International remote working #5: is it the right fit for your organisation?

In the final blog in our series on international remote working we discuss some of the pros and cons as well as key considerations for companies implementing and managing international remote workers.

Previous blogs have covered the main compliance challenges associated with international remote working, including tax, social security, immigration and labour law, but there are other non-compliance challenges which companies need to consider before they implement virtual assignments or allow employees to work remotely from a different country.

Before we look at those, it is worth noting that compliance is often a moving target. During the height of the Covid-19 pandemic tax authorities took a pragmatic approach by allowing grace periods for individuals who were affected by pandemic enforced travel restrictions. Although travel restrictions have been universally lifted, the challenges now are a lack of clarity around what is and isn’t permissible and inconsistent enforcement.

As mentioned in our previous blog, the Organization for Economic Cooperation and Development (OECD) is expected to release some guidelines soon which will hopefully reassure governments worried about losing jobs and tax income from people choosing to work remotely from other countries and allow business to keep the benefits that this flexible working allows. The over 20 countries which offer specific visas for remote workers with the intention of attracting high-income individuals may need to re-think, but these are primarily aimed at independent contractors (often referred to as digital nomads), rather than company employees.

Advantages

Looking specifically at virtual assignments, one of the main advantages is that there is less disruption to family life compared to a traditional assignment; children can remain in home country education, spouses can continue their home country careers, and the general difficulties of moving countries are avoided entirely. As our surveys  have shown that ‘impact on family’ has consistently been the biggest barrier to employees accepting assignments over the last few years this is clearly a big advantage. They can also be quicker to initiate, as no physical relocation is required and, in most cases, they should be cheaper as there are fewer allowances and benefits required.

When considering international flexible working the benefits to the company are harder to quantify. Mainly they function as an employee attraction and retention tool with many employees wanting flexibility in the physical location they work in. Although the realities are likely to be far from the scenario of working on the beach that some people imagine, there are clearly some upsides to having the option to work in a different country even if this is intermittently.

Challenges

Looking at some of the additional considerations that companies will need to make when assessing international remote working many of these focus on just how effective this type of working is likely to be. This ties in to wider discussions about the effectiveness of working from home.

There have been claims that productivity has risen due to employees working remotely, and certainly some employees have benefitted from the flexibility offered by working from home. On the other hand, some companies have returned to enforcing (or attempting to enforce) office-based working, and some employees have felt that remote working has led to blurringboundaries and increasing expectations that they are always available. The truth probably lies somewhere in between, with some jobs and indeed some people better suited to being in the office full timewhile others are better working from home. We have also seen cultural splits with working from home much more popular in some locations than others.

The reality of someone managing a team while being located separately from them might be something we got used to during the Covid-19 pandemic, but working remotely and internationally brings the additional challenge of working across different time zones and cultural issues which can be much harder to manage remotely. A pragmatic approach would seem to be best but making assessments of each role and individual, and ensuring fairness when doing so, will not be easy.

For virtual assignments in particular, it may be that an assignee is being asked to manage employees they have never met in-person in a country they have never been to, although regular business trips would probably form a part of any virtual assignment. Implementing virtual assignments therefore needs a holistic HR approach to ensure assignment success. This involves a selection process which looks for employees who have the necessary skills to manage employees remotely (which may be different from the technical skills needed for the role), planning of the role itself so that some aspects of employee management can be done locally and clearly defined expectations of roles and responsibilities between home and host offices.

Other considerations

Focusing on virtual assignments there are considerations around whether they will be carried out from the company’s office in the home location or if the employee is expected to work from home. This might seem like a minor issue, but if someone continues working in the same office as they did before the virtual assignment it is easy to imagine a significant blurring of the lines between the employee’s new role and their old one, which apart from being stressful to the employee can have compliance implications. If the employee is expected to work from home, consideration should be given to covering the costs of equipment needed for a suitable home working environment, and this may even be legally mandated.

When it comes to international flexible working, companies need to decide how they will manage their duties as employers which, in reality, can never be completely dispensed onto employees (unless they opt to become contractors and not employees). Given that in theory these employees are physically able to work from anywhere, companies should put in place systems to track where employees areand the number of days they spend in different locations etc., to flag any compliance or employee safety risks.

The costs of running compliance checks (data and time) and approvals, tracking employees, providing remote working technology and home office furniture should not be overlooked when assessing the use of international remote working.

Summary

The above considerations make it clear that while there is clearly a place for both virtual assignments and international flexible working these are not suitable for all companies or all situations.

The challenge now is for companies to formulate flexible and reasonable policies and integrate these into their current suite of policies. Crucially, processes should be put in place for deciding what type of assignment is appropriate in different circumstances to avoid excessive discussion and exceptions. Given the potential volume of requests for international flexible working which companies may have to deal with (the majority likely not on a permanent basis but for one or two weeks here and there), we would also recommend a transparent decision-making process in which the majority of decisions can be made quickly and cost-effectively. As ever, ECA is here to assist with all of your global mobility needs.

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