Denice R. Preston
With workers increasingly seeking flexible working hours, Toptal finance expert John Lee offers a method to help employers weigh the potential risk and benefits of providing the WFA option.
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John Lee is the co-founder of The Work From Anywhere Team. He advises individuals and corporations on dealing with tax complexities and other regulatory issues in a more geo-mobile working environment. John has worked in EMEA, APAC, and the US as a remote worker. He’s a chartered accountant. Has held positions of leadership for multinationals across the globe which include CRH.
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“The shift in the tectonics caused by COVID-19 transformed “work” from a verb to an adjective. From a place where we went to something we do, regardless of location.” Joe Brady Chief Executive Officer – Americas, The Instant Group
Businesses today are subject to massive pressure from prospective and current employees to offer more flexible working hours, and, as a result, there are more alternatives today than there ever were. The abrupt switch to remote working triggered by the COVID-19 epidemic was initially turbulent. The concept of working in the comfort of your home (WFH) has proven more practical than many expected. Industries and companies that had not previously considered adopting such policies are now considering making these policies permanent to draw and keep employees.
We’ve now gotten movercomethe barriers of technology and culture in working at your home office; the next limit is working from anywhere (WFA). This degree of flexibility and freedom was previously thought of as a dream. Now, in the circumstances of the Great Resignation and the opening of borders across the globe, whether or not to give employees the ability to work from any location will be on the agenda for many employers and their employees in 2022.
The biggest obstacles to working from anywhere are tax and legal concerns. Significant risks include tax compliance (for employers and employees) and immigration concerns, as well as local laws regarding employment and security issues with data. Although these issues may appear overwhelming at first, they can be handled. Large companies like Spotify and Revolut have already implemented WFA policies. They don’t always grant employees complete freedom. However, they may be designed to provide employees with a certain degree of space but also impose some strategic restrictions to limit the risk.
I’ve been working throughout EMEA, APAC, and the US and spent much of my time as a global remote worker. My title is chartered accountant, and had senior positions with multinational corporations across the globe, allowing me to travel to over 150 places. I’ve encountered the difficulties of tackling complex taxation issues for individual and corporate tax and employment laws in several regions.
We have discovered working from anywhere is life-changing. My daughter, who is five, has been to four different countries and traveled to over 20 countries. Working from any location has enabled us to become immersed in different cultures and to pursue our interests in ways that would be impossible on brief holidays. This new approach to work has inspired me to create my own business. I advise companies and individuals on developing WFA as an actual reality.
Since WFA is a newly developing policy area that includes rules from various nations, There are more issues than answers. However, employers can make choices despite uncertainty. The easiest and most effective method to analyze the potential risks and benefits of having the benefits and risks of a WFA policy is to look at it through the lens of a complete ROI framework. This kind of analysis will aid you in making an informed decision about whether implementing the WFA policy is the best decision for your business and can help you tailor the policy to your degree of risk-taking.
From “Work From Home” to “Work From Anywhere”
I have mentioned the increasing pressure employers are under from their employees to allow them to work remotely, not only from home but also from various locations. It is possible to be wondering: What does it mean?
WFH refers to full-time workers that have the option to be able to work from home, typically in the comfort of their homes. WFH guidelines typically pertain to employees who reside within one country and can work at “home” either some or all the time.
WFA policies differ. The policies allow workers to work remotely for a short period, generally for more than seven days but less than 365 days. These durations are considered to be the legal gray zone in several countries. The durations are more than typical business travel. However, they aren’t long enough to warrant the permanent residence alteration.
Although WFA isn’t new for sure (me including), it has been slipping through the regulatory cracks. As more people join the WFA ranks and become permanent residents, they’re likely to be subject to increased surveillance by the regulator and stricter enforcement. This is another reason to have a properly-crafted WFA policy to protect your business from tax compliance and legal risk.
WFA Policies: What Do Employers Stand to Gain?
Both complex types of research, and solid evidence from anecdotes, suggest that allowing employees to work remotely could bring tangible benefits for employers, enabling them to attract and keep top talent, increasing happiness and efficiency, and cutting down on the need for and costs of space for offices. Employers providing permanent access to employees with the possibility of WFA gain the advantage of accessing the worldwide potential pool. GitLab, a software company GitLab estimates the benefit it gets as a remote business to be approximately $18,000 per worker annually.
Before the outbreak, studies conducted by top academics at universities found that remote working could boost the productivity of employees. A survey conducted in 2013 by Stanford Professor of Economics Nicholas Bloom found that the change from traditional workplace work to working at home led to a 13 percent rise in the productivity of employees. An observational study conducted by professors at Harvard University and Northeastern University discovered that allowing employees to change from WFH to WFA resulted in a 4.4 percent productivity boost.
The feedback from employees is constant and precise: inflexible working conditions are among the most common reasons employees cite to justify quitting their job. In a recent survey conducted by GoodHire, 70% of the respondents stated that they’d have to use some remote working arrangement to keep their jobs.
There is a growing body of evidence that suggests that a large number of employees are willing to accept a reduction in their salary to be able to remote work continuously. While the exact amount will vary by source, the majority of those surveyed would be willing to take a salary cut from 5% to 10% to make remote work arrangements permanent.
