How to manage a globally distributed workforce
Work-from-anywhere policies have enabled firms to recruit the most talented people, wherever in the world they’re based. But getting the best from these remote workers is a whole different challenge
The world of employment has rarely seen such tumult over such a short period. The pandemic has upended the job market and forced employers to adopt practices that many would have dismissed out of hand before 2020 – particularly remote working.
For some, that has meant adopting a hybrid approach, allowing employees to work a day or two at home each week. For others, it’s been a far more profound shift.
Companies that have embraced a fully remote model have expanded the pool of talent available to them, competing for candidates who may not be based in the same country as their employer, let alone within a commutable radius of head office.
The emergence of the work-from-anywhere policy has attracted great interest among white-collar workers who were freed from their daily commutes during the Covid lockdowns. The number of so-called digital nomads – people working remotely while travelling – more than doubled from 7.3 million in the US before the Covid crisis to 15.5 million in 2021, according to research by HR software specialist MBO Partners.
If your organisation has decided that building a distributed workforce that spans several time zones is worthwhile, it’s clearly not just a case of ensuring that everyone has a stable internet connection. There are several hurdles to overcome in assembling a global dream team and running it smoothly, although these are far from insurmountable.
“British enterprises that employ people who live and work overseas must consider a raft of potential non-UK obligations,” says Lee McIntyre-Hamilton, tax partner at Keystone Law.
He calls this “an employer compliance minefield”, largely because there’s no one-size-fits-all solution. Regulations applying to pay, benefits and taxation will differ from country to country. The more distributed your team is, the more complex the situation is likely to be.
McIntyre-Hamilton points to Canada and India, where foreign firms must register with the tax authorities and operate a payroll in those countries. “This applies irrespective of whether the UK employer has a corporate presence there,” he says.
You might think that regulatory compliance should be less of a challenge if your workers are living in the EU. Not so, he says. British employers hiring residents of any EU member state must register to operate a payroll in that country – including paying social security contributions.
“This can come as a shock to UK firms that expect to pay national insurance but then find that they’re required to make substantially higher social security contributions in countries such as France,” McIntyre-Hamilton says.
And it’s not only the taxman you need to keep onside in each jurisdiction. “There are also immigration considerations. For instance, does your employee have the right to live and work in the country in question?”
He adds that it’s possible for workers to inherit employment rights in their country of residence that could be different from, or even contradictory to, those they would have in the UK.
For Jessica Nordlander, a former Google employee and chief operating officer of Canadian tech company ThoughtExchange, the prime consideration for business leaders should be how to establish a digital working environment that’s as effective as it possibly can be.
“The reason why so many companies are struggling with this is that the people responsible for designing our digital workplaces aren’t the same people who designed our physical workplaces,” she argues.
ThoughtExchange is a fully remote organisation. As such, it’s worked particularly hard to create a digital workplace in which all employees can thrive. For instance, the company has decided to limit the number of software packages it uses to reduce the risk of tech fatigue among staff. Nordlander suggests that other firms would do well to follow suit.
“The reality is that the working world is becoming increasingly remote and hybrid. More and more organisations are going to look like this.”
That’s the view of Brian Kropp, chief of HR research at Gartner. He believes that companies should plan to have between 20% and 25% of employees fully remote, between 55% and 60% working on a hybrid basis and the remaining 15% to 25% purely office-based.
Such a mix creates a lot more for HR teams to do in addressing these employees’ varying requirements, notes Kropp, who adds: “HR executives will have to address the question: ‘How do I make this workforce work?’”
Being more proactive in every element of HR management is vital, he stresses. Positive interventions can range from checking in regularly with remote workers to ensure that all is well when they’re out of sight (but not out of mind) to stimulating conversations that people will engage in outside the confines of their work.
For that reason, Kropp suggests allocating some of the money saved on office space to funding occasional face-to-face meetings at HQ, including the cost of flying employees in from abroad.
“One or two days every six months is more than enough in-person interaction to build those social connections,” he says.
Many people believe that a globally distributed workforce, contactable only through digital means, cannot possibly form a cohesive organisational culture. That simply isn’t true, according to Nordlander.
“It frustrates me when I hear the argument that it’s impossible to collaborate and build a culture in digital environments,” she says. “If you were to ask any gamer, I’m pretty sure that they’d say that it’s possible to work really well with people across the world whom you’ve never met.”
Nordlander adds that sceptics have taken her to task at conferences where she has extolled the virtues of a globally distributed workforce. They ask about how her approach to working can help graduates fresh out of university to develop the interpersonal skills that will be crucial in their careers.
This can be achieved through a mentoring scheme in which each new recruit is paired with a compatible experienced employee whom they will meet regularly online.
“The employer must take a much bigger responsibility for facilitating those social interactions, compared with what happens in a physical environment,” Nordlander says.
Dan Hughes is director of international research and development at Talogy, a provider of HR services. He stresses the importance of finding “a variety of ways to transmit your culture and values to all employees, regardless of their work arrangement or location. When thinking about your culture, consider how to implement this across all settings and include every employee. For example, if you’re trying to develop a more innovative culture, don’t simply create a ‘brainstorming room’ in your head office and then call it a day. Find a solution that will engage distributed workers as well.”
That approach needs to be led from the top of the organisation, Hughes says. “Many leaders will need to adapt to having a more distributed workforce, adjusting their leadership style and ways of communicating accordingly.”
He adds that managers must beware of the risks of proximity bias, whereby they favour employees who are physically close to them over those working remotely.