Picture this: your employees working remotely from differing locations around the world, experiencing an improved work life balance, and contributing their best to your organisation’s success. Remote work, including workations, offers immense benefits, such as widening the talent pool and inspiring creativity through travel. However, the increasing demand for international remote work comes with complex challenges that HR and Global Mobility departments must navigate – from legal and tax considerations to immigration and other compliance risks.
Whatever your feelings about international remote work and ‘workations’, it’s almost certain you’ve felt their impact. Demand for remote work and workations is soaring. Research shows more than half of employees either plan to, or have already taken, a workation1 with or without their employer’s knowledge. Another recent report states that only 20% of LinkedIn job adverts offer remote work, but these attract 50% of all applications2.
The Dilemma HR Directors Face
I know from my own conversations that HR directors are being inundated with requests, all of which have to be considered on an individual basis, often without specific policies to guide decision-making. This makes it incredibly difficult to justify granting or refusing a workation request resulting in many organisations implementing blanket bans and losing out on talent.
Nonetheless, this is understandable give that the risks of non-compliance when granting a workation request can be incredibly high, spanning across legal, tax and immigration. If a company has workers operating remotely from a foreign country for an extended period they may face double taxation issues as well as employment law and duty of care considerations – even if they don’t have a physical office in that location. This can then inadvertently result in the creation of a permanent establishment resulting in ramifications on the corporate level, particularly in relation to tax.
How are HR Directors tackling this today?
So what’s the answer? Today many HR and talent leads and global mobility managers are following one of three pathways.
In case one, they are approving as many requests as possible as quickly as possible, arguing this is good for employee experience, but paying no heed to the potential compliance risks for tax, employment laws and immigration around working abroad.
The second approach is a ‘computer says no’ denial of every request, with no clear justification – upsetting the employee, if not the applecart.
Lastly, and increasingly, HR departments try to facilitate requests on a case by case basis weighing up the compliance risks. This typically means employing multiple, siloed advisors on tax, immigration and legal, often on large hourly rates. It’s a costly way to play, and a risky one given the fast-moving nature of regulatory change. In fact, Airbnb has a 30+ in house team within HR to grant such requests, as well as working with external advisers. Plus, it often takes days if not weeks to generate an individual compliance report, creating uncertainty in the mind of the employee.
To add to the confusion, a one-size-fits-all approach is impossible due to the diverse nature of remote work requests. Individual considerations such as nationality, job role, seniority, salary, and location variations demand bespoke solutions. Expecting HR teams to possess up-to-date knowledge of regulations for 170 countries is impractical, and relying solely on busy legal departments for research is not viable either. Yet as workation requests grow – and they will continue to grow in popularity – it’s also clear that the costs and complications incurred per request is unsustainable.
The Need for Technology and Expertise
Fortunately, there is an answer which lies in technology. I believe that artificial intelligence (AI) — coupled with human expertise — can be used to create a simple, real-time and instantaneous way to assess, approve and process international working requests and associated paperwork. Why shouldn’t a computer be able to stay on top of taxation rates, and visa changes, and then instantly generate a country and employee-specific report on compliance? Surely that would be a more cost-and-time-effective, and a less emotive, way to assess a workation request?
The future of work lies in embracing flexibility. Forward-thinking employers who provide flexibility in hours, roles, and locations will attract and retain top talent, creating a vibrant and energised workforce. Simplifying the processes around remote work is essential to maintain compliance while empowering your staff to embark on transformative workations.
1 https://uk.babbel.com/europes-best-workation-destinations-revealed
