New working policies on the rise in the fintech industry
The global pandemic has had a massive impact on work location, work culture and employee attitudes to the future work. The future of the office is not yet clear, but it is becoming increasingly apparent that a return to the way things were is not on the cards.
The majority of industries appear to be accepting this and leadership figures across multinational companies around the world are having deep and meaningful conversations with their HR counterparts and office managers in an attempt to define a new working culture that appears to be focused on a hybrid mix of remote working and office collaboration.
What all of this will look like is likely to vary across industries and will be dependent on a number of variable factors which unfortunately, are constantly in motion so it may be a year or two before a clearer picture emerges. In the past, companies have typically set up policies for business travel, short term assignment (less than 1 year) and long-term assignments- where HR, Payroll and Global Mobility teams collaborate together to ensure the company and employee are compliant in the countries they are working in. But in a post covid world, there may be a need to set up more permanent policies in regard to employee mobility.
What is of interest to all of us here at Payslip, is that some key players in the fintech industry seems to be proceeding with confidence towards this hybrid working model and are actively engaging with their workforces around the world to shape and craft a new company culture that will result in the emergence of significantly different working conditions from those that existed before the pandemic struck last year.
Revolut make a bold statement
It is always desirable, especially in innovative technology focused industries like fintech, to be considered fearless and a trailblazer. It should come as no shock then that specific companies are taking this opportunity, in a time of great uncertainty, to make bold and definitive statements about their specific approach to hybrid work and a new office culture.
Revolut appeared to be grasping the nettle with their public statement declaring that they will allow their diverse international employees to work overseas for up to 60 days a year. According to BusinessInsider the UK fintech giant, valued at a massive $5.5billion responded positively to employee feedback which stated that many desired to have the opportunity to meet their work obligations from their home countries for a number of weeks every year.
This is indicative of a growing trend among global employees who feel that if they’re doing their jobs remotely anyway in a non-office location and have proven to be just as productive in a remote environment, that there is no reason why they cannot effectively discharge their duties from their home country also.
This would enable them to return home more often and see their families without using up their quota of annual leave vacation time. It is an interesting approach from Revolut and what is even more interesting, is the question around which other companies will follow suit and make similar gestures to their geo-dispersed global workforce.
As is common with groundbreaking decisions like this, some companies will follow immediately and look to copy the model in an effort to appear innovative and in-keeping with the times while others will adopt a more cautious wait and see approach to see how this practice plays out in reality. And inevitably, there will be some companies of a more conservative nature who will simply not consider this to be a viable option at all.
We believe the above is a significant development -mainly because other companies are likely to follow suit, adopt a similar model and this is how a trend suddenly becomes normalized -this leads to expectations among employees and all of a sudden, leadership teams and human resource managers have something they need to address.
It is quite likely that digitally skilled employees, especially those of a younger generation, will be actively seeking roles in the coming years that allow them to work from any location in the world. They will believe that this is acceptable and take the position that if they have the right skills and can do the job, then location should no longer be an issue -they have supporting evidence from remote work during the global pandemic to prove their case.
Global employers who are not open to these suggestions may find themselves with a skills shortage as they fall behind in the war for talent – any inflexibility will come with consequences, so there is a real need to respond to these new implications with a structured and well considered plan.
This results in a natural tendency to rush forward with enthusiasm when a new idea is positively embraced by a global workforce – but it is always advisable to consider a patient approach and look at some possible consequences of the decision.
Pete A. Tiliakos
HR Technology & Services Research Director, Nelson Hall
If the location an employee is working remotely from is not in the same country as their employer, this can have different tax and legal consequences for both the employer and employee. The legislation around this is still in a state of flux as this is one of those scenarios where global workforce policies may not have quite caught up with the pace of change inside an organization- this is simply reflective of the exceptional circumstances that we are currently living in.
Working overseas for longer periods in a different country can result in an employee becoming resident in that country, the result of which is that they will likely become taxable in that country on their worldwide income. Residency rules vary across different countries and regions, but you can imagine that all of this may bring some unwelcome administrative burdens to global payroll and human resources teams.
Payroll taxes, company benefits, and social security issues will likely create significant compliance headaches which cause some multinational organizations to press the pause button as they seek some clarity around how easy it is to achieve all of this. This is a further indication that all of this might be something that sounds fantastic in theory but turns out to be a lot of hard work in reality. Companies would be well advised to sit down with their global payroll professionals and get their views before making any concrete decisions.
This whole concept can work reasonably well for global organizations who have established legal entities in other countries or have multiple office locations around the world. They can operate secondments in these offices, enabling them to accommodate requests for working in these countries by essentially setting those individuals up with local country contracts.
Major concerns will be raised however, with any requests from employees who wish to work in a country where their employer does not have an office or legal entity. Tax and labor law issues come into play and things can get complex very quickly.
Companies will need to pay close attention to compliance in the areas of employment, taxation, regulation, immigration and data privacy all of which impact where and how long an individual is permitted to work in a specific location. It has always been a complex area that requires strong policies but in a post-Covid world, it will be an area to watch as countries and governments will determine and define the requirements for individuals working in remote locations for an extended period.
While many multinational organizations operate with an in-house legal team, specialist employment law knowledge is needed here to make sure corporations stay on the right side of the law. No legal team wants to be operating in an environment that is vague or unclear when it comes to payroll taxes for professional services.
Post Covid, companies are looking at remote worker policies that define where work can be performed and for how long. Employment and tax agencies will be reviewing and defining requirements, so there could be some very important policy developments in this space arriving in the next 12 to 18 months.
A more positive view of this can be taken in the area of talent acquisition and management. Many global organizations constantly cite talent shortages as a major hurdle for them to overcome. If the technology supports this new working from anywhere paradigm- then multinationals can cast a wider net when it comes to their recruitment activity.
They may choose to fill positions remotely and would therefore welcome the opportunity to be able to consider candidates from wide and far- this enables them to match a role with the requisite skill sets- resulting in better suitability and less compromise. We all know the value of the right person in the right role at the right time. We may now be entering a scenario which enables the recruitment of the right person, especially if where they are located is no longer a factor in the recruitment process.
Overall, most of us can confidently predict that remote work is here to stay. Yes, legislation and regulation need to catch up and international countries need to create some common law agreements to facilitate this work from anywhere concept in the long run. The appetite is clearly there among the international workforce- who focus on the upside. Revolut has taken an early innovative step in shaping the future of work- expect many other companies to follow suit and expect many more twists and turns to come.
Using Payslip, we can manage all our payrolls across nine in-country vendors on one platform. When the global Covid-19 pandemic arose, it was not an issue from a payroll perspective, and critically getting everyone paid. The Payslip platform enabled continuity for our international payroll service including the fast and seamless implementation of the Payslip Employment Self Service during this time.
Payroll Manager, LogMeIn
Payslip as a technology platform has added a missing piece in our payroll set-up. As an international company with offices in 16 countries, it’s important to us that every employee at GetYourGuide has the same great experience when accessing their pay data.
At the same time, we work well with smaller local payroll providers, supporting us with direct local expertise in their countries. We were able to combine those two elements by placing the Payslip platform in the middle, to simplify reporting and communication with local providers, and to have one simple employee-facing solution across all locations.
Head of HR, GetYourGuide
With business and employee growth rates of above 50%, we rely on our vendors to deliver on time, every time. Payslip’s workflow automation, enables Phorest to manage our payroll provider process – data driven, real time and transparent. Payslip saves us time so we can focus on our business growth.
International Payroll Manager, Phorest