By Virginia Magliulo, Executive Vice President of ADP International
For many workers, the days of relentlessly commuting to the workplace every day are long gone. The past five years have seen an explosion in remote and hybrid working, meaning that in some industries and job roles, people can live far away from where their employers are based – sometimes in another country - and even become “digital nomads” who work while travelling the world.
As a result, today’s workforce is more geographically dispersed than ever before. Our research shows that almost a third (31%) of the workforce is working remotely, up from less than a quarter (23%) at the start of this decade. While some employers are keen to get everyone back on-premises full-time, others are embracing more flexible arrangements which offer many advantages – though there are significant challenges to overcome too.
Seizing the benefits
The advent of technologies that facilitate virtual collaboration between colleagues and customers, such as video conferencing and cloud computing, have made it easier for organisations to expand across borders and accommodate a geographically diverse workforce. The benefits cut both ways.
Employers can recruit from a far broader talent pool, increasing the chances of finding candidates that fit the specific requirements of a role. Meanwhile, a more expansive universe of opportunity opens up for those individuals, enabling them to earn a good wage in areas with a lower cost of living and potentially lower travel costs.
The option to work flexibly is an important criteria on many workers’ wish lists, and for some people it could be a deal-breaker. Younger generations, especially Millennials and Gen Z, rank work-life balance as a top priority when choosing an employer. So, employers that offer remote or hybrid working options may be more attractive to new recruits as well as to existing employees, improving retention rates of skilled and valued staff, and boosting engagement and loyalty.
Whether remote workers are more or less productive than their workplace-based colleagues is a contentious issue, and one that must be carefully managed. However, if remote and hybrid working contributes to job satisfaction and overall happiness, then that should create positive outcomes for all concerned: an Oxford University study found that happy workers are 13% more productive.
Avoiding the pitfalls
However, having workers scattered across different geographies also creates complexity and exposes pitfalls for employers. Managing staff and encouraging collaboration among teams tends to be easier in person, as managers are better-placed to keep an eye on progress and internal dynamics, discuss issues informally with colleagues and spot when problems are arising, while teams often feel more empowered to strategise and problem-solve if they are in the same room.
Similarly, workers who never go into the workplace may feel less visible. Younger people may miss out on the chance to learn from their more experienced colleagues, while parents who balance work and childcare may worry that they are viewed as less “present” at work. Working remotely could also cause some people to feel they have to be ‘always on’. The lack of separation between work and home lead to them working longer hours, making themselves available in the evenings or at weekends, putting them at risk of higher stress and anxiety, and (ironically) undermining their work-life balance.
In addition, there can be cultural differences and time zones to reconcile when team members are based in multiple regions – as well as a myriad of legal issues and requirements to navigate, from data protection and privacy regulations to various employment and taxation laws. Complying with everything, everywhere, is an extremely difficult task, especially when rules can vary even across different regions within one country and as they change over time. If hybrid workers cross borders as they travel between home and the workplace, or when digital nomads move around from one location to another, this extra mobility makes the situation even more complicated.
Maintaining compliance and fostering inclusion
To address these challenges, it’s vital to consider how to manage the impact on your business, foster a sense of inclusion for remote and hybrid workers, understand the changing profile of your workforce and keep up with the rapidly-evolving global patchwork of regulations with which you may have to comply.
For example, create a cohesive company culture by making sure people feel part of the team, even if they are often working remotely. It’s a good idea to ensure that new recruits receive their onboarding on-premises, so that they meet their colleagues in person and form those vital connections that will allow them to work well together. Put regular “team days” in the diary to co-ordinate hybrid workers’ in-office days so that they don’t miss out on interacting with other team members and managers, or even hold occasional get-togethers off-site. And organise social events to allow people to get to know each other, such as celebrating successes together.
Furthermore, implement policies that set out the company’s expectations and parameters for remote and hybrid working. Educate managers about the issues that could arise and train them to manage from afar. And benchmark the business against other companies of a similar size, or in the same industry, region or around the world, based on the most up-to-date, powerful data analytics, to support robust decision-making, policy development and performance measurement.
In addition, establish clear communications channels so that staff can inform the right people about any location changes in real time, so you always know where they are based, because this could affect which legal and regulatory obligations apply. Think carefully about how to ensure fairness and regulatory compliance across areas such as pay, taxation, data privacy, and other HR and employment issues including equality of opportunity and access to benefits like private healthcare or paid leave – in every relevant jurisdiction. One way to do so is to consider partnering with a specialist in payroll, HR and compliance that will help you navigate this uncertain terrain with confidence.
When choosing the right support, look for reputable partners that have extensive experience and long-standing credibility – and crucially, that combine global reach with local expertise. That way, they will be able to guide you through regional nuances, while still seeing the bigger, international picture - “connecting the dots” with a comprehensive approach. Plus, they will be ready to help you take on new challenges as you grow and expand into new areas.
Running a business with a dispersed workforce is now a reality for many employers, and while the pros and cons of remote working are still being hotly debated, there’s little chance of reversing this trend. Large swathes of workers are reluctant to give up the freedom to work from home (or elsewhere) at least part of the week, and many companies are seeing real benefits from allowing them to do so. Employers just need to tread carefully when it comes to the logistics to ensure that they are providing the right support to the workforce, fully engaging their talent and preventing any gaps in compliance.
Sources:
1. ADP Research, Today at Work: Remote work hits home, 2024
2. Deloitte, 2024 Gen Z and Millennial Survey, 2024
3. Harvard Business Review citing research by Oxford University https://hbr.org/2023/10/creating-a-happier-workplace-is-possible-and-worth-it