - They are assuming that you need to be in Thailand more than you need their originally advertised rates.

They are not in a position not to be in Thailand while you are (at least in their minds) bargaining for two things - an expat deal + to be in Thailand.

You need to play your hand a little harder and tell them that you are not willing to take a local deal for your international education and experience. You are bringing and international package to the table, so should they.

They only way to do that is to let them know you are willing to walk away from the deal.

[Naam]

They only way to do that is to let them know you are willing to walk away from the deal.

i share this opinion although it should have made been clear at an earlier stage (immediately after the offer was changed).

[kiakaha]

With the falling exchange rates, should I ask for my salary to be paid offshore in sterling, (with a small proportion paid locally in Thailand?)

you have to pay PIT(personal income tax) on the thai baht value of your salary simon. then when the net amount of your pay is paid into your bank account in thailand, there is nothing stopping you from wiring the money into a sterling account somewhere else.

if however you are referring to "salary splitting", such as is used by many senior managers/executives of multinationals working in bangkok where a nominal salary is paid in thailand to satisfy work permit, tax, permit of stay extension, provident fund, social security requirements etc... and the rest of the salary/bonuses is paid offshore....many at my company do this, its a bit of a grey area legally as you should be paying tax in thailand on your full remuneration...but it operates under the premise that the offshore amount transfers are conducted entirely offshore(orginating and destination accounts)..so the thai revenue department is none the wiser......you'd have to ask your thai boss...basically if he/she isn't getting this deal, fat chance you will get it.

[Chang_paarp]

Simon

Are they paying you in pounds, USD or Baht? To your company in VI, you in UK or in Thailand. Given the less than stellar performance of the pound you could end up with some issues there.

Also remind the folk that yes it is cheap to live in Thailand........ If you live outside the larger cities and you live like a Thai, however if they want you to project the proffesional image that is needed to build their business. The costs are not that dissimilar and given the state of the puond they could end up more expensive than in England. While rents are relatively cheap, the cost of basics such as milk bread and cheese is much higher than England. As you will be developing the business you will need to look at entertainment expences, these are not that dissimilar, compare the price of a beer or a bottle of wine at a pub or 3 star hotel in your examples. Their saving is in the airfares, not having to expatriate a family wit all the associated costs and the time savings of having a local person on the ground, not the salary. As Indo Siam pointed out you are there to increase business, so an incentive system would be good if they want to go cheap on the salary. You also have to ask if they are aware of all the hoops to jump through if they are setting up a branch office in SE Asia if that is their aim. (W/P, visas, local employees...)

I know a couple of people who live in LOS and do this type of work all over SE Asia, they "officially" do not work in LOS, they have multi entry business visas and travel all over SEA to do business.

[simon43]

Some very good advice here. I can clarify some of the points:

- The company is young but already successful in other territories (Europe, USA).

- Due to the specialised nature of the industry sector (professional radio communications infrastructure), and need to have a candidate with industry contacts, industry 'presence', technical knowledge etc, the company has been unable to find any suitable candidates in the UK/Europe or Middle East, despite searching for 6 months (and using recruitment agencies, Jobserve etc etc).

- My existing hotel business is irrelevant because that is the business of my 'ex-wife'. I can still base myself nearby in case she screws it all up

- The role is BDM for all of s.e. Asia. The company is not interested where I make my home location, so long as it is in s.e. Asia. So there is (initially), no office. It's home-working. (That raises issues about how to legally work in Thailand in this manner...).

- The package consists of base salary, commission and an expense component (to cover flights, hotels as I 'jetset' around Asia!. The company is willing to pay me anywhere (eg offshore). (I need to ensure that whatever arrangement is agreed, that it is legal!)

- The technology sector is such that the company thinks that it will be realistically 1 year before they see any return on their 'investment' in me.

Indo-Siam & Guesthouse, I agree with your take on this. I'll take the stance that an initial lower (but not LOW) salary is acceptable (to reduce the company's financial 'risk' in venturing into this new territory), but that my base should be suitably increased if I bring in the business after 12 months.

Simon

[Chang_paarp]

Some very good advice here. I can clarify some of the points:

- The company is young but already successful in other territories (Europe, USA).

- Due to the specialised nature of the industry sector (professional radio communications infrastructure), and need to have a candidate with industry contacts, industry 'presence', technical knowledge etc, the company has been unable to find any suitable candidates in the UK/Europe or Middle East, despite searching for 6 months (and using recruitment agencies, Jobserve etc etc).

- My existing hotel business is irrelevant because that is the business of my 'ex-wife'. I can still base myself nearby in case she screws it all up

- The role is BDM for all of s.e. Asia. The company is not interested where I make my home location, so long as it is in s.e. Asia. So there is (initially), no office. It's home-working. (That raises issues about how to legally work in Thailand in this manner...).

- The package consists of base salary, commission and an expense component (to cover flights, hotels as I 'jetset' around Asia!. The company is willing to pay me anywhere (eg offshore). (I need to ensure that whatever arrangement is agreed, that it is legal!)

- The technology sector is such that the company thinks that it will be realistically 1 year before they see any return on their 'investment' in me.

Indo-Siam & Guesthouse, I agree with your take on this. I'll take the stance that an initial lower (but not LOW) salary is acceptable (to reduce the company's financial 'risk' in venturing into this new territory), but that my base should be suitably increased if I bring in the business after 12 months.

Simon

Simon

"Officially" a business visa allows you to attend meetings and develop business in Thailand. If you are using your home office there should be no great problems so long as you have not upset the neighbours . Recieving mail and the odd parcel should be OK, but I am not qualified to make this legal advise.

For some things a serviced office in Singapore or KL may be better, it would be worth investing a couple of hours to accertain what the rules are there, both are very business friendly.

Good luck I hope you do well.

[steelepulse]

If you're the only qualified candidate that they have found in 6 months of searching, you should be able to call the shots or walk away.  Why settle for half salary as it sounds like it's a tough position to fill?

[GuestHouse]

Indo-Siam & Guesthouse, I agree with your take on this. I'll take the stance that an initial lower (but not LOW) salary is acceptable (to reduce the company's financial 'risk' in venturing into this new territory), but that my base should be suitably increased if I bring in the business after 12 months.

Again, I think you are underselling yourself.

Request the full deal - if you haven't brought the business in after twelve months they can fire you (Remember your incentive to perform is your commission, not the promise of a real salary - remember too the old adage 'Bread eaten is bread forgotten).

[kiakaha]

- The role is BDM for all of s.e. Asia. The company is not interested where I make my home location, so long as it is in s.e. Asia. So there is (initially), no office. It's home-working. (That raises issues about how to legally work in Thailand in this manner...).

Is the company incorporated in UK and also in Thailand ?

Contractually will you be an employee of the UK or Thailand company ?

Where do you intend to pay your taxes ?

1) employed by the UK company, pay tax in UK, travelling through SE Asia on business expense account "conducting business"

2) employed by the Thai company, get work permit and tax id, pay tax in thailand.

From a legal/tax residency perspective, if you are resident in thailand(http://www.rd.go.th/publish/6045.0.html) and your work base is in Thailand and you want to be 100% legal, then you will need a company sponsored work permit, then you can get your tax id and pay PIT(personal income tax) etc....

Of course there is the dodge tax/fly under the radar option, but obviously this is not legal so I wouldn't advocate it.

[simon43]

Steelepulse, that's true. We have to agree on a figure that keeps us both happy, but is not so excessive that it is cheaper for them to just send an existing employee from the UK on a longhaul flight!

Simon

[think_too_mut]

In a rational marketplace, the way things should work is that each employee's contribution to an employer should be to (effectively, one way or another) bring in enough marginal revenue to cover the employee's burdened salary, plus some amount of profit for the employer.

Meaning - if the employee was not there, the company would lose profit, as well as lose the cost recovery for the position (which would fall to zero if the employee was not there).

So - you are taking a BDM position - which should pretty clearly be linked to bringing in additional revenue.

Once you take the job, you are either going to succeed, or you are going to fail. If you succeed, you will at least bring in enough revenue to offset the cost of employing you (most of which will be your salary), plus, hopefully, you will generate marginal profit for the employer.

If you fail to generate sufficient new marginal income to offset the cost of employing you - then it ends up being a mistake to have hired you - the employer would have been better off - net - by never hiring you.

So - here you stand at the opening gate - and your employer has reservations. They KNOW that from the outset, they are going to lose money - because you are probably unlikely to bring in sufficient revenue in first month to offset your expense to the company. So - the employer is trying to limit that early expense - by giving you a low initial salary.

What I would suggest is that you consider going along with things from the employer's perspective - thereby minimizing the depth of the initial "hole" you dig in creating accumulated costs that are not offset by marginal revenue that you bring in. You start work, and your goal is to bring in sufficient cumulative marginal revenue to fully offset the cumulative cost of your employment to your employer. If you succeed, then the day will come when you hit exact break-even - meaning that the cost to the company of employing you since day one will have effectively been zero.

You then want to begin earning net profit for the company - hopefully by adding recurring profitable business. At an appropriate time, you then are in position to ask for some of the recurring profit to be redistributed as additional salary to you. The risk here is if the employer can then terminate your employment, replace you with a lower cost employee, and still continue to earn the new profit stream that you created. If you can create in the employer's mind the perception that retaining you - and rewarding you handsomely - is an assured way to both hang onto current profit stream, and also bring in further levels of additional recurring profit - then they have every reason to agree to pay you more.

That's the long version. The short version is:

"OK, I accept your initial offer - but only on the condition that we agree that after 'x' months, we will revisit the issue of my compensation, and - if I am not satisfied at that point - you should expect me to cease my employment. It is my intention to perform so well, and bring you so much profit, that you will be happy to increase my salary to "xx," once I have proven to you what I can achieve".

"Business Development" is effectively "Sales" - and there should probably be a commission component in the salary (or "bonus").

Good luck!

Steve

Indo-Siam

The post is rather naive in it's patronizing tone.

To the short version:

If a company would accept talking that way it would probably be a small shithole or I would be desperate to take the job or both. Then, I would just take it, whatever it is.

Serious companies have their salary ranges for each country they operate in. When a headcount is approved, there is no talk how much and how soon and at what margin the candidate delivers. He is being hired as they believe he can do what the position is created for.

Especially not about saving them on phone calls, cleaning or electricity. I would just jump up and walk out from the interview if someone raised that question.

My company has their scale for Thailand. This kind of job (BDM) is always given to locals and I think their salary range is 30-45K US$ a year (depending on previous experience) + commission.

What may apply to the OP:

If the candidate is to be seen as a local hire there is no chance he will be able to cash in his farangness down the track. He might, but only through good sales and his commission. A foreigner might get it too, but under local conditions.

The commission scale is precisely defined and known, nothing in that to talk about. That's the essence of sales job, it's not left murky.

So, once appointed, other than talking about meeting the quota at known checkpoints in time, nothing else is there to discuss.

[rgs2001uk]

The question you should be asking yourself is, can I afford to turn this job down?

If the answer is yes, then hold out for what you feel you are worth.

If the answer is no, then accept the job and look around for alternative employment.

None of us know what your career field is or how often such openings arise in Thailand only you can answer.

Whats so special about Thailand that keeps you here? If you dont feel you are being paid what you are worth here go elsewhere and get the going rate for the job, never understood why people sell themselves short just to stay in Thailand, its your financial future at stake here.

[simon43]

rgs2001tuk, the job is s.e. Asia based, not Thailand-based. I choose to stay in LoS because my son is here. If that were not the case then anywhere on Planet Earth would be an acceptable job location:)

Simon

Edited January 26, 2009 by simon43

[PattayaParent]

Tell them if they want to employ an expat on a local salary there are many Farangs in the bars of Soi Cowboy, Nana Plaza or Pattaya that will be only too willing to work for them.

But if they want a qualified expat then they should pay the going rate.

[yabaaaa]

I recently applied for the vacancy of Business Development Manager - (south-east Asia) with a young British technology company. The position requires a higher degree and many years of relevant sales & industry experience, (all which I have). The company had previously tried to locate a candidate who would be UK-based, without success.

I've successfully passed three interviews, and now it's down to agreeing a base salary. At my final interview in BKK, the company director has suddenly stated that the base salary is not as previously advertised for a UK-based candidate, but 'should' be nearer a 'local' salary level for the s.e. Asia region. (They are talking about a base salary that is 50% of the salary that they were considering for a UK-based employee). His justification is that the company can quite rightly save money by recruiting a local candidate. However, he also comments that whilst they want a local candidate, they do not really want to employ an Asian, (ie, a white face will be more successful in this role!).

Clearly, when they were seeking a UK-based candidate, they had the budget to pay the UK salary level, plus relevant tax/social security payments etc. They acknowledge that an employee based in s.e. Asia will save the company in terms of airfares, telephone call costs, and probably tax/social securirty payments etc etc

I understand that the cost of living in Thailand is cheaper than the UK, and so a reduction in my base salary is reasonable. But what means can I use to justify and hence maximise the base salary that is offered to me?

What is the comparative Cost of Living Index for Bangkok and a UK rural city?

With the falling exchange rates, should I ask for my salary to be paid offshore in sterling, (with a small proportion paid locally in Thailand?)

Any advice is much appreciated!

Simon

Compromise meet em at 75% of the Uk salary, its hard times now, be lucky you have been offered this job.

[think_too_mut]

Compromise meet em at 75% of the Uk salary, its hard times now, be lucky you have been offered this job.

If the company is any good, they would have 3 rules:

1. The hire is local or "has to be seen on the books as local" (no expat salary and perks)

2. The range is 30-40K $, for example, salary can only slide within those brackets

3. The commissioin % is as per a known scale

Unbelievable how many people have no clue how hiring works, no wonder many companies shread CVs of local farangs as soon as they realize they are already in Thailand.

Looks like replies here come from people who know of places no better than boiler rooms or time share scumbags.

Try horse trading with a serious company and they will think you have gone insane, may even double check the guy who brought you up to that point in the hiring process.

Edited January 26, 2009 by think_too_mut