As the global workforce evolves, organizational strategies for managing expatriate compensation must also evolve.

Consider the scenario of hiring for an essential role in Singapore and finding the perfect candidate who is eager for the international opportunity. Everyone is excited until compensation becomes a barrier. The candidate declines, citing financial infeasibility, or senior leadership balks at the high cost. This real-life scenario underscores the critical need for effective expatriate compensation strategies.

For global talent leaders, these scenarios are not mere imagination, but a reality they face all too frequently. The challenges of compensating international assignments and transfers are a cornerstone issue in assuring a globally mobile workforce.

Today, following trends primarily from Europe, multinationals, including those headquartered in the U.S., are increasingly using alternate compensation strategies for their globally mobile talent to overcome these types of issues.

This article aims to delve into why they are doing so, what those approaches are, and the important considerations for using these alternates, all of which are crucial for your role as a global talent leader

The Balance Sheet Approach, Why It Worked (and Why It’s Fading)

For more than half a century, the balance sheet was the gold standard for expat pay. It was elegant in concept: keep employees financially “whole” when they move abroad, no better off and no worse off than if they’d stayed home.

On paper, it made perfect sense. Developed in the postwar era by compensation pioneers like AIRINC and ORC (now Mercer), the balance sheet relied on meticulous financial modeling to compare home and host locations. Housing, goods and services, transportation, taxes, everything was accounted for. The goal was fairness and predictability.

And for a long time, it worked. It helped build trust between employees and employers at a time when global assignments felt like uncharted territory. The balance sheet reassured families that a move overseas wouldn’t mean an uncertain financial future.

But here’s the problem: what worked in 1970 doesn’t always work in 2025.

The balance sheet has become one of the most complex, expensive, and administratively heavy processes in global mobility. It requires endless data subscriptions, tax assistance, split payrolls, and constant currency updates. Even when it’s done perfectly, it’s rarely perceived as fair, which defeats the entire purpose

I remember visiting a company years ago where a group of Australian engineers were convinced their allowances were far too low. We reviewed their reports, line by line, only to discover they’d been paid double by mistake. And still, they weren’t happy. It’s a perfect example of how even the most precise models can’t always align with human perception.

At its best, the balance sheet is structured, logical, and protective. At its worst, it’s a bureaucratic migraine that sometimes creates as many inequities as it solves.

It’s no wonder companies, especially in Europe, began asking the question that would reshape global mobility for decades: What if there’s a better way?