Maintaining compliance in an ever-shifting, increasingly globalized world has its own peculiar challenges which will only grow more complex as time marches on. By understanding these top challenges, you can better situate yourself to take advantage of the opportunities they bring with them.
New Market Compliance
A 2016 study concluded that “87% of U.S. companies believe international expansion is a necessity for long-term growth.”
The Covid pandemic may have highlighted issues associated with increased globalization, but it also underlined its inevitability. We are more aware of the global supply chain than ever before, and practically anyone can interact with it in meaningful ways through the internet.
And with each new territory with which your business interacts there are a bevy of new laws and regulations – and the onus is on you, the owner, to successfully navigate them.
Tax calculations and regulations are documented in native languages, and the regulations surrounding labor vary widely within foreign markets. For instance, in Mexico, new hires must be registered with the government within a five-day window whereas in Spain such registration must be completed before employment begins.
Violations in this realm can incur immense costs.
While on-the-ground support is clearly the best scenario, it might not be scalable for your enterprise. Couple that with the rapidity with which businesses are expected to grow, and even the most experienced HR departments can feel the strain in grappling with international compliance.
While international compliance poses some obvious challenges, domestic compliance has issues all its own. Different regions and municipalities have their own laws which are being continually updated. Failure to comply with these tax deadlines can result in massive penalties and fines.
So how do you know where to focus your attention? The stakes with payroll compliance are high, and the particularities of the provinces vary.
Uruguay, Argentina, and Chile require employee signatures of pay-slips upon receipt. Overlooking this would leave you open to lawsuits for lost wages.
Italy requires an Italian bank account to pay monthly statutory tax returns. Ignorance of this fact would lead to a massive headache on the due date.
However, the legal aspect of compliance is just half the battle. Compliance failures can erode workforce morale in spectacularly short order. How long can an employee be expected to wait for their wages? A few hours? Days? Your reputation is at stake if you miscalculate.
One survey showed that 49% of American workers will be looking for a new job after just two payroll errors. Now you’re increasing recruitment allocations to fill existing positions.
International benefits policy requires careful consideration.
First, acquaint yourself with the statutory requirements in each country. Bonus points if you’re fluent in the local language as many governments will detail these statutory minimums on their websites
Here is a prime opportunity to consider your current spending on benefits. Though the U.S. requires substantial coverage from large employers, most countries have some degree of state-provided healthcare coverage. Thus, offering prime, private health insurance to global workers may prove redundant and costly.
The demographics of your workforce can also significantly shift your benefits calculus. A senior director in the U.K. may need supplemental private healthcare for their family, whereas a single salesperson in France might opt for reduced healthcare coverage and opt instead for a richer profit-sharing package.
While gender inequality dominates the headlines, so too does the definition of family and the practice of family leave.
The U.S. design of shared parental leave is markedly different from the 52 weeks shared between parents in Denmark. Considering these differences complicates more than the compliance itself, it also complicates the allocations of resources in response to cultural relationships to regulations.
The liability insurance you provide your employees will vary from country to country. Most have different schedules of resources for such insurance. However, many global organizations have begun adopting private insurance protections even in nations with established plans. This does more than appease legal responsibilities, it also addresses ethical responsibilities.
An organization’s culture should promote the well-being of everyone involved, regardless of their geographic location. Assessing insurance liabilities is a basic way to address the effectiveness of your employee protections.
Termination Policies and Practices
There are only two certainties: death and taxes. With a particular lens, terminations can fall into both categories.
Incorrectly managed terminations can be unpleasant for all parties involved.
“At-will employment” exists only within the U.S., a streamlined termination function that is not to be found elsewhere around the world. Therefore, when considering terminations abroad, there are a multitude of procedures and processes that must be adhered to if you’re to maintain compliance.
Theft or other criminal acts are simpler to navigate during termination regardless of the geography. Laws are effective guidelines for proper behavior. The difficulty comes in issues tethered to employee performance or disagreements. Different places have different requirements for legal termination of employees based on performance. Most will require documentation and evidence, and in some places, it can take up to a full year to legally terminate an employee.
There are instances where a justification can be made, but there are still notice periods and severance pay mandates that require proper attention.
Retirement and Pension Plans
The U.S. workforce is aging rapidly. While the covid pandemic coaxed some people to accept retirement, Gen Xers and Baby Boomers still make up 58% of the workforce. With this concentration of older workers comes interesting resource planning – the pensions for an anticipated exodus.
There are no hard and fast international rules about retirement age, it is useful to consider how different countries approach retirement. France allows workers to claim retirement after reaching the age of 62, but who may also gain a higher pension by working to the full-rate retirement age of 67. The U.K. recently rewrote pension laws to require employers to contribute at least 3% into an employee’s private pension scheme.
This reflects a growing global trend – statutory requirements of private businesses to allocate resources to employee pension funds.
Global HR compliance is unavoidably challenging and complex. However, by facing it head-on, business owners may be able to take the advantages presented by shifting global sentiments, winning victories for themselves and for their increasingly global workforces.
Launchways is here to support you and help you navigate international workforce compliance issues.
Human Resource managers are vital to the success of an organization. They communicate with every level of an organization and consistently impact business activities – from recruitment and retention to continued training and compliance.
While HR is primarily concerned with the “human” aspect of a company, it is also necessarily interested in the ways team members relate with organizational, state, and federal regulations which govern the business’ operations.
Navigating these requirements is a complex undertaking often relegated to legal entities and compliance committees. But because of the wide-reaching applications of regulations, HR is particularly well-suited to positively affect compliance outcomes.
Effective compliance begins with people, policies, training, and communication, which is exactly what HR deals with daily.
HR’s Role in Compliance
Successful compliance begins and ends with the functions of Human Resources
So, what is it?
HR Compliance is the process of defining and implementing policies concerning current laws and regulations. From there, it is the insurance that employees acknowledge, understand, and comply with these policies.
While it might deal primarily with employment laws, most compliance regulations revolve around people’s behaviors.
Crucial in Corporate Compliance
HR managers are a protecting force against the wide and varied threats to doing business. Beyond safeguarding employees through adherence to federal law, they also spearhead company efforts to mitigate risk at every turn.
HR is a far-reaching department, and thus communicates with employees at every level. Being responsible for hiring and training makes HR the best place to be for building an organizational culture of compliance.
HR’s compliance management generally falls into three common categories:
1) Employment Law: This is the acronym department, featuring laws and regulations that apply specifically to Human Resources which include Family Medical and Leave Act (FMLA), hour and wage laws (Fair Labor Standards Act), anti-discrimination laws [Americans with Disabilities Act (ADA), Title VII of the Civil Rights Act, Age Discrimination in Employment Act (ADEA)], and anti-harassment laws.
2) Employee Health and Safety (OSHA): While having traditionally covered hazards, HR has recently played a larger role in employee health and wellness. Research continues to show the benefits of healthy employees, resulting largely in higher rates of productivity, reduced benefits costs, and fewer sick days.
3) Hiring/ Firing Processes: While traditionally focused on labor relations and unions, this now includes a greater focus on immigration laws. Severing relationships with employees in such a way that does not invite problems or lawsuits have long been a primary function of HR.
Implementation of HR Compliance Best Practices
With the multitude of functions carried out by HR departments, how might HR managers most directly influence their company’s compliance efforts?
Let the Right Ones In
In other words, “hire the right people.” This is perhaps the most obvious answer to the question, but it is the most significant challenge in growing a business. But how do you define what the right person for the job looks like?
There are multiple laws and regulations regarding onboarding, from the Fair Labor Standards Act to minimum wage and overtime rules. The ADA protects against disability discrimination, and the Age Discrimination in Employment Act protects those over 40 from similar discrimination. Thus, it is important to understand what regulations surround the onboarding process.
Beyond legal considerations, another primary concern for HR is bringing in recruits who pose the least risk regarding continued HR compliance. Ethical red flags from previous employers can be multiplied in high-liability industries or roles.
The entire recruiting/hiring/onboarding process is in the purview of HR and sets a tone for an employee’s career at a company. It exerts a major influence on overall workplace culture, and culture is an effective measure of a company’s compliance.
Consistently Update Employee Handbook and Policies
There are a wide array of approaches to handbooks and individual policies. Some companies use a single handbook for the entire enterprise, others opt for department or individual-specific policies. Whatever the preferred method, HR usually has a hand in the writing and conveyance of these policies.
All too often these policies are thoughtfully created, then cast aside and neglected in day-to-day operations. In practice, they should be living documents, constantly adapting and changing. While the core might remain the same, the details will shift. When framed this way, these policy guidelines can have a real impact on an organization. Effective management should change and grow with regulations to ensure continued compliance
Regular reviews and revisions of policies come to nothing, however, if they are not shared with and lived by the teams they directly impact.
The Necessity of Two-Way Communication
Of course, communicating these constantly shifting expectations and policies can be points of friction. Impressing the importance of new policies is one thing, but making them resonant in day-to-day interactions can be another thing entirely.
This is where communicative leadership is vital. Consistent, clear communication from leadership will help increase employee buy-in and convey a sense of top-to-bottom accountability. Still, effective communication from leadership is only one facet.
Communication must also flow honestly and unimpeded from employees to leadership. Some employees may be able to address concerns with management directly, but others may prefer a less direct avenue of recourse. An anonymous whistleblower hotline is a fine example of a formal mechanism that solves this problem. But it cannot function without the informal aspect of HR and their willingness to hear individual concerns. Safety and processes need constant attention, and so addressing issues surrounding these concerns must be done promptly and effectively. If left unchecked, trust begins to erode between employee and employer.
Transparent communication is one of the highest goals for an organization. A hazard-free flow of communication with administrative bodies, as well as accountability in all offices has multiplying effects on regulatory compliance as well as workplace satisfaction. Win/win.
Train On Compliance Regularly
It is tempting to host one extravagant, day-long training on sexual harassment or diversity, have employees sign an attendance sheet, and leave it at that for another year. It seems simple and to the point, but if there is not a direct link to your company’s core values, this grand show might fall on deaf ears and blind eyes.
Instead, consider shorter, more personal online pieces of training that coincide with policy updates or general reviews.
Compliance should complement your core values. By personalizing messaging and making it a consistent pursuit, you increase the likelihood that your employees will internalize the training. Practicality and consistency are fundamental to this success.
In short, the integration of meaningful compliance training into your training schedule can have an immense impact on workplace culture; indeed, it should be a vital part of it.
Audit HR and Compliance Regularly
The other side of meaningful compliance training is the insurance of that training’s effectiveness. Enter the audit. Essentially, this is when HR teams look at hard data relating to regulations they interact with directly – dispute documentation, hiring processes, employee surveys, policy manuals, etc.
The aim is to diagnose issues before they turn into problems. It can shine a light on what is working, and what is not. Once a general landscape of current practices is illuminated, the organization can strategize ways to reach compliance, maintain it, or more effectively imbed it in their culture.
Of course, this type of audit requires a thorough understanding of applicable laws and industry best practices. It also comes with a non-insignificant time-cost alongside other day-to-day human resources compliance tasks. However, it is tremendously valuable in the continued legal successes of a business.
Sounds good, right? What could be better than ensuring regulatory compliance and increasing a positive workplace culture at the same time?
Then again, desire and action are not the same things. It can be taxing work, and oftentimes those most concerned with these issues are already wearing more than one hat in their organization. Luckily, there are steps you can take without attempting a full-fledged HR compliance audit yourself. You can educate yourself first. You can evaluate the state of your current HR policies and measure them alongside current regulations. You can seek third-party guidance through these issues. This is exactly what we do here at Launchways – we work alongside our clients to navigate the complexities of regulatory compliance. And we do much more than that too! Contact us to learn how else we can help.
- Ensure that 100% of their workforce is vaccinated against the COVID-19 virus, with any of the emergency or fully FDA-approved vaccines; OR
- Receive a weekly negative COVID-19 test result from all unvaccinated employees prior to coming to work.
In addition to this vaccination and/or weekly testing requirement, employers must also provide paid-time off benefits for the time needed to get tested and post-vaccination recovery, if necessary. OHSA should release its ETS in the coming weeks, outlining the specifics of this new ruling and how to comply with its requirements, including information on payment responsibility for vaccinations and testing and the timeline for implementation.
There are many compliance concerns raised by this plan under ERISA, HIPAA, certain wellness program rules, and other regulations that will need to be contemplated by employers. Upon OSHA’s issuance of the ETS, we will provide further guidance and information on compliance with the requirements. We also recommend you reach out to your legal counsel for assistance. If you are a large employer and would like to discuss the above requirement in more detail or if you are a healthcare entity, federal contractor, or federal government employer and would like information on how the other pieces of this plan apply to you, please visit https://www.whitehouse.gov/covidplan/ or contact Launchways directly for additional HR and compliance support.
In observance of LGBTQ+ Pride Month and the one-year anniversary of the landmark Supreme Court ruling over Bostock vs. Clayton County, the U.S. Employment Opportunity Commission (EEOC) has announced new resources to help employers understand the protection of applicants and workers against discrimination regarding sexual orientation and gender identity. Along with a new landing page summarizing information pertaining to sexual orientation and gender identity discrimination, they’ve released a new technical assistance document to “help educate employees, applicants and employers about the rights of all employees, including lesbian, gay, bisexual and transgender workers, to be free from sexual orientation and gender identity discrimination in employment.”
The EEOC’s new resources taken together with the Bostock ruling present wide-ranging implications for employers across the U.S. Before we dive into the key points of these changes, we need to take a closer look at how we got here.
Bostock v. Clayton County, a Brief Overview
The significance of the EEOC’s new guidance documents cannot be fully appreciated without understanding the consequences of last June’s Bostock v. Clayton County Supreme Court ruling. That 6-3 decision added discrimination on the basis of sexual orientation and gender identity to the list of practices deemed in violation of Title VII of the Civil Rights Act of 1964.
The Supreme Court consolidated 3 separate cases into this historic decision: two centered upon the firing of gay men due to their sexual orientation (Bostock v. Clayton County and Altitude Express Inc. v. Zarda) and another on the firing of a transgender woman due to her gender identity (R.G. & G.R. Harris Funeral Homes Inc. v. Equal Employment and Opportunity Commission). The question at hand was “whether an employer can fire someone simply for being homosexual or transgender.” The opinion of the court, authored by Justice Neil Gorsuch, was unambiguous: “An employer who fires an individual merely for being gay or transgender defies the law”. Gorsuch also noted that various caveats regarding religious liberty issues stemming from the First Amendment, exemptions provided to religious employers in Title VII, and the Religious Freedom Restoration Act were not addressed.
Bostock v. Clayton County has since been interpreted by the EEOC and other courts to prohibit all forms of harassment and discrimination based on sexual orientation and gender identity.
The EEOC’s New Guidance Explained
The new resources provided by the EEOC consolidate critical information concerning sexual orientation and gender identity discrimination along with links to fact sheets regarding recent EEOC litigation on this topic. Also included is a new Technical Assistance Document explaining the implications of the Bostock decision and reiterating that employers cannot:
- Discriminate against individuals based on sexual orientation or gender identity with respect to terms, conditions, or privileges of employment, including hiring, firing, furloughs, reductions in force, promotions, demotions, discipline, training, work assignments, pay, overtime, other compensation, or fringe benefits.
- Create or tolerate harassment based on sexual orientation or gender identity, including harassment by customers or clients. This may include intentionally and repeatedly using the wrong name and pronouns to refer to a transgender employee.
- Use customer preference to fire, refuse to hire, or assign work.
- Discriminate because an individual does not conform to a sex-based stereotype about feminine or masculine behavior (whether or not an employer knows the individual’s sexual orientation or gender identity).
- Require a transgender employee to dress or use a bathroom in accordance with the employee’s sex assigned at birth. However, employers may have separate bathrooms, locker rooms, and showers for men and women, or may have unisex or single-use bathrooms, locker rooms, and showers.
- Retaliate against any employee for opposing employment discrimination that the employee reasonably believes is unlawful; filing an EEOC charge or complaint; or participating in any investigation, hearing, or other proceeding connected to Title VII enforcement.
The Technical Assistance Document also notes that employers are prohibited from creating, or tolerating, harassment, or discriminating against straight or cisgender (those who identify with the sex assigned at birth) individuals. Additionally, the EEOC addresses the tension between protections provided to employers and employees with sincerely held religious beliefs and LGBTQ+ applicants and employees by noting, “Courts and the EEOC consider and apply, on a case by case basis, any religious defenses to discrimination claims, under Title VII and other applicable laws.”
5 Key Points for Employers
Title VII of the Civil Rights Act of 1964 now prohibits discrimination on the basis of sexual orientation or gender identity nationally, regardless of state and local laws. Many recurring questions regarding protections for LGBTQ+ employees have been clarified by the EEOC’s new guidance, and here are the 5 key points for U.S. employers to take away:
- Discriminatory action cannot be justified by customer or client preferences. “An employer covered by Title VII is not allowed to fire, refuse to hire, or take assignments away from someone (or discriminate in any other way) because customers or clients would prefer to work with people who have a different sexual orientation or gender identity.”
- Whether or not an employer knows an employee’s sexual orientation or gender identity, employers are not permitted to discriminate against an employee because that employee does not conform to sex-based stereotypes about traditional feminine or masculine behavior.
- Employers requiring transgender employees to dress in accordance with the employee’s sex assigned at birth constitutes sex discrimination.
- Employers may have separate bathrooms, locker rooms, and showers for men and women. However, “all men (including transgender men) should be allowed to use the men’s facilities and all women (including transgender women) should be allowed to use the women’s facilities.” Because the Supreme Court left this issue unaddressed in the Bostock ruling, stating: “Under Title VII… we do not purport to address bathrooms, locker rooms, or anything else of the kind,” this is a controversial issue that is still developing.
- Accidental misuse of a transgendered employee’s preferred name and pronouns does not violate Title VII. However, “intentionally and repeatedly using the wrong name and pronouns to refer to a transgender employee could contribute to an unlawful hostile work environment.”
The implications of the Bostock ruling and the EEOC’s new guidance are far-reaching and consequential, and they make it clear that any discrimination on the basis of sexual orientation or gender identity is now prohibited under Title VII. However, some matters remain unresolved, such as gendered bathrooms/locker rooms and potential conflicts with protections provided to private employers and employees with sincerely held religious beliefs. It is paramount for all U.S. employers to review the EEOC resources, assess their policies and practices to ensure that they are in compliance, and remain attentive to further developments regarding LGBTQ+ workplace discrimination law.
The coronavirus pandemic has proven a broad and nearly universal view that American’s relationship with technology will deepen, including their ability to work from almost anywhere.
If you work remotely in the same state as your business location, you can follow the same state laws for income taxes and employment taxes. But as a remote employee, you need to weigh in the tax implications of cross-border work arrangements.
Below are the laws and taxes considerations to make as a remote employee working abroad:
Be Aware of Your Tax Obligations
You will want to consider your current tax situation and see how it may change if you leave the country. While the U.S. tax code applies to all tax citizens and green card holders no matter how long they live and work remotely outside the United States, some exclusions are available.
You may qualify for a foreign tax credit or the Foreign Earned Income Exclusion (FEIE), which lets you reduce or eliminate all or a portion of your foreign earned income (up to $108,700 from U.S. taxes). This exclusion is not valid for passive, or investment income such as interest and dividend and only includes earned income, such as:
- Self-employed income
Generally, many countries have bilateral tax treaties which prevent you from paying tax on the same thing twice.
Determine Your Primary Residence or Tax Home
Before you qualify using the credit or FEIE, it’s crucial to make sure your tax home is outside the United States.
For instance, countries like Portugal will let you claim to be their tax resident if your primary residence is registered there, and you stay for 183 days or more in any tax year. On the other hand, the U.K. implements a “Statutory Residence Test,” which considers the amount of time you spend and work in each tax year, separately.
According to the IRS,
- Your tax home is the general area of your principal place of business, employment, or post of duty, regardless of where you maintain your family home
- Your tax home is the place where you are permanently or indefinitely engaged to work as an employee or self-employed individual.
- Having a “tax home” in a given location does not necessarily mean that the given location is your residence or domicile for tax purposes.
- If you do not have a regular or main place of business because of the nature of your work, your tax home may be the place where you regularly live.
- If you have neither a regular or main place of business nor a place where you regularly live, you are considered an itinerant, and your tax home is wherever you work.
As U.S. citizens, the foreign income exclusion comes into effect only if you spend at least 330 days of the tax year abroad, not including time on planes. Then, if you qualify, you can use Form 2555 to figure your foreign earned income exclusion and your housing exclusion or deduction.
Comply With Foreign Reporting Requirements
Many digital nomads and expats may also be subject to additional tax reporting, such as filing a Foreign Bank Account Report (FBAR).
An FBAR reports your money that resides in offshore bank accounts. Any U.S. tax resident with a foreign account balance of $10,000 or more during a specific tax year needs to file an FBAR.
This account balance is calculated in its totality, which means it is a sum of all your foreign bank accounts. Individuals who have signing authority for an overseas account or a joint account also need to file an FBAR.
FBAR is filed individually to the Dept. of Treasury and submitted electronically through the BSA e-filing site.
Know Regulations Around State Taxes
Certain U.S. states require ‘verified’ state residents who work outside to pay state taxes, or they have to prove they are no longer state residents. For example, the state of Colorado requires proof of non-resident status, and other places such as California need you to pay state taxes even if the federal government has certified you as a foreign resident.
If you plan to work abroad, this can be a problem for many reasons. In some cases, owning personal property such as a car or even a library card can make you liable to pay state income tax.
That’s why know more about state taxes and/or relocate to a low or no-tax state before you depart, rather than being caught unaware by years of unpaid penalties.
Whether in the U.S. or abroad, if you have an employer, they are required to pay social security and Medicare for you. But as a self-employed digital nomad, you may be liable for SECA (Self-Employed Contributions Act), based on your country of residence.
However, you may be exempt from SECA tax if the U.S. has a Totalization Agreement with the country you are residing in. Under this agreement, SSA will account for your periods of U.S. coverage that qualify for benefits under the social security program of an agreement country.
Depending on your situation and the period spent in a foreign country, you may have freed yourself of commutes, but knowing your tax obligations will help you navigate through the complexities of U.S. taxes no matter where your work takes you.
We are now more than a year since major news organizations first began sounding the alarm for the emerging COVID-19 pandemic and looking back on articles from that time can be quite jarring. In mid-March of 2020, Pennsylvania Governor Tom Wolf gave a speech asking for “two weeks to flatten the curve”. That optimism was echoed in American workplaces, with expectations of employees needing to work from home for perhaps a few short months. Over a year later, and companies are only now announcing plans to bring employees back into their physical workplaces. As we watched the pandemic stretch from weeks into months, and from months to years, it became evident that the changes brought about in the business world were here to stay.
A long year of uncertainty and upheaval has left many organizations without a sense of clarity regarding what their employees want and need.
Perhaps the most consequential topic of conversation and debate within the workplace going forward will revolve around how to manage the changing expectations and demands of employees. The general trend is toward a growing number of options for handling schedules, workplace flexibility, and benefits. If the changes brought about by the pandemic were short lived, one might expect a relatively quick and graceful return to normal routines and procedures. We all would have happily returned to our physical workplaces and continued with business as usual.
That obviously is not what happened. It took many of us months to become acclimated to remote work, and enough time has gone by now that these changes are quickly becoming a durable part of the modern world. After more than a full year, many of us have become quite accustomed to working from home, and some have even made drastic changes to their lifestyles and are now dependent upon the flexibility of these new work arrangements. Because of this, it is impractical, perhaps untenable, for us to expect the workplace to return to pre-pandemic norms.
Many organizations are already realizing this, marking an incredible transformation in the perception of remote and hybrid workforces. In the early stages of the pandemic, very few organizations would have taken seriously the notion that these changes would become permanent. Only a small percentage of companies were utilizing remote work at scale, but the experiment of the last year has proven its feasibility, and now there really is no going back.
This subject is complex and multi-faceted, but the primary concern on most people’s minds is scheduling. Of course, not every organization is going to make remote work the norm going forward, but it will likely remain an option in the vast majority of them even after physical workplaces reopen. Many of the world’s largest companies have already announced plans to embrace remote work as at least part of their plans going forward, such as Microsoft, Spotify, Dropbox, and Uber, among others. It is not uncommon to hear of companies that have decided to end their leases and get rid of their physical offices altogether. This trend has spawned office vacancy crises in major cities throughout the US and, considering that more than half of employees currently working remotely would like to continue to do so, this is not expected to be a short-lived phenomenon. If organizations want to remain competitive in the labor market and retain their talented employees, they need to embrace the hybrid workforce transformation.
Remote work is not for everyone, however, and it is important to keep in mind that many are eager to return to their physical workplaces. Pandemic related safety measures are relaxing in many parts of the country, but where they remain in place organizations are exploring creative strategies to keep occupancy to recommended maximums. Staggered schedules and compressed workweeks have emerged as popular approaches because they allow employees to return to the workplace if they wish by rotating who is coming in at various times. Flextime, a strategy that allows employees to work at the times that work best for them, is another option to keep an eye on as it is likely to be in high demand as physical offices and workplaces reopen.
Despite their hesitation, organizations are realizing that strategies like flextime and remote work come with tangible benefits, such as increased employee productivity, retention, and engagement.
Organizational Challenges Incoming
It is no secret that at the top of the list of any business’s concerns is ensuring that the policies they follow protect and benefit their bottom line, and this topic is no different. It simply is not feasible to expect every company to accommodate 100% of their employees working remotely going forward, but expectations have changed, and the smart move will be to try to meet those expectations where possible.
Many of the changes we have seen in easily adapted work like IT and Human Resources are generally here to stay, as are video conferencing tools like Zoom and Skype. We should also expect to see new tools emerge to better meet the needs of the new hybrid workforce. Solving the major pain points of remote work, like communication and organization, will be a new frontier in software development going forward. Because of these changes, companies are likely to start aggressively seeking out management and staff that have experience working with distributed teams.
As the pendulum swings in the direction of remote work, we should all be wary of a potential pitfall: overcompensation. The desire to be at the leading edge of this transition is understandable, but we currently only have a year of data to verify the feasibility of hybrid workforces, and the practicality of it is likely to vary widely from organization to organization. Many will be drawn to the promise of lower expenses and reduced complexity, but the results are sure to be mixed.
Organizations should be leery of changing too much too quickly despite the pressures that they are likely to face. The first order of business should be to get those who want to work in a physical workplace and those who want to continue to work remotely set up to do so as quickly and efficiently as possible. It is important to let the dust settle and a sense of normalcy to return before any further drastic changes are made. Given where much of the country remains regarding COVID-19 precautions, simply reopening workplaces to any degree is going to be a significant enough challenge already.
Many employees will prefer to continue working from home, but that does not mean that it should become the new standard just yet. The importance of the social component of life and work is not to be underestimated, as we have seen over the last year, so it comes as no surprise that many of us yearn to see their coworkers and customers in person again.
As companies make decisions about how to handle the emergence of remote work, the key will be for them to focus on providing options to their employees, not requirements. Regardless of what they decide, it is important that their decisions are calculated and deliberate. Most organizations spent the last year simply trying to ride the wave and not drown amid the chaos – leaving aside, of course, the companies that were already working remotely before the pandemic.
Now that the experiment has been run and the results are coming in, everyone is starting to look toward the future. This should be considered a great opportunity to evaluate the success and failures of what was tried and make decisions based on those results through the lens of what is best for that particular organization going forward. We are no longer improvising on the fly. Companies are going to start learning from what has happened and it is the companies that are deliberate about their decisions regarding remote work and carefully develop their plans that will be most competitive.
The first step in making such a plan should be to collect and analyze as much data as possible from your employees about their interests and expectations regarding remote work. This could take the form of interviews, group discussions, company-wide surveys, one-on-one conversations, or some combination of these options. Regardless of the method, management needs to get a scope on what their employees want before they will be able to assess what is feasible to offer them.
Tough compromises are almost inevitable because, in most situations, neither the employer nor the employee is going to come away with everything that they want. Consider more complex situations, like the companies that will not be able to offer the same remote work options to all their employees because of differences in the type of work that they do. Ford recently offered 86,000 of their employees the option to continue working from home permanently, but this is not possible for its 100,000 plus factory workers. The cost of workforce infighting can be substantial, so to prevent conflict, organizations may consider offering other benefits to the employees who work in roles that cannot be adapted to remote work. Whatever they do, it is imperative that they reaffirm the importance of those workers.
Taking all of this into consideration is going to be overwhelming for a lot of organizations, especially small businesses. Management should remind themselves that they are not going to be able to please everyone. All that can be reasonably expected is that they make good-faith efforts to meet the needs of as many of their employees as possible.
The knock-on effects from the pandemic, such as the emergence of remote work, have forced organizations and employees to completely re-evaluate their priorities and needs. Tough decisions are going to be made and, in many cases, both employers and employees are going to have to look elsewhere to have those needs met. Disruptions like this are undoubtedly stressful, but if the situation is managed strategically, at the end of the day we might all be better off.