Remote work has become an essential aspect of our working culture. The ability to work from anywhere has revolutionized the way we work, breaking down geographical barriers and changing the traditional office-based model.
At the beginning of the pandemic, companies had to swiftly adapt to support their employees and sustain business operations. As restrictions eased, workers began to realize the value of being able to work from anywhere, which has resulted in a growing demand for workplace flexibility.
While companies are still figuring out the best approach that suits their workforce and business requirements, many have embraced more flexible work models and are reaping the benefits of having a global workforce.
This article aims to gain insights into where companies stand today in their remote work journey and validate the findings from "Latest Developments in Remote Work Trends".
Remote working policies continue to increase
According to recent surveys, there has been a significant increase in the number of companies adopting remote work policies over the past two years. Almost half of the respondents (48 percent) have already introduced a policy or standard, while approximately a quarter (27 percent) are planning to do so.
Some of the respondents (11 percent) allow remote work but don't have a formal policy or standard in place. Only a few (7 percent) reported that they have no plans to introduce remote work.
The data indicates that in the past three years, nearly 90 percent of surveyed companies have adopted flexible working arrangements. There is also a clear trend towards establishing standards and policies to effectively manage the remote workforce.
Remote work is talent-driven
The primary reason for implementing remote work arrangements is the demand from employees for workplace flexibility, which accounts for 73 percent of the reasons.
Although COVID-19-related reasons have become less influential, talent-related drivers, such as improving employer attractiveness (53 percent), bridging talent shortages (38 percent), and gaining better access to skills (27 percent), have increased in importance. Only a few respondents cited cost savings (14 percent) or reduced carbon emissions (3 percent) as the reasons for adopting remote working.
The results indicate that remote working has become primarily driven by the need to attract and retain talent. Remote working is thereby establishing itself as an essential part of the talent strategy, especially in industries that face talent shortages. Organizations that use remote working as part of their talent agenda purposefully communicate workplace flexibility in job postings and advertise it in recruitment publications.
HR and Global Mobility are responsible for international remote work
The management of international remote working programs has evolved over time, with various functions taking responsibility for them. According to recent findings, HR and Global Mobility departments are increasingly responsible for this duty, as compared to our 2022 study.
This shift may be due to the introduction of clear policies and guidelines for international remote working, which have reduced the need for individual tax compliance assessments. However, effective implementation of these policies requires cross-functional support to strike a balance between compliance and talent needs.
When remote work crosses borders, short-term arrangements remain the most common approved type
Many companies allow remote working within their own country (73 percent), but when it comes to cross-border remote working, short-term arrangements are the most common type. Over half of the respondents (52 percent) consider or implement temporary arrangements of up to 90 days per year. Around 20 percent of respondents are considering hiring abroad or facilitating virtual assignments. Longer-term international remote work arrangements of more than 90 days remain the least common.
By focusing on short-term arrangements for cross-border remote working, companies can offer employees greater location flexibility while minimizing compliance risks and administrative efforts. In practice, organizations often introduce policies allowing employees to work for a limited time (usually between 10 and 40 days) from a vacation destination, or while visiting family and friends, subject to certain conditions and requirements.
Meanwhile, long-term and permanent remote work arrangements continue to be enabled on a case-by-case basis due to the administrative complexities and compliance requirements involved.
Compliance-related challenges continue to be the primary concern
A recent study has shown that tax and legal compliance is the biggest challenge for most companies (82%) when implementing remote working. Managing the risks associated with creating a permanent establishment is also a challenge for 65% of companies. In addition, 26% of companies face difficulties with immigration restrictions.
Apart from compliance-related challenges, companies also identified challenges related to implementing and administering a remote work program itself. This includes establishing robust processes and governance (43%), tracking days spent abroad (30%), and ensuring clear communication of policies.
The results of the study indicate that compliance-related challenges remain a major concern for companies that want to introduce cross-border remote working. Although regulators and authorities have made progress in enhancing transparency and facilitating remote working practices, further progress is still needed to gain a unified view of how both local and international authorities approach compliance relating to remote working.
In the meantime, organizations need to continue to develop and enhance their strategies to minimize risk exposure, stay updated on developments, and engage with authorities to support local policy decisions.
Most companies rely on case-by-case assessments to help reduce compliance risks
Many companies use case-by-case assessments to minimize compliance risks. However, with the persistent compliance challenges, it's essential to introduce measures that can effectively manage these risks.
According to a recent survey, 59 percent of respondents rely on case-by-case assessments, while 46 percent have introduced policy limitations to set clear guardrails that at least partially reduce the need for individual assessments. Some companies use specialized tools to track remote work requests (16 percent) or run automated risk assessments (6 percent).
The survey results reveal that most organizations rely on manual processes to manage their remote working programs. Only a few with advanced programs have implemented technology-based or automated solutions. This is not surprising since the level of process automation varies from one organization to another. Each company must evaluate factors such as the number of cases they experience, the degree of program standardization, and the complexity of their processes before deciding on implementing technology.
Moreover, the current IT-landscape and the extent to which technology is already deployed in the organization also play a vital role in adopting a technological solution for remote working. Some organizations leverage existing software or low-code solutions to automate parts of the remote work request process, such as standardized request forms.
However, an increasing number of companies are looking at specifically designed remote work solutions due to the increasing complexity of tracking cross-border travel and remote work together, along with the complexities of remote work management. For example, the need to consider multiple layers of approvals and ensure employee validation post-travel within a single platform.
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