In a post from January 2021, we asked, “What is the future of remote work really?” and we shared info from our friends at AIRINC who had produced a benchmark report entitled, The Future of Remote Work and COVID-19’s Impact on Mobility. The report shared how 86% of respondents anticipated that remote-work requests would increase in 2021, while only 34% of companies report currently having a remote-work policy. A lot has happened since then and companies have had to address employee requests to work from different locations, many of which are in different countries creating some very unique, interesting and challenging compliancy issues that need to be considered.
Entering Q4 of 2023, global mobility programs are more and more being called to support remote work. Mobility teams are involved with reviewing specific situations, creating policies, and managing individual requests for international remote work. One of Plus’s clients reported having nearly 200 self-initiated requests from employees for global remote work in Q1 alone. Navigating each country’s local employment laws, work permits and visas, and payroll/tax regulations (including social security contributions) is complicated, and can create tax risks for companies and employees. Non-compliance can lead to costly penalties. Health, safety, insurance, and data protection have to be considered too! You can see why companies are leaning into global mobility expertise for supporting all of this!
Well, AIRINC has a new benchmark survey out, titled “International Remote Work“, that reviews how companies are responding when employees perform their existing job duties from a different country than where the physical worksite is located. They share that while the majority of companies allow for international remote work (52%), only 11% actually see it as something to make the company stand out.
Looking at Philosophy and Approach:
At 35%, the largest percentage of respondents handle remote work requests on a case-by-case basis, while 32% have a formal policy and process in place. And nearly 20% simply do not allow it all.
The majority of companies have global mobility as the responsible function at 56%.
Many companies (44%) are tracking the requests, with another 28% using a technology to do so. However, nearly 30% are not tracking at all.
It’s also interesting to see that while many companies are allowing international remote work, only 11% are promoting it and using it as a differentiator:
Only one out of ten companies felt the their organization was really using international remote work to help the company attract and retain talent. Another three in ten somewhat agreed the company was tapping it to support talent attraction and retention.
Looking at Guidelines and Compliance:
More companies (34%) only allow remote work for a certain number of cumulative days, with another 29% varying what they allow by location on handling it in a case-by-case basis.
Of those that allow for a specific amount of days cumulative within a 12 month period, 28% allow 20 days, 26% allow 30 days, and 20% allow for 10 days.
For locations where the company has no entity, nearly 40% handle this on a case-by-case basis, nearly 30% allow it, and nearly the same do not allow it at all.
Payroll challenges are then an issue that stops things or where a work around has to be considered. For those that get the option, nearly 70% maintain their home salary, 10% get a new “host” country based salary, while almost 20% get figured out one case at a time.
When it comes to tax and immigration, the employee is the one responsible for more of companies with 44% being responsible for paying any additional income tax costs that get triggered and 42% having to be responsible for arranging and paying for all immigrations costs.
Ranging from short-duration “work-ations” to permanent remote work arrangements, there is a wide variety of ways that employees can work from anywhere. Although the majority of companies allow international remote work, only 11% actively promote it as an employee differentiator. Most organizations (over 70%) that endorse remote work have a formal policy governing it. For those that permit but don’t promote it, there’s a general sentiment that if remote work is occurring– even if it’s not actively encouraged – there should at least be procedures or guidelines in place instead of being handled on a case-by-case basis.