How to Build a Work From Anywhere Policy

In December I had the opportunity to chat with PerchPeek to provide insight into the important factors to consider for HR leaders before diving into a Work From Anywhere model.

Below is a reprint of an article from their website with the highlights from our session. https://www.help.perchpeek.com/post/how-to-build-a-work-from-anywhere-policy-with-kpmg-s-global-mobility-partner-ursula-lepperoli

You can also catch the replay of the webcast here

As companies scramble to react to the “Great Resignation”, offering more flexibility from the workplace and trying the build a ‘mission’ that their employees can truly resonate with, we have seen the emergence of the Work From Anywhere strategy. This allows employees to work from wherever they like in the world, and has been used by companies such as Atlassian, Revolute and Amazon. However, there are many pitfalls, most notably from compliance and culture, that make building a Work From Anywhere policy a challenge that takes serious preparation.

Why Develop a Work From Anywhere Scheme

Over the past couple years, companies have had to become more and more flexible with their businesses as policies have changed due to the pandemic. Due to stay at home policies, many people have experienced working away from the office, and according to Ursula, are “becoming more vocal about what they want… they don’t necessarily want to go to the office everyday.”

According to a Qualtrics survey, 4 of 5 candidates looking for a new role say that the ability to live and work remotely is a very important factor for them. She suggested the best course of action for companies to take is to move forward with the Work From Anywhere framework if possible, as it helps keep employees happy and thus increases retention.” If we've proven over the pandemic that we can Work From Anywhere for white collar employees, then how can we be creative and innovative and allow that to extend to give our employees the flexibility that they want and should be able to have”.

Caveat- Don’t just turn a blind eye!

While keeping employees happy is important for retention, there can be such a thing as too much freedom in working from anywhere, and Ursula warns against turning a blind eye to knowing exactly where your employees are. “There’s too much risk just to have a free-for-all”, Ursula said in reference to how a company that doesn’t know where it’s employees are opens itself up to the possibility of being non-compliant with certain countries' tax laws, which we cover in more detail later in the article.

Tracking Staff Whereabouts

So how can you keep track of your employees? With the expansion of the workforce being able to be (almost) anywhere on the globe, there is a definite need for keeping track of your employees. Ursula shared with us how KPMG uses an app that the employee can use to share where they are with their employer. Utilizing technology in this way, alongside creating a solid policy for working from anywhere, goes a long way in helping create a system that works.

Where Can Your Employees Work?

If there is a system in place and a way to track employees, then Work From Anywhere starts to become a plausible option. However Ursula pointed out some of the further key questions companies need to be asking themselves:

1. Is it locally or in a different country? Working from anywhere locally (same country) is going to be a lot easier to facilitate than working from a different country with differing tax laws, risk factors, and time zones.
2. Is there an entity for the company in the country? Depending on the company, they may only allow working from a country where they have an entity, whereas other organizations will be more flexible with their employees.
3. Will they require a work visa? If the country they will be working in requires a work visa, the organization needs to decide if they will help facilitate their employee in getting one.

We’ll get onto these later, but let’s look at some of the other key elements a company needs to consider before diving into Work From Anywhere.

The Impact on Culture Building

With a Work From Anywhere system, another difficulty that can arise is having to try and build a culture remotely. Ursula points out that “there might be limits to what can be achieved through a computer screen” and meeting in person, whether that be seasons of working from anywhere, or set times during the year where everyone collaborates in person, benefits inter-office connections and innovation. As an example, she referenced an Australian tech company that meets in person four times a year, to encourage bonding between team members, although she didn’t necessarily agree this as enough. “I don't know that four times is enough in the year for me, I certainly would want some more human connection with people that I work with than four times a year”.

This is where the importance of really understanding the culture of your organization comes into play. Does your company need a lot of face to face interaction or will Zoom calls work for the majority of the time? Ursula recommends taking baby steps if you are unsure, to find where that compromise is.

With organizations that have employees spread in different corners of the world from one other, this can be especially difficult, as the time zones are so different. Ursula told us how KPMG Australia handled a scenario just like this - an employee stuck in the UK due to Covid was given a rule to be online for a couple hours at the same time as the Australian employees and clients - but shared that even using this method it was difficult with such a major time difference.

A benefit Ursula did point out was having employees all over the world allows companies to get closer to a 24/7 operation, although this is obviously company and industry-dependent.

Data Security & Tech

A big concern of working from anywhere is the risk to cyber security. Some regions such as South America and South East Asia are notoriously high-risk for data breaches and malware infections. “You need to create a mature data security policy before you let people go and work elsewhere.” This is especially true for smaller companies where policies for business travellers may not yet be in place to protect data.

There also needs to be consideration of actions to be taken in terms of tech support for a remote-operating employee, to prevent a major loss of productivity when tech-issues arise.

Key Tax Implications

Ursula shared seven key implications of working from anywhere:

• Corporate Tax
• Company Withholding and Reporting Requirements
• Individual Income Tax
• Workers Compensation
• Privacy
• Cyber Security Risk
• Social Security

A Quick Note - Tax Advice for solopreneurs

When looking at working from anywhere as a solopreneur, the tax laws in different countries can be daunting. For individuals, Ursula recommended checking out the WorkFromAnywhere website which offers individuals support and alerts them to any tax risks from their international relocations.

Corporate Tax Risks

When it comes to corporate tax, Ursula recommended getting advice from a tax provider if your organization doesn’t have an in-house corporate tax team. Depending on the country and the tax laws, your company’s profits could be getting taxed just because you have an employee there, increasing costs and administration.

She pointed out that different countries have different tax rules, and used the fact that in Australia “non-cash benefits are taxed to the employer” as an example. Seeking out someone knowledgeable about tax laws can help circumvent being surprised by taxes you weren’t aware of due to not being familiar with the country.

Another key consideration is senior management. To summarise: “When someone is very senior or has the ability to enter into contracts for a company you might have a permanent establishment on your hands.”

Individual Tax Implications

Ursula again recommended getting advice when it comes to individual income taxes, as every country is going to be different. Some countries offer digital nomad visas to encourage an influx of people, and as part of that will offer a personal income tax holiday. That being said, consideration must be made for your home country tax position as the same tax holiday may not exist if you remain a resident. Double taxation agreements should also be referenced as this could impact the taxation of income in both countries. Each case is unique and should not be undertaken without professional advice.

Employee Welfare

Employee welfare is a crucial part of the puzzle, and understanding a company’s obligations to its employees in each of the countries they operate in is very important to avoid legal issues. For example, in a particular Scandinavian country, Ursula shared that companies were required to provide office equipment for an ergonomic setup if an employee was working from home. She recommended having a list of “safe green light countries” where your organization has done their research and knows there are no extra obligations for the employer, in order to safeguard against this.

Social Security Implications

Another area that requires thorough research are the social security agreements between countries. A company needs to be thinking “If [an employee] loves Mexico, and it's possible for them to contribute to some kind of plan there, do you want to allow people to do that if it's possible with your reporting structure?

Some countries have partner agreements that allow transfer of social security back and forth between countries but it really varies, and if one does not exist it can penalize an employee who contributes and then is heavily taxed or unable to access any benefits at retirement.

Healthcare Implications

Naturally, employee health is always a key concern for business leaders. Healthcare varies so much from country to country, so this is another case where it depends on which country the employee wants to work from. Ursula gave the example of being able to access the healthcare system in the UK, since she is an Australian citizen, but would have to pay for healthcare support in the US. She stated this may be a case where it could be reasonable to expect the employee to manage the additional costs.

Starting the Policy Building Process

With regards to building the Work From Anywhere policy, Ursula outlined some key steps in kicking off the process:

1. Get engagement from your key stakeholders, on the reasons for building the policy and the goals for doing so
2. Decide ahead of time on the workflow of your strategy, with key milestones and considerations to have accounted for within the policy
3. Design a systematic approach for completion and approvals of milestones - which requires commitments from all the stakeholders involved, from tech teams to legal to people managers
4. Create a process of approvals for Work From Anywhere where a requester can see where they are at in the process
5. Keep your talented people at the centre of what you are doing, and your clients and customers closely behind.

Using Work From Anywhere in Talent Attraction

This model of working from anywhere is key for attracting employees, especially, those who don’t have kids, caring responsibilities or aren’t tethered down in other areas. It allows them to see other parts of the world without fear of losing their job. In her opinion, “Work From Anywhere is going to be a key retention and recruitment strategy for companies,” and should be used as a tool for building the company brand and profile for attracting top talent.

Who Doesn’t Work From Anywhere Work For?

When asked if there were any companies this model wouldn’t work for, Ursula named a few. Construction and manufacturing are examples of companies where many employees have to be on site. No one has gone fully digital yet and there is most likely a mail room person who can’t work remotely as they are tied to a location.

Where some employees cannot work from anywhere it becomes a question of how you will provide the benefit to those that can in a way that doesn't undermine motivation to those that can't.

Final Summary

In wrapping up our interview, Ursula gave us three great takeaways for companies looking to the future of the Work From Anywhere model:

1. Doing nothing is not an option, you will lose out to your competitors if no action is taken.
2. Get the right systems in place, and make sure you have the technology to support them.
3. Keep your talented people, your clients, and your customers at the centre of what you’re doing.