Do you know where your remote workers are doing their work? One HR leader on distributed teams and how not to fall foul of regulatory compliance

5 minute read
Remote working and distributed teams create new complexities for HR leaders, not least when it comes to compliance with tax and employment rules. Jacky Cohen, chief people officer at Topia, outlines how the global talent mobility platform firm has avoided the structural pain points that more established companies face as they shift to hybrid working – and why HR has to be willing to change

Distributed teams

The workplace is undergoing its most significant change in decades. After nearly two years of remote work employees today expect far greater flexibility in where, when and how they work, as long as they are able to successfully perform their job duties. The shift to a location agnostic approach to talent requires a shift in policies, processes and mindsets. Fundamentally, it requires organisations to become more agile, embrace digital technologies and be comfortable with empowering employees.

Accepting the fact that work is no longer tied to a specific location can create new opportunities for organisations that are quick to embrace the change. Those organisations who have been able to adopt hybrid working are better positioned than their competitors to grow their businesses and to attract and retain talent. There are also obstacles to this model, and it requires careful consideration and planning to successfully implement.

The biggest challenge to adapting to this new world of work is that HR teams now need to simultaneously support organisational growth while maintaining global compliance. The more dispersed your organisation is, the more complex this challenge becomes. This creates the potential for greater regulatory scrutiny and even fines for failure to comply with tax and employment rules.

Given such potential hurdles, it’s important to consider the role HR plays in your organisation and the value it brings to the business. At Topia we believe the starting point with any workforce policy must be people. It is why my job title is chief people officer and why I lead our people and culture team. This reflects our emphasis on the ‘human’ side of HR, rather than considering its role as operational and ‘resources’ focused. In the era of hybrid working it is critical HR becomes much more people-focused, because flexible working introduces new complexities around company culture and cohesion. Employee engagement should be integral to every talent strategy but even more so when a cross-section of your workforce is remote. This requires more focus on the emotional intelligence of your leaders and the intangibles of why someone comes to work for a particular organisation.

More than two-thirds of global respondents admitted they had not reported all days worked outside of the state or country to HR

None of this is to say that the operational side of the job is any less important. In many aspects distributed teams and remote working has made our jobs within HR more difficult. In our annual Adapt survey, we found 60% of HR professionals were confident they knew where employees were working from remotely and 78% had some level of confidence that employees were self-reporting time worked in another state or country. When employees were asked, the picture was very different. 67% of global respondents admitted they had not reported all days worked outside of the state or country to HR, even though 60% knew the rules around reporting where they work.

To ensure there isn’t such a disconnect in the operational management of HR, leaders need an integrated single view of employee data including employee footprint. Without this it is impossible to know what potential liabilities a company may face. We are well aware of the issue of permanent establishment, which has given rise to a number of start-ups focused on managing professional employer organisations. This enables companies to deploy remote employees in jurisdictions without concerns about whether they are creating permanent establishments, which could leave them liable to additional taxes.

There are also compliance issues related to knowing where your employees are at any given time. If they are not handled correctly there could be negative impacts to the business as well as staff morale and engagement. For example, UK citizens travelling to the Schengen area can only be in Europe 90 out of any 180 days including holidays. This means that if your staff are tacking vacation onto business travel, there could be consequences. There are ways to address this using working location monitoring software while also respecting data privacy. We have found that clear communication with employees is key to creating trust and transparency in how a solution like this is used.

Overcoming potential issues arising from distributed teams

We have a slight advantage at Topia when it comes to operational HR issues, as we have always had employees and teams distributed across time zones and countries. It has made it easier to avoid the structural pain points that more established companies have faced as they have shifted to hybrid working but it has shown me how far the HR function has evolved. It also helps that we are a technology company and are comfortable with being digital but we have been careful not to overlook the potential people issues that could be created with such a distributed team. For example, we have had to be very mindful of ensuring that remote employees are not isolated. We’ve shifted our former in-the-office weekly ‘FriYays’ to virtual sessions, introduced mutual mentoring, promoted volunteer days off and more to get folks to connect however possible.

A distributed company like Topia requires being comfortable with a fluid organisation in terms of structure and by ensuring the people and culture team is very attuned to the needs of the business we can evolve quickly to support the business in its growth goals. As the company has expanded we have been able to identify partners and services to introduce Topia into markets without having to go through the process of establishing an office and traditional presence in the market. It has meant the company can move much faster to respond to opportunities and fulfil the needs of employees. Knowing who is in our organisation has also been critical to the success of our virtual operations. Understanding the skills, competencies and experience around the whole team has meant we can be flexible about how we assign work. We can assess the requirements of projects, competencies required and evaluate how existing employees can contribute. Not only does this ensure we move swiftly to meet the business’ needs, it is also a way to bring together different individuals across the organisation, breaking down barriers, encouraging collaboration and ultimately building cohesion.

In this sense HR is demonstrating its value to the business while being very supportive of our people. I am very convinced the old logic of work and location is going to change beyond all recognition in the coming years. This means HR will have to be willing to change too and become even more of an advisor to the business. This will require HR professionals to fully understand the strategic role HR can play in supporting the goals of the business, while ensuring our companies have the right people programmes, processes and technologies in place as solid foundations for this hybrid way of working.

Jacky Cohen, pictured below, is the chief people officer at global talent mobility company Topia and former head of people business partners at Lyft and HR business partner at Pandora

Jacky Cohen, chief people officer at Topia

Published 15 December 2021

The biggest challenge to adapting to this new world of work is that HR teams now need to simultaneously support organisational growth while maintaining global compliance. The more dispersed your organisation is, the more complex this challenge becomes

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