The Money Curse

You know, it didn't seem like we spent a lot of money in Argentina, but apparently I was the only thing keeping their economy going. In the picture, the blue arrow points to my departure date. Since leaving the exchange rate has gone from ~20 pesos to the US dollar, to at-time-of-writing 39, largely due to devaluation of their currency (rather than the dollar increasing in value). In retrospect, we did inject a lot of money into the local economy in the form of empanada and medialuna purchases...

This is actually just part of a long chain of me getting "screwed over" when it comes to money in this job. (I use "screwed over" loosely, because realistically I am paid exceedingly well.) When I went to India, the hardship differential pay decreased from 20% to 15% about 3 months before I arrived. It increased back to 20% the week I left. No worries, I was arriving in Buenos Aires with a hefty 42% Cost of Living Adjustment (COLA)... which dropped to 30% the week I arrived. Prices went up steadily for 2 years, with a incomparably small change in exchange rate... just waiting for me to leave, and now BOOM! All my old coworkers are living the exchange high-life. 

Comically, when I started writing this Post, I was going to include coming to Iceland... where (despite being one of the most expensive places in the world) the COLA is a ridiculously low (35% when I arrived, just barely more than Argentina!) Since we arrived, it's actually decreased three times and is now down to 20%... however, that's because (finally) the exchange rate is helping us out! When I bid on Iceland, the exchange rate was 108 ISK per 1 USD. When we arrived it was down to 103. However, in the last month the krona has tanked, leaving us with a current 124 ISK per 1 USD. That's an effective 20% increase in our spending power since arriving, hard to argue with that! Maybe the curse is broken! 

Fair Share and Bidding Privileges

Bidding Bidding Bidding. It has begun. Possibly the worst part of the Foreign Service (or the best?) is the process of determining your next Post. It's not unlike my former life, as a contractor, where we continually interviewed for positions for new contracts, as our old ones ended.

This year marks the beginning of the condensed bidding cycle (more on that later), but today is our first 'surprise' for the season. Many factors play in to determining which positions you are eligible to bid on. Two of those factors changed today and I'll break down each of them:

Fair Share Bidding is a requirement that you serve in a hardship positions every 7(ish) years. The general idea is to keep someone from spending 20 years doing 7 tours in London, Paris, Rome, Tokyo, etc. This year the definition of a hardship to fulfill this requirement changed from 15% to 20%. This means that if you are bidding this year and have not served in a 20% hardship position in the last 7 years, you are required to either bid on exclusively domestic assignments or include at least 3 at-grade and in-specialty positions with 20% or higher differential, in at least two geographic regions. Fair share bidders are required to accept any offered handshake (or find another hardship handshake) within two weeks of it being offered. If, by some weird turn of fate, they are continually not offered a handshake for 5 months... then they can accept any position offered. This increase of just 5% therefore drastically changes the 'popularity' of certain posts in the bidding cycle. A 15% post is now substantially less appealing, because it doesn't meet this requirement (and I imagine we'll see a proportional drop in their overall bids.)

Bidding privileges allow a person to bid one grade higher than their current grade if they're bidding on, or currently serving in, a hardship. However, the definition of a hardship for this changed also, but instead of increasing 5%, it went from 15% to 30%! This is a gigantic increase and drastically reduces the viability of stretching into a higher position (which had become quite common among people looking to get promoted early). This change will also effectively hinder bidding at 15% posts, with a possible benefit to 30+% posts. It will be interesting to see how this pans out. Bidding privileges are also granted for employees receiving a Meritorious Step Increase award or if the post has been designated as historically hard to staff.

Keep in mind, much like going to a non-fair-share-post as a fair share bidder, it is possible to go just about anywhere, but only at the tail end of the bidding season. Initial handshakes go out ~early November, but in March the restrictions drastically relax for the poor posts and bidders that have been left out in the cold.

It's going to be an interesting next few months.

Hardship Differential

As of today, the hardship differential for Consulate General Chennai has increased from 15% to 20%. This percent represents several things, including extra (incentive) pay, second-tour bidding 'clout,' and student loan repayment eligibility. Since it went to 15% right before I arrived and is changing back to 20% right as I leave, I have to assume this is just an indication of how much I improved morale. Sorry to leave you all in the lurch, so to speak. As a parting gift, I give you 5% more money!

If I sound a little bitter... it's probably because I am. Chennai has only improved in the last two years, which means the people that arrived the year I did spent nearly our entire tour under represented by our hardship differential. Of course, there are worse things. For example, two of the other posts on my original bid list have had terrorist bombings in the last two years. I think I'd rather miss out on a little money... than hear bombs exploding, given the choice.

Anyway, long story short. Congrats to my Chennai colleagues.

Great (Pay) Expectations

When I joined the Foreign Service, I expected to take a fairly substantial pay cut. I was making 6 figures at my last job and figured I would start as a low FS-5. That being said, I've been (pleasantly) surprised by my actual compensation. In my initial guesses, before getting hired, I really didn't understand how overseas pay was calculated. Here's a breakdown of my current pay modifiers:

All Foreign Service Officers, while overseas, get "Overseas Comparability Pay" (OCP) of 16.14%. In Chennai, I receive 15% "Hardship Differential." In addition, I get a 5-10% "Cost of Living Adjustment" (based on some wonky math, so it ends up being 4-8%).

This changes my original belief of making $43,378-$63,702 to $60,369-$91,881. That's a pretty substantial difference. In addition, I was also fortunate to qualify for a much higher step than I'd expected. Throw in free housing and utilities,  drastically lower expenses ($5/month for a cell phone plan(!), $20/month for high speed internet, et cetera) and things are much better than I'd expected.

Other's mileage may differ, certainly many countries have lower hardship differentials (or none) and are much more expensive than the US (Hi, London!). That being said, we've actually been saving more in Chennai than we ever did living in the DC/Baltimore corridor, despite the lower gross pay. I've heard more senior officers say that you save money while overseas to be able to afford going back to DC (where you don't get free housing, differential, or COLA). I could definitely believe that.

Of course there are a lot of "quality of life" differences as well, both good and bad, but I'll save those, and how my benefits have changed, for another post. (Hopefully? Soon).

Note: Why oh why did they discontinue these AMAZING one rupee coins? Eeeeeeeeeey!

Ranking Your Bid List

Given a list of 23 cities, how do you decide where to live for the next 2 years? This is obviously not a problem for most people, but it's on the mind of all the IMS hires in my orientation class. I can't speak for them, but I can certainly speak for me!

Our first draft bid list was straight from the gut. We literally just listed our top 10 and called it a day. After that, we used some of my wife's fancy decision analysis ninja skills to determine our priorities and reorder our list into our second draft. We further researched each of our top 10 choices at the Overseas Briefing Center (OBC) and finalized our rankings. Our final list has a couple 'strategic' rankings, but is mostly just an ordered list of places we would like to visit for an extended period.

When making our decision, we considered:
1) Housing distances from work and town.
2) Weather
3) Opportunities for regional travel and sightseeing
4) Post size
5) Differential Pay
6) Strategery.

Fortunately, our son is not in school, so we didn't have to factor in the local schools (yet). My wife and I are pretty tired of living in the suburbs and having to drive literally everywhere, so we're really hoping to spend some time living in a walking friendly area. Weather plays a part in that also, since it doesn't matter how close things are when it's negative 70 outside. As avid travelers, we fully expect to use our new locale as a starting point for quite a few trips (hey, that's what vacation time is for!).

Our only concession to strategic bidding was to group a bunch of the 'hot ticket' posts around the 7-10 spots. This forms a 'wall' of posts we're unlikely to get (since they'll probably top other people's lists), but makes it less likely we'd get pushed to even lower choices on our list. You know, we hope. Of course we might get any one of them, and that'd be fine too; I'm not totally opposed to a cushy first post.

There are three main pay modifiers for posts in the Foreign Service: Cost of Living Adjustment (COLA), Hardship Differential, and Danger Pay. Hardship Differential has double duty for our first post, according to my Career Development Officer (CDO). As extra incentive for more adventuresome first posts, she gives preference during the second post bidding, based on first post Differential. She called this equity (it's actually the sum of the Differential and Danger, but only one of the posts on our list has Danger). So whoever has the highest 'equity' from their first post, will get their first choice from the bid list for their second post. This will continue until everyone has a post. Although I do not want to pick my first post based on equity, it did give me some incentive to slightly lower my bid on the posts with zero Differential. Let's face it, who wants to get last pick next year?

Jeff, over at Ramble On, created a Google doc for our class to plug in our tentative bid lists to 'compare notes.' The trend data from that has been outstanding. At time of writing, 14 of us have plugged in our list, and only one of the posts is not in somebody's top 4 (and it's someone's 8th). Additionally, all but 4 of the posts are in somebody's bottom 4. That's some crazy diversity!