CEO at Topia, the leader in Global Talent Mobility.
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The year 2020 will no doubt be remembered as one of the toughest years ever for CHROs and anyone who works in the talent space. The sudden shift to remote work, economic decline, hiring and engagement challenges have many of us looking forward to a fresh — and more optimistic — start to the new year.
Things are looking up from an HR perspective. We've got a handle on remote work (or at least we're settling into a routine), pockets of the economy have stabilized and we're adapting our employee recruiting and retention strategies. But we're not out of the woods yet. As we come to terms with the fact that flexible work is here to stay, we'll be facing a new set of hurdles. Fortunately, we also have some proven strategies to overcome them.
Hidden Remote Work: The Flip Side Of Freedom
As we've become more comfortable working remotely and navigating life in a Covid-19 world, employees have started to venture out. Instead of sequestering at home, they're taking work on the road, whether it is for extended time with the family or just a warmer climate.
While the freedom to work anywhere is liberating for employees — a new study shows as many as 23 million Americans will take it as an opportunity to permanently relocate — it's also loaded with risk for the employer. If workers don't inform the company of their physical whereabouts, this "hidden" remote work raises a host of tax, payroll, legal and even immigration issues.
For example, if you're headquartered in the U.K. and an employee goes off to work in France, they not only risk owing social security contributions to the French government, but you may even have trouble firing them if warranted. If they stay beyond a certain timeframe, they could be in violation of immigration laws and can accidentally create a permanent establishment in France. Trust me, your CFO won't take kindly to that.
Governments around the world were very forgiving in 2020, sympathetic to the circumstances, but most are now signaling that in 2021 things will be different: Companies must follow the law or face substantial penalties.
Conversely, knowing where employees aren't can be just as important as knowing where they are. If employees who once worked in New York and San Francisco (where certain taxes are assessed based on employee headcount within their jurisdiction) are now working elsewhere, you could be substantially overpaying in taxes.
In many cases, employees are unaware of the repercussions of not keeping their employer informed of their work location. Most think, "Why should they care, as long as my work gets done?" Certainly, communicating the risks is important, but relying on employees to self-report is still risky and unreliable.
Instead, deploying technology that automatically tracks employee location in real time (registration required) is the most efficient, accurate and reliable way to avoid the risks of hidden remote work. (Full disclosure: My company is one supplier of such technology.) Implementing a solution that gathers macro location data (municipality, state or country, never a specific street address) on a global scale with audit-ready reporting can protect both you and your employees from compliance and tax risk, while potentially saving you enough money for the solution to pay for itself.
New Snags In Business Travel
As remote work blurs the line between temporary and long-term travel, expect jurisdictions to also clamp down on travel compliance. Meaning, companies must be able to track employee travel and adjust payroll withholding across multiple jurisdictions. Otherwise, they could face substantial compliance risk.
Eventually, as a vaccine becomes available, companies must be prepared to handle an explosion in travel. Whether it's for a traditional sales call, an in-person industry conference (remember those?) or a team collaboration meetup, all signs point to a surge in travel once it's safe and the time is right. CHROs need to manage compliance and also handle the potential increased volume in a way that helps the company avoid fines and penalties.
Satisfying Employee Demands
Now that we can truly work anywhere, CHROs should expect employees to increasingly demand flexible work options — whether it's three days per week in the office, fully remote across the country, closer to family or even requesting to extend vacations and work a few weeks from the beach. Because of the pandemic, most companies have been dealing with remote work and flexible requests on an ad hoc basis: When Joe wanted to move closer to his aging parents to help them out during lockdown, he simply asked the HR manager who approved the request at her discretion.
Now, with hybrid models open to all employees, there likely won't be the luxury of a reactive, ad hoc approach. Not only will the volume of those requests increase taxing HR staff, but as a company, you'll also need to decide exactly what's the best strategy for your business: Do you want people mostly in the office or is fully remote work OK? And how does that differ by team or region?
Addressing this situation requires a two-pronged approach. First, you'll need to establish policies and procedures to dictate how flexible work fits into the business strategy, how employees make such requests and what the criteria are for approval.
Next, you'll want to secure the right technology to manage all of these concerns. Implementing a system through which requests can be submitted and cleared against company policies and location-based requirements (the legal, tax and other implications discussed above) can give employees the flexibility they want with the assurance and structure that protects the organization.
By tackling these challenges with a proactive strategy and robust technology, CHROs can mitigate these hurdles in 2021 — and even turn them into strategic advantages. Now is the time for companies to adopt the level of flexibility that satisfies their strategy and their employees, while taking advantage of global work agility with the assurance of compliance.
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