Over the past year, many employers have found themselves managing a global workforce for the first time. For example, some staff who were originally from the EU may have decided to return to their home country ahead of the first national lockdown and have been there ever since.
This issue has since been exacerbated by new Brexit-related business immigration rules which came into force at the end of 2020. In other cases, the prevalence of remote working during the pandemic has opened up new possibilities for businesses to recruit from a global talent pool for the first time, without necessarily needing to bring workers to the UK. Allowing existing workers greater flexibility over where they choose to work has also become commonplace.
These unique circumstances, combined with the need for businesses to transfer many areas of their operations online, have led employers to rethink their operating model and demonstrate greater agility and flexibility than ever before.
In particular, while more business leaders will be considering how to take advantage of the benefits of a global workforce, there are a number of important issues they should bear in mind.
For businesses recruiting overseas workers who will remain in their own country, compliance with local employment regulations is key and may involve additional costs that will need to be factored in.
HR managers should consider how employee entitlements such as sick pay, holiday and termination allowances might differ from those in the UK. Also, advice should be sought on the various risks and obligations related to employment tax and social security matters of having workers permanently based overseas.
In most locations, employers have to register for wage tax and social security withholding purposes. Care should be taken to identify any wider tax implications for the employer such as the risk of inadvertently creating a Permanent Establishment of the company in the overseas jurisdiction. As a result of Brexit, a UK company needs to check if it has the right to establish itself in the relevant sector/market in the EU country of choice, before hiring workers.
For employers wishing to relocate their employees from other jurisdictions to the UK, right-to-work documents and visas may be required. In particular, for employees relocating from the EU, Brexit has meant that a visa is now required to come to work in the UK, and this must be considered at an early stage in the recruitment process.
Once an employee’s global location has been decided, HR managers should turn their attention towards ensuring that their working environment is fit for purpose. This undoubtedly becomes more challenging when staff are geographically spread and working remotely from their own homes.
To overcome this hurdle, businesses should consider putting policies and procedures in place to assist employees in risk assessing their working environment and ensure that their needs are met. Policies should also be adapted to address data protection security implications.
The next challenge is how to engage and motivate a workforce that is geographically spread, while creating a single, unified company culture. To achieve this, HR managers and leadership teams will need to find innovative ways of connecting their global team.
There is now an array of digital technologies available to businesses that provide a platform for remote working. As well as facilitating team working, these technologies can be used as motivational tools, creating opportunities for leaders to communicate about the direction of the business and cultivating a positive working environment. Ensuring remote workers still have a clear channel for raising concerns is also important.
When recruiting people from diverse cultural backgrounds, some of whom may be living and working overseas, differences may come to light when they begin working together. From an HR perspective, it is important that policies are in place to ensure that workers know what is expected of them and understand that communication must always be clear and considered.
Investing in employee diversity training and ensuring that the business embraces cultural differences are key to creating a supportive and inclusive workforce where individuals can thrive.
As we slowly emerge from the pandemic, global mobility will open valuable opportunities for recruiters and HR managers, enabling them to hire talented people from a much larger employment pool.
Although more planning and consideration is often required when recruiting from overseas, it can deliver tangible business benefits by enriching the skills base and creating a diverse and inclusive culture.
By considering legal requirements, making the most of the digital technologies and promoting effective employee communication, HR managers and employers can overcome the challenges involved in managing a global workforce and build a stronger, more diverse business.
Ed Hussey is a people solutions director and Sanjukta Ray is an employment tax solutions global mobility manager at Menzies LLP