I read an article recently on ClearnaceJobs about overseas opportunities. The article was very formulaic and I consider very low on substance. The person who wrote the article in all likelihood had little experience with careers overseas. I figure I would write a blog post featuring some of the experience and lessons I have gained from the experience.
What is the strategic outlook for careers overseas?
I have to confess that I am not optimistic about the future of jobs overseas. A lot of contractors went overseas to Iraq and Afghanistan. The game abruptly ended in Iraq with the failure to negotiate a Status of Forces Agreement (SOFA) with Maliki and the Iraqi government. The Iraqis leaders wanted us to stay behind closed doors, but in public, they wanted to have sovereignty that the US government would and should not provide. Can you imagine a US citizen facing an Iraqi court? The scenario is playing out again in Afghanistan. At this time, I think the US military’s timeline for making force structure decisions is past. Each month, it becomes more and more certain that everyone is coming home. Add to the giant reduction of all military forces in Europe means there are less contractors needed. The competition will be intense for those that remain. I anticipate more haircuts. I hate to say this, because I enjoyed working in the Middle East, Europe and Africa. I am tired of pay cuts and try to avoid situations where market pressures put downward pressures on income.
The long hours working overseas
When working in Iraq, the schedule was 7 days per week working 12 hour days. In Africa, I worked 6 days per week and 10 or 12 hour days. The gross pay is substantially higher than working stateside, but when you work it out hourly, you will find it is 15% to 20% less than stateside. If you work in Atlanta in IT, you may make gross of $100K or $50 per hour. Overseas, your hourly rate will be $41 or $42, but your gross will be $130K. As I get older, I find the 60 hours a week take a toll. You can’t keep it up year after year for several years. The work overseas is one year contracts, and subsequent years could include pay cuts depending on re-competes.
The first $90K of income is tax free!
This was a lesson learned from my first deployment. I worked in Iraq and the contract I worked on had a change of leadership. We had a Chief-of-Party that had a disagreement with the team. All five team members were dismissed or sent home. I was 60 days short of the 330 day requirement to get the tax benefit. To make things worse, I was so confident that I was a hard worker and good employee, I did not withhold the taxes. When I was put another contract by the company in Hawaii, I lost the tax benefit and had to pay the US government the taxes owed. Picture this, I am making less money, the job situation had turned disastrous and I had to pay $15K to government. Try to get $15K together quickly! I now always do the full withholding and get taxes back at the end of the year instead of take the risk. You don’t know what will happen with your job. The company may go bankrupt, the company may change leadership, there may be legal problems in the country completely unrelated to your job performance and you may return to the US early. If you are only 60 days short, you may want to take a 2 month vacation, but you have to weigh that you will have no income for those 60 days. It get really complicated quickly. I have talked to several employers that go beyond mentioning it as a perk and including it in salary negotiations. I have also heard of people pro-rating the benefit if they do not make the 330 days. I am not a tax professional, but I am confident you do not pass the “physical presence” rule until you reach 330 days. The pro-rating for partial years is for calculating thee benefit after you have completed the requirement for the benefit. I have had interviewers give me another interpretation and I am sure you can find a tax preparer willing to file it that way for you, but it is wrong and if you are audited, you will be in trouble. There is a saying, “Don’t mess with the IRS!”
Vacations
An important consideration in your overseas job is vacation. You will be transiting in and out of the area and logistics can get complicated quickly. Flying to and from Africa can take 2 days, but might extend to 3 or 4 days with missed connections. There may be waiting for visas, flight cancellations, space available requirements when flying military air. When flying to Iraq, the Kuwait government required contractors to get a visa and wait a couple of days. I am convinced this was a shake down and involved getting additional money. When flying to Africa, connections almost always are missed. There are weather issues or plane maintenance. If you get 2 weeks vacation mid-year through your tour, you will lose 4 days in the air if everything goes well and 5 or 6 days if something goes wrong. I complained on my contract that vacation should start wheels on the ground in CONUS and not wheels up in Africa. My complaints were to no avail. Another important lesson is that you are a taker…. you take what you are given. You are not going to be able to change the contract. Another consideration for vacation is whether they pay for your flight back to the United States for mid-year vacation. The contract I was on did not, it was out of my own pocket. On unaccompanied tours, it is best to take vacations in the region. There is so much to see. If you are in Europe, you probably will not receive reimbursement for flights back to the United for vacation.
Health Care
I have a really good health care plan by my employer. I have taken health care coverage by my employer for granted and working overseas has definitely changed the equation. I worked in Europe and had absolutely no complaints. We received some healthcare through the military and some care was provided on the German economy. My first company overseas was a small company and there insurance premiums were 3x my previous employer. In fact, I think the company got a kickback from the insurance company and was an additional source of revenue for the company. The company hired mostly retired veterans with Tri-care, so healthcare insurance was not a big selling point. I enrolled in COBRA from my previous employer and when that ended, I bought my own insurance. It was costly. With overseas contracting, your company may lose the contract and you will have to buy your own insurance between jobs. You must factor this in your considerations. While no job is secure, I would say that being a long-term employee with a large company in the United States has much more stability than contracting overseas. When I worked in Africa, there was no healthcare system. The command on the base did not treat contractors. I did not get sick all year, and was very fortunate. The company had made arrangements that if someone was sick, they could be flown out quickly. One person while I was there had a pretty bad infection and the management made arrangements to have him flown out. I think the healthcare coverage was pretty good, but I never took advantage of it. On vacation, you do not want to spend your time visiting doctors, dentists and eye doctors. After a couple of years of neglect, I had a lot of dental work to do over three years with my next employer. Just realize that some countries don’t have much of a healthcare system. One last gotcha. Keep your vaccinations and shots up to date. While you have coverage, get all the shots you may need and x-rays. Time between contracts, you may have out-of-pocket expense and a company may deny reimbursement of some costs. On one contract, I was out $3500 in expenses. The Centers for Disease Control and Prevention (CDC) has great list of recommendations for each country. I paid for the vaccinations and would do it all over again. Vaccinations are one of the most effective health protection measures you can take.
Global Mobility Office
Large companies will have a Global Mobility Office to help with overseas assignments. In most cases, they are completely useless. They staffed by recent college graduates from the family of Executives or their buddies and they have never worked overseas for extended periods of time. They fly in for week in nice locations in Germany and Italy. They stay in nice hotels and they come in at 11AM to talk about corporate HR policies and leave no later than 2PM. They can be found partying at the disco till early hours in the morning having a great time. Listening them talk about conditions working in Afghanistan is painful. I have sat on conference calls for hours where the same topics are discussed ad infinitum. They rarely solve problems and they are rarely experts. They usually “bill the contract” and are a profit center. The responsibility of the GMO is to protect the interests of the company. They have no regard for your well-being. I am sorry I have little kind to say from my experience.
Everything Costs More
Remember, wherever you go, it costs more. When you work in Africa, most people live on less than a dollar a day. When you go to the grocery store, everything is double the price than back in Atlanta. Remember, the locals buy in local markets and the foods are produced according to local customs. There is no FDA inspections, no pesticides, and the fertilizer is different. You can buy locally produced food or stick to the grocery store with everything brought in from Europe. The cost is much more. Expect wherever you go, it will cost more.
Relocation Expenses (Moving)
Relocation and moving expenses can quickly become large sums of money. If you are flying to an assignment overseas, and they provide transportation and housing, you might be out just a couple thousand dollars. If you move your household goods and a vehicle, it can be $16K to $22K. This is a major commitment. If you leave the contract, you will have to pay back your employer for the moving expenses. If the company lets go of you, you may be off the hook. I find this one of the many perverse incentives of working overseas and there are many. The moving expenses do not cover insurance coverage for the vehicle. The vehicle is usually backed with household goods in a container. I always bought insurance, even on my own dime. I just picture the container falling off the boat. Another unexpected and uncovered cost is if your container is pulled out for customs inspection. There will be cost and it will not be covered in the moving expense. They will charge for storage of the container and re-booking on the next ship. I think the person who experienced this issue was out $4K.
You may get an allowance of a $2000 to buy a washing machine and other small appliances. Overseas, there is different power. In Germany, it was 220V. Your appliances from America will not work there. There are rigid restrictions on what you can buy and you should take advantage of the full amount. Any money that is not spent, is pocketed by the company. There were some strange restrictions on what you could buy and items obviously useful were excluded.
When the contract ends, you will be given a choice to return to the United States under your agreement with the company you started with. If you join the new contractor, you will be asked to sign a new obligation starting all over again. The commitments are about 3 years.
When not moving household goods, I will send trunks of stuff for weeks before my departure. It takes about 3-4 weeks for a trunk to get there through the US post office. If you are working as a contractor for DoD, it will have an APO address. This will be at your own expense, but you can deduct it from your taxes. I send about a dozen trunks and then travel very light. Travelling with all your stuff becomes very inconvenient and problematic.
Interviewing
If you decide that you want to pursue an opportunity for working overseas, the first step is to make sure you have a US passport and it is not about to expire. I have interviewed many candidates that don’t have a US passport and this is an indication of seriousness and preparedness. An international assignment is not an on-the-job (OTJ) training opportunity. You should already be skilled in the job you are applying for. Understand time differences. When scheduling interviews, agree on time zone and do a simple calculation. For Europe and Africa, schedule your interview in the morning (their evening). Do not assume with time zones. I like to schedule my interviews on weekends. Since they are working Saturday, this is usually a good time. Always ask the contract’s end date. Everyone will claim they will win the re-compete, but be aware of the risk. If you don’t have a job, a job with risk is better than no job. Working overseas, I have not found much emphasis on career path. Pay particular attention to your situation. The consequence of a poor job decision may involve thousands, yes thousands of dollars of expenses. Companies will come after you for flights and moving expenses if you don’t complete your side of the contract. These contracts are very much written in their favor and not yours. Some of the conditions in the contract are imposed by the US government and cannot be changed. The US State Department has tables for cost of living allowances (COLA), and they determine if a country is dangerous which determines some allowances, like danger and hazard pay. There are also requirements for Life Insurance required under the Defense Based Act (DBA). The large companies will self-insure and the smaller companies will have to buy it from a reputable insurance company. These will likely be more complicated than a domestic assignment.
Most Overseas Contractors are Divorced
If you get an assignment in Germany, you can bring your family with you. It is a great experience and can’t be beaten. You can spend two or three years racing across Europe seeing Paris, Berlin, Vienna, Venice, Rome to name just a few cities to visit. Multiple unaccompanied tours is going to put a stress and the family and in most cases will lead to divorce. Be aware of the consequences and the toll it takes on your family.
Final thoughts
If an overseas assignment sounds complicated, it is because it is complicated. This is not something to think through before you decide to go overseas. When negotiating, the company will stick to the contract. A different interpretation for one person from another quickly leads to chaos. I will find out if I am treated differently from another contractor and I will be in the Program Office advocating for myself and so will every other contractor. A lot of the contract will be terms that are non-negotiable. No matter how crazy the reasoning behind a decision, it was made because something happened. In the end, you want to do business with people you can shake hands with and be confident everyone sticks to the spirit of the deal. It is impossible to think through all the scenarios and write in the contract every contingency. In the case of working overseas, the risk is assumed by the contractor and not the company.