International commuters: getting ahead of employees’ lifestyle changes

29 August 2017

Imagine spending your spare time in a chalet in France; skiing in the winter, day trips to the South coast with your family (who love the outdoor lifestyle), a glass of wine in the warm setting sun, views over the mountains….

Then imagine a one hour 30 min commute to work in London perhaps working from home once a week - maybe you live nearer your client; perhaps you’re trying to break a new market, or your employer is reducing their costs and you are encouraged to work at home.

The first sounds idyllic, the second a work/life balance consideration. Unrealistic to join the two together, an employer might think?

But with the following key societal changes and business drivers, it is a very reasonable possibility:

With changing views on work/life balance, increasing demand for flexible and virtual working, and the ease of travel and business communications, employees are considering their options and where ‘best’ to base themselves and their families - which might just involve working from home, in another country.

Also, Brexit is meaning that organisations are committing to moving business operations to new countries, with jobs moving accordingly.  Employees could fully embrace the move, point blank refuse the move, or they could be somewhere in the middle; work in the new country and live in their current country, or indeed work virtually from a different country.  For that all-important ‘1%’ of the employee population who drive significant value, an organisation will need to make something work.

Many employees are already on board and embracing these changes to their working life – the ‘sell’ does itself – and frankly not much can stop them. I believe that with Brexit, flexible working, business cost management and operating model changes, coupled with the ease of travel, the number of employees commuting across international borders is set to increase dramatically over the next few years.

Actually, organisations which can facilitate and embrace their employees’ willingness to commute across international borders or work virtually can transform their local talent pool to a global talent pool.

It’s clear to me however, from many ‘after the event’ conversations with organisations, that they frequently don’t get this right.  They don’t know which country employees’ homes and families are in, but why would they – it’s their employees’ personal life, isn’t it ?  If they are aware of employees who are commuting internationally they may try to discourage, prohibit or even ignore it, as well as the consequences….

Commuting across international borders or working from home in a different country creates tax, immigration, social security, legal and governance considerations for an organisation. The knock-on costs and risks can be significant if they are not managed.

Do the flexible working sign-off processes ask the right questions? Are the right people aware to consider the Permanent Establishment risk and corporate consequences? Do the employees realise that they are putting their family’s ability to go to the doctor at risk by not paying social security in the right country? Are there suitable corporate policies and benefits in place? Who pays for their commuting costs ?  What level of productivity do you get from these employees?

Getting ahead of and embracing employees’ lifestyle decisions will mean an organisation can benefit from greater workforce flexibility and agility.  There’s also advantage to be taken from being first to the employment market with a fantastic, flexible employment package.  But an organisation needs to be prepared – speak to your PwC contact to understand the workforce opportunities, potential challenges, and our solutions to ready your organisation to beat the international commute.

Clare Coley
Office: +44 (0) 207 804 1684
Email: clare.r.coley@pwc.com

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