Hello there.
I am currently living in Germany and work for the same company since 10 years. It is a US Consulting Company. I have moved up the career ladder and currently am at a Principal level.
I recently have identified that I would like to work abroad and in the end decided that it should be Japan. I like the culture, I learn the language and I know some nice colleagues from Japan. Therefore I have asked for a transfer, which currently is being discussed.
Before I get an actual offer, I was of course reading a little bit in this subreddit. Which made me a bit concerned about big pay cut. It is clear to me that in terms of salary the ranking is as following: Japan < EU < US. The general weak exchange course of the yen is fine and I am accepting to lose global buying power. However in terms of the actual salary, I want to be able to have the same living standard as in Germany.
If I would convert my current salary to yen it would get me to 14 million yen without bonuses. That seems to be quite high for Japanese salaries. Should I expect a bigger cut, maybe I will end up with 10 million yen? Just want to be mentally prepared.
Somehow it feels irrational and a little bit wrong, but even with a pay cut I am still intrigued by the idea to move.
4 comments
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**Should I expect a big pay cut?**
Hello there.
I am currently living in Germany and work for the same company since 10 years. It is a US Consulting Company. I have moved up the career ladder and currently am at a Principal level.
I recently have identified that I would like to work abroad and in the end decided that it should be Japan. I like the culture, I learn the language and I know some nice colleagues from Japan. Therefore I have asked for a transfer, which currently is being discussed.
Before I get an actual offer, I was of course reading a little bit in this subreddit. Which made me a bit concerned about big pay cut. It is clear to me that in terms of salary the ranking is as following: Japan < EU < US. The general weak exchange course of the yen is fine and I am accepting to lose global buying power. However in terms of the actual salary, I want to be able to have the same living standard as in Germany.
If I would convert my current salary to yen it would get me to 14 million yen without bonuses. That seems to be quite high for Japanese salaries. Should I expect a bigger cut, maybe I will end up with 10 million yen? Just want to be mentally prepared.
Somehow it feels irrational and a little bit wrong, but even with a pay cut I am still intrigued by the idea to move.
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If you’re worried about salary, do some research on how quickly the Japanese economy is shrinking. Germany just replaced Japan for 3rd largest gdp and the yen continues devalue. That won’t change anytime soon.
I don’t think anyone can answer that question, unless they have transferred with your company. Your salary would depend on company policy as to how they treat transferees — you may get an expat package, or your pay may be adjusted to local equivalences. And all of that may be negotiable, or it may be a policy set in stone.
Another thing to consider is whether your pay will be figured in euro (so it will fluctuate in yen based on exchange rate) or in yen (in which case it will be constant). As you’re a principal, you may be able to negotiate with your company depending on which you might think will favor you over time.
Other things to think about would be to what extent they support your move: Moving allowance, help finding an apartment, covering up-front move-in fees, etc. And if you have a family, will they support spousal and dependent moving costs, school tuition coverage, and so on.
Can you reach out to others who have transferred within your company, even if they didn’t go to Japan, to get an idea of how the company managed things?
Edited for clarity.
The discussion of expat packages has come up before on this subreddit so you can do some research and find those for some general information.
What I get the sense you’re really asking is “how much money do I need to get in Japan to let me maintain my social position similar to the 90-100k EUR I am currently getting?” The answer to that is not as clear cut, though. The reason is because of how skewed salary and career progression here is in Japan, especially when compared to domestic employees, and especially across certain industries.
If you were to tell someone on the street here in Japan (and especially on a street not located in Tokyo) that you made 10 million, a majority would be impressed, or downright flabbergasted. Even though, relatively speaking, we know 10 million yen is hardly anything when converted to USD/EUR. When I say hardly anything, again, I mean in the grand scheme in these types of industries. Most European people will surely think a 100k EUR salary is nice, but you and I know 100k EUR does not equate to giant homes, endless cars, and private jets. We know well that those above you at any of MBB are making much, much more than that.
With that said, yes, the answer is that most likely around 10-12 mil is the number you’re looking for to maintain the current stature you have in the EU here in Japan. Howver, you are likely worth much more than that, as I am sure you realize, so it’s up to you if that is something you want to swallow or not. While not impossible, it usually is a bit of a battle to break through the 15 mil wall for expats. To share an anecdotal and arbitrary baseline for you from about 5 years ago – at Big4 accounting (I’ll include law in here) and Big3 consulting, only about myself and dozen friends/acquaintances/business relationships who were NOT partner level were at or above 20 million. Of course, the economy and landscape is totally different now in just 5 years.