A hybrid working model is not a policy, it’s a practice.

The question facing every employer right now is how to organise work going forward. Are we going to request employees back into the office, like Wall Street banks JP Morgan and Goldman Sachs did? Will we be fully remote, like early adopters GitLab and Doist have done? Or are we going for a hybrid working model? Along with Google, Facebook, Microsoft and PwC, many companies have announced such a hybrid working model because it combines the best of both worlds. 

Breaking down the hybrid working model

Hybrid working models come in many different forms. It can consist of any mandatory distribution between office presence and remote work. For example, a 40% office versus 60% remote split, or one office day required per week. However, here at WorkMotion, we would stretch the definition much further.. We consider any model that is not explicitly office-first or remote-first a hybrid working model. This means that an entirely flexible work policy – “you can work from anywhere” – should also be qualified as a hybrid working model, even though this may lead to employees working from home (or the office) 100% of their time. 

Now, this may sound strange, but it’s really not. It’s important to distinguish between policies and practices. The fact that a company decides on a certain policy does not mean that there will not be any deviations in practice. A remote-first policy generally does not forbid an office presence, so there might still be employees working from the office every day. The opposite can also be true. Although it’s unlikely that employees would be allowed to work from home every day under an office-first policy, it would generally leave at least some flexibility to work remotely. 

Dangers of hybrid working as a policy

The strategic decision to go hybrid as an employer is a policy that we do not recommend. Firstly, “it comes with a built-in imbalance”, as Darren Murph, Head of Remote at GitLab and remote work thought leader, notably said. Employees that work from home can quickly become second-class citizens in the workplace. They miss out on casual coffee chats in the office and their virtual participation during meetings simply doesn’t weigh up to the participation of those who are taking part physically. They lack visibility, which is a crucial factor in order to be valued, rewarded and promoted. 

Second, the strategic decision to go hybrid makes it difficult to leverage the opportunities with either an office-first or a remote-first policy. A remote-first policy allows employers to reduce (and adjust) their office space significantly. At the same time, it implies that the company’s benefits package is focused on the remote office. This can vary between allowances for home office drinks and supplies to providing entire workplaces at home. Precisely the opposite makes sense under an office-first policy. Employees may expect enough functional office space, and benefits are likely to include at least various options for the employees´ daily commute, for example. 

Flexible policies create opportunities

Opting for either an office-first or remote-first approach solves the two problems of a hybrid working model. Firstly, it creates a level playing field for employees, and it allows employers to grasp the opportunities that come with either model. And in practice, most employees will adopt for hybrid working on their own. Not because this is the company’s policy, but because they want to. After all, most employees will also see a hybrid working model as the best of both worlds. The end result even captures the best of three worlds — there is clarity, in-office opportunities can be leveraged, and the employees have the flexibility that they want.

At WorkMotion, we are in the business of the work of the future. Therefore, we clearly have a preference for a remote-first policy. However, we have no hard feelings for employers that don’t believe in this model. Some companies also aren’t ready for this just yet. Really, an office-first policy is justified too. Just note that, when you are considering how to organise work at your company, these are the only two options you have. A hybrid working model is not an option, it’s simply an outcome in practice.

IU builds a strong international onboarding policy

IU’s Mission & Challenges

IU (International University of Applied Sciences) has a great Learn-Tech mission and vision “Empower people with the most learner-centric education approach”  and “Everybody can access education to grow”.  The company’s direction has proved to be a success as they are the biggest private university in Germany, counting 85.000 students across the country. 

 

IU faces a twofold business challenge:

  1.  A high-growth recruitment strategy, with 33% employee growth last year
  2. A business growth strategy to expand beyond the DACH market and explore other markets. 


On the recruitment front, IU seeks two different profiles: 

  • Commercial: IT, Marketing, Sales, HR, etc. 
  • Academia: Professors, lecturers, professor assistants, tutors, etc.


IU’s key policy on hiring talent is that there should be a choice to recruit from a foreign country or the talent is allowed to work from abroad in another market for business expansion purposes. 

 

Everything is possible. We think beyond borders” 

Under the Radar

Before working with WorkMotion, IU began launching internal initiative panels and project discussions to tackle their international expansion goals A few questions the company considered, created a need that WorkGlobal and WorkDirect could fulfill. The questions raised included “What do we do to hire and onboard Professors who live abroad but work for Germany?” “Can we onboard abroad while having no entity in the desired country?” and “Can we really hire and work from anywhere? If yes, how?“

Before a solution like WorkFlex, when it came to temporarily working abroad in a compliant manner, most companies operated under the radar. There would be no official channel for such requests. Problem solved with WorkFlex

 

Real Cases Scenarios

The growth of the company must not be slowed down: IU makes it a point to hire and onboard from anywhere. This includes aross Germany and internationally. As an example, the HR team searched for an international payroll specialist for over half a year. Though they could not find anyone within Germany, they were able to in Belgium! This talent was hired and onboarded via the Employer of record model (WorkGlobal). 

If these employment solutions were not available, IU would have had to reject key candidates. 

As well, with WorkFlex, IU employees now benefit from the temporary work from abroad policy. 

Benefits 

  • IU benefits from a largely flexible hiring strategy: key positions are filled regardless of where the talent is located. Their business expansion can happen seamlessly. 
  • Employees are assured to have an official assessment to be able to work from their home country, if they don’t wish to relocate. 
  • For a potential talent candidate and current employee,the ability to temporarily work from abroad creates a great company image

 

And as Moritz says, WorkMotion “gives a wonderful liberty feeling for everyone”#Employers retention! 

How freeing is it from a company perspective to dismantle country borders to find our right talents and to expand the way we aim to? Regardless of nationalities and countries.
Besides, as an employee: knowing that I have the possibility to work from anywhere gives a solid trust base with IU.Moritz Gamon – Teamlead People Operations & Services at IU

Remote Work and Compliance: your Index

WorkMotion: Beyond Employer of Record

Introducing new permanent and temporary global talent solutions.

WorkMotion supports organisations in engaging talents all around the world. We exist by the virtue of regulatory complexity and administrative burden. In other words, if global employment was easy, our clients wouldn’t need us. 

So this is why we’re working tirelessly to bring you solutions to the problems of global hiring. WorkGlobal is our Employer of Record (EoR) solution. It allows companies to hire in more than 160 countries, providing them hassle-free access to the global talent pool. We also do a lot more. WorkMotion is not your average Employer of Record. Our ambitions go bigger and broader than streamlined international hiring and here’s how. 

Broader — go beyond your standard EoR

WorkMotions WorkDirect solution offers a direct employment option that allows clients to hire international talents on their own. Still, all of the compliance topics –  from contracts to payroll – are handled by us. 

Recently, we also added a third solution — WorkFlex. WorkFlex supports employers in their bid to allow existing employees temporary work from abroad benefits in a compliant and managed way. Temporary work from abroad, otherwise often called Workation, is an umbrella term for any employee stay abroad that is privately driven, but during which the individual continues to work. 

WorkMotion is proud to be the first provider to offer a tech-enabled solution for this “benefit beyond boundaries”. More importantly, however, we love how it characterises our ambition to broaden horizons. While WorkGlobal and WorkDirect are about permanent employment abroad, WorkFlex is about temporary work from abroad. The difference might sound marginal, but it’s not. From a compliance perspective, especially, the difference between permanent and temporary is like night and day. 

Under permanent international employment, the only entity that remains under the jurisdiction of the country of the employer is the company itself. Everything else is in the country where the employee lives and works. The labour law of that country applies, so a local employment agreement is required. Given that the employee is also taxed and socially insured in that country, a local payroll is required too. Payments also need to be made in the local currency. This is what makes hiring internationally a challenge and they’re exactly the problems WorkMotion is solving with our permanent global employment solutions — WorkGlobal and WorkDirect. 

When it comes to temporary work from abroad, the employment setup is exactly the other way around. The only entity that goes abroad is the employee. Everything else remains in the origin country. The existing employment agreement stays in force and the home country’s labour laws apply accordingly. The same goes for the payroll in the home country — both employer and the employees do not want any tax, social security or legal liability to arise in the country where the employee temporarily works from. Therefore, WorkMotion´s temporary work from abroad solutions ensure that these local liabilities indeed do not arise, or are at least mitigated as much as possible.  

This addition of WorkFlex to our portfolio is just the beginning. There are many other means of engaging other types of internationally active employees that might be at the core of WorkMotion’s next solution. Stay tuned!

The bigger picture 

As you can see, broadening WorkMotion´s horizon is a technical topic. How we think bigger, however, is more straightforward. It’s about the higher mission we are trying to achieve. Yes, we are a commercial business. However, even in the process of building a highly successful company, we also want to do what we can to change the world for the better. This has two aspects. 

Breaking down barriers

Fundamentally, WorkMotion believes that working and hiring without geographical barriers positively impacts global societies. Think of how much good it does to fill a vacancy in Germany with a remote hire from India. Filling the vacancy in the midst of a European labour shortage is great and providing employment to someone from a country with generally fewer employment opportunities is even better. 

Hiring globally also increases diversity in the workplace. Increased diversity within organisations is linked to increased creativity and improved problem solving as well as better marketing performance and increased customer satisfaction (1). Moreover, the establishment of a global talent pool is likely to greatly increase the salaries and welfare in the aforementioned less wealthy regions. This is a logical outcome of opening up the Western job market to people from different regions.

Securing the way

The second aspect is a more activist one. Global employment is still something new and new things are often hard to adopt. People, organisations and governments require time to adjust. While the pandemic fast-tracked global employment, it didn’t give us this time. As a result, we now see some bounce-back with employers requesting their employees to return to the office. However, the fact that many employees hesitate to follow this instruction, either by resigning as part of the Great Resignation (2) or communicating this, as Google employees did recently (3), shows that we have passed a point of no return. 

Besides the mental challenge, bigger challenges lay within the existing regulatory framework. The rules around labour, taxation and social security were not designed with the new reality of work in mind. This new reality of work is characterised by blurred boundaries, both between countries and between working and not working. On the contrary, regulators generally only have autonomy for one specific country. Even within the EU, tax policy is one of the few areas that has hardly been aligned, and even if it was, this would not guarantee success. 

An interesting example is the OECD´s commentary (4) on the question of whether or not a home office can constitute a so-called Permanent Establishment — a corporate tax topic. Many countries have adopted the OECD´s policies on this topic which is, as mentioned, a rather seldom phenomenon. At the same time, the policy states that home offices will “rarely be a practical issue”, and that “activities carried on at a home office will often be merely auxiliary”. We won’t bore you with the technical details but suffice by saying that these assumptions are clearly no longer accurate. 

At WorkMotion, we put all our efforts into paving the way for the future of work. As a remote company ourselves, we lead by example. Our solutions enable clients to follow this lead relatively easily but when we say our ambitions are broader and bigger, we mean it. As we speak, WorkMotion is finalising a letter to send to the OECD. In this letter, we raise awareness for these issues, as well as other related issues, and provide suggestions for solving them as soon as possible. Previously, we contacted the governments of 20 countries about the qualification of temporary remote workers for immigration purposes. So rest assured that we are on a mission to make global employment work — literally and figuratively speaking! 

 

 

Sources:

  1.  Cox, T.H. & Blake, S. (1991). Managing cultural diversity: Implications for organizational competitiveness. Academy of Management Executive, 5(3): 45-56.
  2. Dan Hughes. November 2021. Back to the Office – the great return or great resignation? Digital Marketing Institute.
  3. Daniela Molina. March 17 2022. Google Employees Unhappy with the Latest Return-to-Office Policies. Think Remote.
  4. OECD, Commentaries on the articles of the model tax convention, www.oecd.org.

The workforce of the future wants flexible work policies

The modern workforce is different to the generations before. People currently in their 20s and 30s, otherwise called the Gen Z and Millenial generations, are highly mobile, tech-savvy, socially conscious and insist on better work-life balance in a way their parents’ generation didn’t. Fast-tracked by the pandemic, these attitudes meant a radical shift in the dynamic between employee and employer during the pandemic. So why does this matter?

 

It matters because Gen Z workers are getting older. As more of them fast approach working age, combined with Millenials, they will very quickly become 50% of the workforce. As Europe continues to battle labour shortages, companies with a remote-first or a hybrid work model or those moving to a wholly digital environment are set to future-proof their recruiting capabilities. Flexible work policies represent a clear opportunity for companies to fill positions and retain staff. And this is why.

Leverage a broader talent pool

As WorkMotion Head of Trust and Employment Pieter Manden noted in his recent editorial, traditional means of combatting labour shortages are insufficient. Companies are doing themselves and their potential employees an injustice by not searching outside the geographical box. An increasing number of roles are becoming remote-friendly, and with countries like Brazil and India harbouring ca. 3 million unemployed people with a Bachelor’s Degree, remote-first policies represent an enormous opportunity for finding great talent without the hassles of relocation. 

Improve recruitment opportunities

As for employment packages, workplace flexibility will go a long way to securing that perfect fit. A 2022 WorkMonitor study by Randstad found that 41% of Millenials and 40% of Gen Z workers would not accept a job if it did not provide workplace flexibility (remote work opportunities). It should go without saying that leaning into remote-first structures will make filling those critical roles much easier and relieve the heavy recruitment burden on HR teams. 

While there aren’t any stats on it yet, we also think that once you factor in Temporary Work from Abroad policies, you’re fast becoming an employer of choice, especially among younger employees.

Increase employee retention 

The future workforce like flexibility. Millennial and Gen Z workers are far more likely to leave their job, and they do. 41% of Gen Z workers have quit a job because it didn’t fit into their personal life. The study went on to show that of both Millenial and Gen Z, 36% and 34%, respectively, had quit a job because it did not provide enough flexibility. A separate Future of Work 2022 study by Buffer declared that, in all age groups, a whopping 97% of workers would like to maintain at least part-time remote work for the rest of their careers. 

Millenials and Gen Z who quit their job because it didn't provide enough flexibility

Increased diversity

Flexible and remote work policies invite underrepresented people into the workforce. Mothers, in particular, are better able to handle the shared responsibilities of work and child-rearing. According to a Future Forums survey, women with children said that the number one benefit of a flexible schedule isbeing better able to take care of personal or family obligations during the day”. The Buffer survey went on to show that 76% of working parents pursued remote roles due to their situation. 

The survey went on to say that flexible work benefits BIPOC communities too. For example, 68% of Black workers want flexible work policies, compared to 56% of their white counterparts, citing a better sense of belonging. 

People living with a disability, who are otherwise restricted by either accessibility, mobility or inclusion, are also far more likely to enter the workforce when remote work is an option. In fact, 44% of those living with a chronic disability sought remote-first roles due to their situation.

And with improved diversity in the workplace, we have better commercial outcomes too. Increased diversity invites diverse thinking which, in turn, has an overwhelmingly positive effect on decision making,  innovation, profitability and employee engagement. It’s a win-win. 


WorkMotion

Ready to take the next step? WorkMotion specialise in all things remote work and global hiring. If you’d like to leverage the benefits of remote-first employment or build a global team, contact one of our specialists today.

Contact Us Today 

Restrictions are lifting. Time to future-proof your work policies

As of March 20, the German government lifted the mandate requiring employers to allow their employees to work from home. As the COVID situation steadies, this aligns with a global push to get people back to the office. Now, while we don’t expect people to be rushing back to their offices right away, it does imply a significant switch back to, literally, business as usual. Or does it? We’re here to answer the questions, what does the future of working from home look like now, and how best can companies adjust after two years of home office?

What is the current situation?

Countries are slowly but surely relaxing workplace COVID restrictions. While this indicates a welcome return to pre-2020 life, there are lots of things companies must consider. Certainly, companies are faced with the question: well, what now? 

Some companies, like Goldman Sachs, took a hard-nosed approach, ordering everyone back to the office with embarrassing results. Others are left considering their options. After all, let’s not disregard all that we’ve learned in the last two years. 

How does the future of work look?

First of all, remote work works. With companies experiencing increased levels of productivity and happier employers, resulting in reduced turnover, flexible working isn’t just enjoyed by employees, it’s good business. And yes, employees do love it. So much so a recent Buffer survey indicated a whopping 95% of employees ​​wish to keep a remote or hybrid work policy. 

With stats like that, it’s highly unlikely employees will be forced back into the office, and we definitely advise against that kind of thinking. The fight for talent in Europe is already grossly competitive, and companies run a real risk of losing this battle if they’re unwilling to be flexible. 

Instead, it’s well past time companies looked at future-proofing their permanent work policies. It’s now time to look at what has (or hasn’t) worked for your business and what your work policy should look like moving forward. But don’t worry, there are solutions, and your employees are far more likely to flourish once the upfront admin is out of the way.

 

Hybrid work model 

The way forward is a hybrid work model. It allows working from home while also maintaining an office presence, and it’s popular. So much so German Labour Minister Hubertus Hei has proposed a permanent right to work from home bill. Now, the idea was met with criticism, however, its sheer mention indicates just how important flexible working is for companies and their employees.

Benefits

First of all, it helps maintain a robust team culture and provides an opportunity for workplace connection. Employees also retain the freedom and flexibility they so enjoy. 

Companies can also look to downsize their office space, potentially saving them enormous amounts on rent and utilities.

Our summary for implementing a hybrid work model

  • Set clear policies and processes: By setting firm rules around flexibility, you’re less likely to be taken advantage of and can avoid confusion in the implementation of the policy. 
  • Consider the legalities: It could constitute a formal change in employment conditions, and current COVID contingency allowances will cease to apply.
  • Ensure you have the right tools: The right technology (both hardware and software), training programmes, planning tools, educational content, and online resources are all things you need to consider to be successful. 

What about relocating talent?

Another welcome advantage to reaching the tail end of the pandemic (we hope!) is that will make relocating talent easier now that borders are opening. Remote work enabled a significant portion of the workforce to return home or stay in their home countries while things remained uncertain. Now that borders are opening up, companies can start the process of relocation. 

Wrap up

While it might feel like there is a lot of upfront investment in developing a robust, flexible work model, the good thing is that we’ve had two years to prepare. It’s very likely your policy is already halfway there.

 

WorkMotion

Here at WorkMotion, we specialise in flexible work solutions. We’ve dedicated our day jobs to providing tools to promote fully compliant and straightforward global hiring and for future-proofing your flexible work policies.

WorkMotion and Personio announce integration for global remote employee management

The partnership allows Personio customers to scale internationally by easily hiring and managing remote employees in over 160 countries while staying compliant with local tax, vacation and employee benefit requirements.

 

22nd March, 2022:

Following a $24 million funding round, WorkMotion, the global Talent Operating System for employee management and compliance, has announced a key API integration with Personio, Europe’s leading HR software company for small and mid-sized organisations. The integration enables Personio users to manage remote employees easily and compliantly in over 160 countries, with simpler and more efficient data processing.

With the shift to hybrid or remote ‘work-from-anywhere’, great candidates increasingly may reside in locations other than where companies can legally employ them. WorkMotion enables Personio  customers to access, hire and manage top talent based anywhere. Along with the flexibility to recruit and manage talent in new geographies, WorkMotion minimises compliance risks through its in-depth understanding of local employment laws.

Bastian Eichler, VP Product at WorkMotion, comments: “We are delighted to be partnering with Personio, one of the most innovative and technologically advanced companies in the HR sector. The integration gives all Personio customers the ability to seamlessly and compliantly manage talent based anywhere in the world.”

Hugues Vincent, Head of Product Partnerships at Personio, comments: “We are very pleased to be integrating the Personio platform with WorkMotion to give our users access to global employee management, a feature that is set to become a fundamental part of companies’ offerings going forward. Being able to automate employee management around the world is a key objective for HR departments and doing so ensures they are on track when it comes to global onboarding.” 

With many employers adopting a ‘work-from-anywhere’ approach, there is a new urgency for companies to modernise their internal HR processes and ensure they can accommodate these changes efficiently. The partnership between WorkMotion and Personio marks a big step in facilitating cross-border employment opportunities for the global workforce.

There is no labour shortage, we’ve just been looking in the wrong places.  

The number of job vacancies in Europe is at an all time high. Eurostat data shows that in Belgium and the Netherlands, there are currently 200.000 and 400.000 job vacancies, respectively. According to Statista, the number of job vacancies in the United Kingdom reached a record high of almost 1,3 million in January 2022, around 690.000 more vacancies compared to January 2021. Given these numbers, it’s not surprising that many employers complain about labour shortages. A Boston Consulting Group study shows that Germany’s labour shortage alone currently amounts to some 2 million workers, and it warns that this is likely to grow to a mindblowing 5,8 to 7,7 million people in 2030

 

Traditional means of addressing labour shortages are insufficient

Given that only 400.000 jobs have been lost in Europe due to automation since 2000, a comparatively small number when you consider the current vacancies, job automation will not solve the labour shortage. The same applies for worker migration. Germany’s head of the Federal Agency for Labour, Detlef Scheele, says that Germany requires 400.000 immigrants annually to close the gap. This is significantly and somewhat unrealistically higher than current numbers. 

Upskilling is another traditional means for addressing labour shortages. However, current labour shortages are being felt across all skill or education levels, meaning upskilling only moves the problem, not solve it. At the very least, a combination of job automation, worker migration and upskilling is required to address this complicated and widespread issue. 

 

We should be looking at other options to address labour shortages.

There is another option and it could make a real difference — expand to a global talent pool by hiring remotely. The unfortunate paradox of all of this is, global unemployment is also high and the issue exists close to home.. World Bank data shows that unemployment rates in Spain, Italy, Greece and Turkey are closing in on or well above 10%. This means ca. 9 million people, and many of them young, are without work. Youth unemployment in these countries is 25% to 30% for people aged 20 to 24, and 20% to 25% for people aged 25 to 30. As alarming as these numbers may be, they represent an opportunity for remote success. Young  people are more likely to be digitally native and they’re in the same or an easily managed time zone. 

While, indeed, not all of them will have the required skill-sets for vacant roles, let’s be honest— does any new starter? My first year at PwC, after graduating law school, all I did was wonder about the disconnect between what I had learnt and how this was put in practice in my new role. Putting in time and effort to ensure starters learn on-the-job does have a great upside, though. Employers who invest in training staff will benefit from the outputs for decades to come. 

The beauty of hiring remotely is that it’s not limited to a location. BICS countries,Brazil, India, China and South Africa,have no less than 50 million unemployed people. Anyone saying that the vast majority of this unemployed population is not likely to match many of the profiles needed, is probably right. However, every position filled counts, and employing only a fraction of this population would already have a significant impact on the labour shortage. 

This thought is not entirely unrealistic, knowing that Brazil and India together count more than 3 million unemployed people aged 25 to 29, who have completed at least a Bachelor’s degree. And each year, ca. 5 million STEM graduates finish college in India, China and Brazil. To put things in perspective, this is 16  times the number in the UK and Germany, who have 300.000 annual STEM graduates combined!  Since these skills are in high demand and can often be done remotely, it goes without saying that this subset of unemployed people represent an even bigger opportunity for remote success. 

Hiring remotely from the global talent pool does not only fill that role. It also includes what I would call two “multiplier effects”, meaning that with each vacancy filled the pressure of the labour shortage decreases by more than a factor one. 

  1. Best person for the job. It makes a difference if employers can source from a national or regional population only, or from the global talent pool. Companies are more likely to find staff better suited to the role from within a larger talent pool. This increases productivity and decreases the number of open positions. 
  2. Increased participation. Both in a national and international setup, remote work is expected to increase labour participation. According to LinkedIn research, women are 26% more likely to apply for remote jobs than men. Some of these women may not have been interested in non-remote jobs before, and the possibility to work remotely adds them to the working population. This would be a great development, first of all, because female participation rates in European countries are more than 10% below male participation. Secondly, on average, European women are more educated than men, increasing the potential for the benefits described in point one.. Of course, the increased participation does not only apply to women.Because of the flexibility and part-time potential remote work offers, an additional opportunity may present for everyone who is currently excluded from the workforce. 

Before COVID made us realise that remote work works, we were – literally and figuratively speaking – looking in the wrong places. National and regional labour supply has proven insufficient to cover demandand while job automation, worker migration and upskilling may be important tools, their impact has not been enough to close the gap. This gap is growing and will continue to grow as the Baby Boomers reach retirement. Hiring remotely from the global talent pool may be a truly defining factor and for the employers willing to broaden their strategies, there might not even be a labour shortage at all. 

Establish a new entity, EoR or Direct Employment. What’s best for you?

It’s becoming increasingly common for companies to look abroad to fill key roles. While this broadens the pool of people and represents significant opportunities for both employees and employers alike, it’s not without concern for the legal ramifications of cross-border employment. So, how do employers maintain the benefits of international hiring without breaking the rules?

Legal Entity 

There are a few options but the obvious one is to set up a legal entity. A legal entity offers you and your employees the same hiring conditions and almost all but removes the legal and tax compliance risks. Clients enter into a contract and still maintain full authority over recruitment, hiring and onboarding as well as management of that employee. 

 

But there’s a catch. Setting up a legal entity is expensive. Navigating local employment labour and tax laws alone can prove very costly for legal and HR teams, both in time and money. It’s likely they will have to work with local tax and finance lawyers, and with average hourly rates for attorneys ranging between €100 and 300 per hour, those amounts start to add up pretty quickly. Then there are start-up capital amounts which can range from anywhere between zero to tens of thousands of euros.

 

In Germany for example, a registration fee of €400 is required, along with €25,000 in start-up capital. The UK have start-up capital requirements of £50,000 (approximately €60,000). Other places are much lower, however —  Poland is as low as €1,200 while Spain this amount is €3,000. In Portugal, for example, it’s free if you’re a Freelancer or ‘Solopreneur’ but the number is harder to ascertain for limited companies, further highlighting the legal, financial and administrative burdens starting a legal entity can bring. 

 

Appointing a local director, opening a local bank account and setting up payroll are also things that need to be considered. Both corporate and employee tax obligations must also be met. So, certainly, a legal entity has traditionally been a way for companies to expand, however it does not represent a viable solution every time an international candidate doesn’t wish to relocate. 

Employer of Record

The other option is using an Employer of Record (EoR). An EoR is a third party company that specialises in understanding the laws of the other country and who act on behalf of the client. An EoR does not recruit but manages the process of onboarding, ensuring full legal compliance. As experts in the local country, they provide a framework that both the employer and employee work within which doesn’t break any rules. 

 

Third-party involvement, however, can make some clients nervous. However, EoR solutions offer the same legal framework as a legal entity without all the hidden and upfront costs. 

Take our TIS case study, for example. In establishing an EoR using our WorkGlobal solution, a rapidly growing tech company were not only able to access specialised talent from a wider pool of candidates, they streamlined the entire onboarding process minus any legal and tax compliance risks.

 

EoR works for businesses looking to truly go global. WorkGlobal simplifies testing local markets and accessing international talent.

Learn more about WorkGlobal

Direct Employment

Another tool for the quest of cross-border hiring is Direct Employment. Direct Employment directly establishes a local presence in the form of a foreign company, not a legal entity. It differs from EoR in that there is no third party involved in onboarding. While initial start-up can take up to six weeks, once the registration is complete companies can continue hiring from that country very quickly at a lower cost than an EoR. EoR solutions operate on an individual basis.

 

There are distinct advantages to Direct Employment. First of all, you establish a direct relationship with your employees and it enables you to offer stock options as part of their employment package since you’re hiring them on your own employment contracts. Unlike establishing a legal entity, companies are able to employ numerous employees with far less commitment.

 

Direct Employer is only suitable if your international recruitment plans are limited and specific, not for true global expansion. 

 

Learn more about WorkDirect

Summary

As employers find themselves scrambling for ways to secure teams from across the globe, it’s useful to have options. When testing out international opportunities, fewer start-up costs and reduced risk makes better business sense. WorkMotion products are designed to help companies get the most out of these opportunities and provide flexibility in the workplace.

 

Contact us

Temporary work from abroad: How Enpal found a simple solution to a complex problem

Enpal, is a B2C solar panels installation company group, headquartered in Berlin which encounters multiple HR challenges, so they are quite interested in finding solutions to lighten their workload and processes while being ensured to stay fully compliant. In short: they need simplicity wherever they can get it! 



60 nationalities 

1500 Enpalers among them roughly 400 blue collar 

 

Context

Flexible work is a complex legal matter. Sure, from an employee perspective, working from abroad seems simple: a computer and internet are enough to do the job! The other (HR)-side though, is more complex and does involve a lot of legal background to solve the new way of working. Companies across the globe are facing an iceberg when it comes to this topic, and so is Enpal. Most importantly, the group wanted to stay competitive in the employee benefits they provide but also not go wild and be later surprised by unpleasant tax revelation. 

 

Challenge

Now with the pandemic happening, employees revealed their need to work from their home countries for a longer time or find the possibility to work elsewhere. In fact, a modern problem for a modern company policy. Once introducing their new mobile work policy and opening up the possibility to work some time from abroad, especially before Christmas time, Enpal received more and more requests from their employees. Without any previous legal knowledge on this matter, the HR department had to get in touch with tax and labor lawyers: they needed the legal and compliance knowledge to be able to provide the needed flexibility. 

Process

Before using WorkFlex, Enpal consulted labor tax lawyers to get a general understanding on possibilities to temporarily work from abroad. Employees had to submit a request via a pdf form, which would then be reviewed manually: a quite complex and highly time-consuming process.
Enpal has now the roots to set a strong work policy in place and employees can easily request to work from abroad. An automatic risk assessment and application for social security certificates ensures a limited exposure to compliance risks. The process is efficient, transparent and easy-to-use for all company stakeholders.

Benefits

  • Time saving
  • Cost efficient in comparison to heavy tax lawyers services’ costs
  • Strong employee benefit
  • Lever to set the first stone to create a company-wide WfA company policy


Before the pandemic, we didn’t even think about this working from abroad, flexibility level. It was quite a challenge to handle all sudden work from abroad requests. With WorkFlex we can now offer our employees the possibility to request work from abroad through easy-to-use software. Now I can confidently say that we are a well-positioned company when it comes to work from abroad.Sophie Kostka Head of HR Operations & Culture

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