How to manage a workforce that works from anywhere

Reframe the talent strategy 

The normalizing of virtual working means opportunities for local organizations to tap into talent pools from new markets. However, the organization’s local talent policies and programs may not cater to the needs of a more global, diverse workforce. More strategically, organizations should understand how they can leverage a potentially expanded global talent pool to drive growth and internationalization. Organizations also need to be mindful of competition for their local talents, who may be drawn to overseas opportunities. 

It is therefore critical for organizations to build belonging and engagement within their increasingly diverse workforce. This will be an especially challenging task in a flexible working environment. According to the EY physical return and work reimagined study in 2020, such environments disrupt team collaboration and mentoring relationships, impede social connectivity and engagement, present challenges for individuals in managing work-life separation, and limit access to work resources, such as networks, technical support and office workspaces. 

To address these issues, organizations need to be prepared to drive cultural and technological transformations that support and embrace remote teaming, productivity and engagement. They need to continuously embrace rather than resist new ways of working by investing in ways to digitalize the human resource function and employee experience. The level of disruptive change required can only be achieved by a fundamental rethink of the organization’s future workforce model and a compelling vision to rally the workforce to collaborate and innovate.   

Work from anywhere has wide-ranging implications beyond its impact on the organizational culture and workforce. Organizations also need to manage risks and regulatory issues that arise when employees work in a country different from their home country. 

Mitigate compliance risks across jurisdictions 

One area that particularly concerns employers is the potential for employees’ physical presence, activities or location where employment is registered to create a permanent establishment in another country. This could expose the company to corporate tax, registration, payroll withholding and reporting requirements. Similarly, if tax residency is triggered for an individual based on local jurisdiction regulations, the person could be exposed to individual income tax and social security implications in multiple jurisdictions. Even for non-residents, the individual’s presence may trigger a tax or payroll reporting obligation. 

While Singapore has an extensive tax treaty network, the process of claiming exemptions or tax credits can be complex and individuals may be required to pay the tax due in each jurisdiction upfront. Where there is no tax treaty in place, it may not be possible to mitigate the exposure to double taxation, leaving the individual out of pocket. Singapore has not entered into any totalization agreements that cover social security, though there may be some coverage under the bilateral economic agreement between Singapore and India.   

Apart from building an awareness of the individual and corporate tax regulations, employers will also need a grip on compliance requirements in immigration and employment laws. Many countries require a valid visa or permit for a non-citizen to exercise employment in their jurisdiction. The company should also be aware of other local employment laws on areas such as the minimum wage, statutory limits on working hours, existence of unions as well as the support and protection of workers. Non-compliance could lead to extensive and costly penalties for both the individual and company.

Establish a cohesive, robust work-from-anywhere framework

As organizations redefine their tax and mobility strategies, they will need to integrate this with forward-looking talent strategies under a cohesive and robust work-from-anywhere framework. According to a poll of 5,000 business and HR leaders worldwide in March 2021 by the EY organization, the majority (95%) of respondents desire such a framework, but only 21% already have one in place. Organizations clearly need to do more to prepare for this new reality.

Unlike MNCs that often deal with assignees and business travelers, local companies with less experience in navigating these issues may face a steeper learning curve. Regardless of their level of experience, all organizations will need a new approach to stay compliant with the latest local regulations. 

They need to establish a robust tracking system to not only monitor company-level employment activities in markets where the business is physically present but also the work activities and mobility of employees worldwide, with the aim of reducing exposure to compliance risks. 

The COVID-19 pandemic and lockdown measures have forced organizations to adopt virtual working — albeit predominantly in the form of work-from-home arrangements. They now need a more radical shift in their views about work and the workforce. Work from anywhere is clearly not just about working from home; it has possibilities and implications that go beyond just doing more of the same from home.