Korean Job Discussion Forums

[DaeSung]

I know this sounds like it should be a post in the Job discussion forum, but most of that relates to Jobs in ESL (I know this is Dave's ESL and all).

So I�ve been worrying about this for a while, my contract ends in January and I need to start negotiating my new contract for next year. I work for one of the larger chaebols (I know that there are others out here that do as well and that�s why I'm asking). When I came here and started working in Korea my package was similar to what I would have been making in the states. The exchange rate was 930 to $1 when I made my contract 3 years ago and the exchange rate didn't really change enough to bother me the last two times I contracted.

Oh, little back ground info, I'm American, I work in accounting, married and have a kid ^^ My wife is Korean and that is one of the main reasons we came to Korea to work (wanted my wife to be close to her family).

Now that the exchange rate is wonky... I can go back to the states and do just about anything and make more than I make here (when you look at dollars to won) and if I get a job in accounting then I would be make significantly more after taxes and all. I'm a bit less than optimistic about the Korean economy, granted the US economy doesn't look great right now.

Anyhow to make a long story short... well not that short I guess, I need to negotiate my new contract and am considering how to bring up the exchange rate, and how it affects me.

I know what HR's argument will be "You work in Korea and we pay you more than the other Koreans, you use money in Korea and you live in Korea so the exchange rate doesn't really matter to you"

So what should my argument be?
I was thinking something alone the lines of "I choose to work in Korea, I have done so in the past because it has been beneficial to me. I came in making similar pay to what I could make working in the US (more saving ability) and that has been good for the last three years. I've been happy with it and you've been happy with my work. However, right now it doesn't make since economically to work in Korea for the current pay. If the company wanted to hire someone with my experience level from the US this year they would have to pay significantly more.

There are some other things I want to throw in but I�m not sure how to go about it yet. They include: student loans (paid in USD), inflation (including the now much higher cost of goods form the states, that I could previously afford and no longer can), and then somewhere in there i should be getting a regular performance raise or whatever you want to call it.

Then I need to come up with my pitch (higher than what they want, so they can knock it down to a level i'm okay with and they feel like they are getting a better deal.)

Any suggestions would be appreciated.

I was thinking things like I want to be paid in USD, I'll take my USD hiring amount (3 years ago what I was offered in USD is now easily higher than what I make in won including raise and bonuses), taking half my pay in USD. Something about the exchange rate increasing by more that 45% or decreasing by 38% what ever way you want to look at it just halving that and saying you can increase my won amount by 20% (of my pay not my other benefits) and then add in my contract that if the exchange rate moves in either direction by more than 10% we need to revaluate contract conditions related to pay...

Yeah so I'm just not sure what method would be best, or should I just tell them screw it I�m done. Pack my stuff up and have them ship it back to the US.

Okay so that was long, if any of you take the time to read it, I know there are other people out here with similar worries. I'd be interested to hear your take on the situation and how you plan on dealing with it. I'll even take the "suck it up, and get on with life" replies. Because shoot, this is Dave�s and I know how it goes here ^^

*wow* that was a long rant/post

[afsjesse]

In short, they'll hand you a pink slip before they give you that much moer money to equate your losses. Sparking isn't it.

[kasain]

I don't know how much you make now, but I guess the won will hit 1500-1800 to 1 US dollar.

The school would most likely let you go and hire a new person for 2.0 or 2.1. Unless of course it is a public school. Those have a system. Even there though they will give you money based on there scale.

If money is your main concern China and Japan are doing well right now. Even Tawain is doing ok. But in Tawain you have to pay for rent and high tax.

I looked up all 3 rates. 2.3M won = about 1500 US dollars, China = 2050 and Tawain = 1950 - 300 for rent.

So there is the math for you

It is not a good time, and most likely won't be a good year to to make won if you are sending it home monthly.

[Straphanger]

[DaeSung]

I totally agree with you on the paper losses. I haven't lost anything until I move back to the states. The problem I have with this is I consider myself to be equally employable in the states, and I plan on going back to the states. So while I understand that as of yet I haven't lost anything, I will be losing money because of opportunity costs. I know I don't have to explain what an opportunity cost is to everyone here so I think you'll agree that when we are looking at it from an economical standpoint the opportunity cost of staying here has increased alot.

I wouldn't be pretentious enough to ask for 1500W to the dollar. Sure if the situation was reversed and I was a Korean employee working in the US and the won went the other way so I could be making alot more in Korea, I don't think the company would make any exceptions for that employee, and they would likely tell them to suck it up or go home. (My company will likely be a little nicer than that)

But this situation is not the same. If I was a US company and needed someone that spoke Korean and English to do a specific job and I brought them over from Korea to work for me in the US and the Korean economy was going crazy and now they had alot more incentive to work back in Korea I would consider working with them on how to deal with their needs.

As for how much I actually made over the last 3 years compared to an American tax rate and such, I do take those into consideration when I'm looking at my "paper" losses. But you have to realize that a company of the size I work for also knows that I don't pay taxes in the US until I hit the tax treaty limit. As such they are going to offer you enough to get you here, while at the same time taking into consideration that you won't be paying taxes on it. Sure 800 was nice (it wasn't at 800 for very long during the last 3 years) and I got here at 930. So in all honesty its been pretty close to that for the last 3 years and as I said I didn't really worry about. But I'm pretty sure if you count all the time it was less than 930 and say I'll give you back all the money I "made" from the exchange rate being less that what I was originally contracted at and the money you'd "make" from the next year at having your contract at 1500 then you would be looking a lot better at the 1500. But that�s just me.

Anyway, so far I got the replies I was expecting ^^

Oh and to the person that didn't read the really really long OP, its okay it was really long and I don't know if I would read it either. I understand if I was an English teacher and posted this that you would be accurate in saying its easier for them to not contract with me and get someone new. However, as I said I'm an accountant, I speak Korean and English, I have a slightly different skill set than an English teacher and honestly there is no way they could get an accountant to come over here for 2.3 right now. That was kind of my point. They couldn't get a non-Korean accountant to come over here for 3 million. Thanks for the advice so far.

[Straphanger]

[Pooty]

Hey Daesung, it's me Pooty - from that other division of your company

I've only gotten as far as the part where you have to renegotiate your contract...will read the rest soon (meetings) but I thought you were perm? Didn't you go through the entire interview process? My contract is up in March - but the way they explained it to me was that there are no salary raises till promotion. Right now I'm a manager (Kwajang - AND at the top of my level pay scale...) so it would be another two years (total 4 yrs) before I would be elegible for a promotion (chajang) and a pay raise. Maybe HQ is different in that regard.



EDIT: Okay, I read your entire post. imho, our company isn't going to go for a pay raise based on the exchange rate. I could be wrong though, and you might want to throw it out there and see if they bite. HOWEVER, since you speak Korean fluently, know this company culture vs. say, Samsung...you know they're prolly not going to go for it...but don't stop trying! Let us know what happens.

I noticed that some of the replies in this thread assume you're working at a school, teaching English. I'll go ahead and point out one more time that you're an accountant, working for a large corporation...one of Korea's biggest. wink wink

[victorology]

I think you have to evaluate a lot more factors. This isn't the best economic time to try and negotiate a raise. If you have something to fall back on, I'd say go for it but if you don't, I think you're taking a big risk. I know a lot of businessmen in Korea right now who are having difficult times. Companies are cutting down on hiring. I've even heard of stories where college grads were offered jobs only to have the offer taken back.

My cousin was in a similar position where he tried to negotiate a pay raise with a top law firm in Korea and they told him to find work elsewhere. He had a skill set he thought would be difficult to replace but the law firm didn't think so.

I think it's perfectly acceptable to think you should get a bump in pay as you gain more experience but I would refrain from asking too much. I don't know your full personal situation so I guess I can't fully judge what the best course would be.

[Straphanger]

[DaeSung]

Hmmm... I disagree that the same amount of won buys you the same amount of stuff it did last year. Just give you a quick example, one that applies to Koreans as well as foreigners. Last year you could by a roll of kimbap for 1,000. The current price of kimbap is 1,500. Not a big deal I know. But when you look at the % increase you are going from (1,500-1,000)/1,000 or a increase of 50%. Similarly ramen, milk, and other food costs have increase considerably in the past year between I think at about 20%. Cost of a burger at burger king (for a bacon double cheese burger set) was 5,600 now 6,600 an increase of (6,600-5,600)/5,600) or about 18%. There are other examples and overall the increase for the year is around 5.5% or so for the average Korean. I'm not sure about utilities as I've noticed they have also increased sharply this year as well.

That�s inflation and I'm not worried about that. I will be asking for a cost of living increase of at least 5.5% (on pay only not total package) before I ask for anything else.

Back to the opportunity costs issue. Let me kinda explain my logic, with out giving away two much information about my salary and all (I have a difficult enough time with Korean people asking me what I make).

Sooo Lets say I consider my self employable in the US so that�s what I'll use for comparison:

Three years ago-
Starting salary for new graduate accountant in WA $45,000 total benefit package worth 55,000 a year. (you have to pay taxes on that right ^^)

So your basic federal tax would have been around 9% (cuz i'm married right) plus some other deductions and all lets say 14%. You still looking at 39,000 a year (or 42 mill won at 930). Now you have other cost of living expenses for health and rent and all that stuff. But your still looking at 39,000 after taxes before other stuff.

Now Korea three years ago with the won was at 930 to the dollar
Starting salary for a new graduate accountant in Seoul (non-Korean) 36 million won + 7.2 in housing 43.2 million won in pay and then you got benefits so your package is now closer to 50 million. that�s about 54,000 usd a year.

So either way its pretty similar and lets say you put away 1 million won a month on this salary. That would be almost thats about 13,000 USD a year in savings. maybe you could have saved $1,000 a month in the states so your up 1 thousand from living in Korea.

Now its 3 years later you make more but the exchange rate is more 1400 to the dollar (i expect it to be at or around this for a while).
So the salary in WA would be about 52,000 for a total of something like 60,000 in your package. Take out takes at a little higher and your still looking at about $44,000 (now your making 61.6 million won a year) a year after taxes and before you pay for other stuff. You can save a little more than $1,000 usd a year so lets say you save 1,300 a month. For the year you could save $15,600.

Lets look at your job in Korea now.
You make 42 million a year in pay plus 12 million in housing for a total of 54 million and pay very little taxes. Your total package is now something like 62 million a year. The problem is your saving power. Lets say you still save a little more than before and your up to saving 1.4 million a month. at the end of the year you have saved 16.8 million won, or about 12,000 USD because of the exchange rate. So your opportunity cost was $3,600 for the year. IF at the end of the year the exchange rate is still bad.

But like you said that�s a paper loss until I want to go back to the US, on until I send money back to the US. I'm not saying the math is perfect or that I�ve included everything I'm just saying that there is an opportunity cost. Like I said before, I don't expect the company to pay me 1500 to the dollar for the next year. I just think that as a business they should understand that there is an opportunity cost to me.

I know that $3,6000 isn't "alot" of money so i'll gladly take donations from anyone willing to spare that much ^^

But you are right that I won't have actually lost any money if the exchange rate is similar to what it was 3 years ago, when I decide to go back to the US.

[DaeSung]

Thanks to the other replies ^^. Yeah I'm not saying that I'm going to demand the company does this for me or I'm leaving. Just wanted to see what other people thought about the situation.

Yes I went throught the interview process but I'm still on a contract, however, by korean labor law if you have worked for the company for more than 2 years on contract your are "legally" a regular employee, or something like that.

I'm pretty sure I know what the company will say, so I'm just trying to come up with some logic beforehand. Honestly I think they will give me a cost of living raise and a little more but it is highly unlikely they will give me 20% (if only cuz they raise my total package by 24% last year, you might say hey thats great, but most of it was in increased housing because i was very unpleased with my housing situation. So they think it was 24% overal because increased housing, and I think they should have given me the level of housing in the first place... so it was only like at 10% or so... anyhow).

I kind of know what I'm going to ask for.

To Pooty - you should still ask ^^ they might give some at least ask for an increase because of inflation.

To victorology - I totally agree this isn't the best economic time to try and negotiate a big raise ^^ Just want the biggest I can get away with.

To Straphanger - Yup, hope to ask, They will probably say no. But as long as I dont' shoot myself in the foot I shouldn't be worse off eh?

[Pooty]

Hey Dman, that law for contractors was just revised and changed. It's 4 years now. My wife read that in the paper about a week ago.

[DaeSung]

Okay so here is the follow up. I talked with HR about the contract and brought up most of the things I originally intended to. They agreed that the exchange rate seemed to be a problem but that they couldn't match it to the current exchange rate or even pay me in USD... So we threw out some numbers back and forth... I asked for them to re-due my contract based on about 1300 to the dollar, less than the exchange rate at the time (1400 = $1). HR said they'd have to think about it and would get back to me. I went home for Christmas and the exchange rate improved so when I got back they said we needed to talk about it again.

So we talked it over and they said they agreed that I needed to get more, but still needed to keep some balance with other employees in the company. (Side note: The average salary increase for employees at our company this year is 3.5%) ((side side note: 3.5% in my opinion is too low considering that inflation of consumer good prices this year is at around 4.9%)).

Anyhow so ended up redoing my contract at about 1100 won = $1 adjusted plus 5% for inflation. (The contract does not specify an exchange rate nor increase for inflation, those are just some of the numbers I used as logic to back up my demands)... I think overall its about a 22% increase in salary (most of the other parts of my benefits stayed the same so the package increase would be a lower percent.)

So, I guess it didn't hurt to ask after all. SOOOO now that it�s all over I can pray for the value of the won to increase (go back down) to closer to 1000. However, I think we will be lucky to get back down to below 1200 next year.