Meanwhile, for those first few expats who had special deals, it s probably best to put them in transition programs, Rehbock says. Many companies will grandfather these people. Later, as a company develops global expertise, it may consider other options. To do that, the balance-sheet approach looks at the expat s costs for income taxes, housing, and goods and services. It then considers the costs of replicating those expenditures in an assignment location.
Most companies are fairly generous about where expatriates can live.
The disadvantages of the balance-sheet approach include cost and the resistance by expatriates who would be paid lower in their home countries to repatriate, according to Reynolds. And not everyone agrees with its philosophy. And it provides a base for pensions and other home-country benefits. It facilitates repatriation and reintegration into home-country salary structures at the completion of overseas assignments. On the other hand, it is more complex to administer and it discriminates by nationality.