This article was originally published in Spiceworks.
Employees are moving, and technology infrastructures need help to keep up. An AIRINC survey found global mobility activity has increased for 60% of companies in the last year. However, only 14% of those company leaders say they “strongly agree” that they have the right technology to meet the general administrative needs that spring out of their mobility programs. That figure must change if organizations want to avoid tax compliance and immigration headaches.
The increasing popularity of remote work has become a catalyst for advancing global expansion initiatives. As these projects push forward, business leaders are realizing they don’t have the immigration and tax services in place to protect against mobility risks.
Let's dive into the latest mobility trends, look at why they’re catching organizations off guard, and identify the technology-based solutions to help manage remote work.
Why are business leaders concerned about remote work?
The pandemic unleashed a flood of remote options on the workforce. And the latest statistics suggest remote work isn’t backing off. According to a June 2023 report from the US Bureau of Labor Statistics, 34% of employees worked outside the office at least part-time in 2022. Despite being slightly lower than pandemic highs, that figure is still more than 40% higher than pre-pandemic numbers.
Furthermore, adopting more long-term or permanent remote work arrangements may soon pick up. The Global Business Travel Association expects business travel spending to increase through 2023, surpass pre-pandemic levels in 2024, and hit $1.8 trillion by 2027. For business leaders, the combination of planned expansion and existing remote work requires extra resources they may need to put in place.
Most organizations aren’t prepared to manage the surge in remote work. According to AIRINC, only 28% of businesses use technology to track remote work requests. That’s exposing companies to a few significant risks.
1. Tax violations
Remote work creates a range of tax risks that corporations need to manage. For instance, consider the case of one US employee. In 2022, a US-based employee with Indian citizenship traveled to her home country of India to visit family while fulfilling her work responsibilities. Her manager approved when she asked to extend her stay through the end of the year.
However, by working longer in India, she exposed herself and her company to extra tax risks, including:
- Additional taxes: She and, by extension, her employer—could be on the hook for extra income tax and withholding obligations.
- Permanent establishment issues: By letting employees work in India, her company may inadvertently create a taxable corporate presence in India—and owe extra taxes there.
- Loss of benefits: She may also be ineligible for company health plans or lose other benefits while working in India.
2. Legal issues
Different countries have differing sets of labor laws and immigration standards. That means remote workers can easily break the rules or end up turned away at a border. The result could be fines, reputational damage, or even employee jail time.
3. Duty of care concerns
Employees may also find themselves working in dangerous situations. If they work in a country where political unrest erupts, or natural disasters occur, they may need more corporate support to stay safe. In turn, corporations risk ruining their reputations or facing lawsuits.
Transforming corporate risks into technology solutions
To help combat the risks of remote work, corporations need to bring together information from multiple departments. For instance, managing just one international remote employee may require input from immigration, corporate tax, payroll, HR, and more. Often, it falls on technology teams to discover a technical solution that streamlines the entire remote approval process and eliminates redundant tasks through automation.
How to identify technology that simplifies remote work management
Although there’s no perfect solution for remote work management just yet, current technology offers the potential to integrate mobility, tax, immigration, and other various global expansion services into a unified platform.
However, before developing a full-scale technical solution, it’s essential to consider a few key details. Here are a few tips to follow if you’re tasked with picking out or building technology for remote work management.
1. Update remote work policies first.
Too many businesses use technology to solve all their remote work management problems. But it’s just one piece of the puzzle. Before adopting a technology solution, the company needs to refresh its remote work policy and remote work approval processes.
Every policy will differ, but most need to spell out at least a few standard things:
- Where are employees allowed to work?
- What is the process for remote work approvals?
- How are employee locations going to be tracked?
2. Build solid vendor relationships.
Few companies will have the internal resources to manage country-by-country laws, tax obligations, immigration, and other complicated issues independently. That’s why building relationships with third-party vendors the company can trust is essential. For those responsible for developing technology solutions, the only way to build an integrated solution that combines data from various vendors is to know, understand, and communicate frequently with those third-party leaders.
3. Consolidate as much data as possible.
With companies juggling many tasks, finding a technology tool that consolidates information as much as possible is essential. If the company has to request the details from multiple sources, it will quickly eat into resources and work hours. That’s why finding a solution that streams input from various vendors into one place is essential.
4. Keep it secure.
Privacy has always been a big issue, but it’s become even more critical recently. With new data-sharing laws in the European Union and worldwide, corporations need to ensure that employee information isn’t landing in the wrong hands.
Additionally, it’s essential to ensure third-party vendors assisting with mobility tax, immigration, and other related aspects don’t inadvertently disclose sensitive data. The best technology solution will safeguard personal data while securely facilitating essential information sharing among these external vendors.
Anticipating mobility risks can prevent long-term headaches
As remote work and global expansion grow, corporations will face increasing pressure to streamline and simplify their remote work management programs. Implementing a solution that leverages expertise from third-party vendors while protecting personal data will become the responsibility of technology experts. The sooner these professionals establish and deploy this technology-driven ecosystem, the more effectively organizations can mitigate the emerging risks of our evolving work environment.
GTN is a mobility tax provider focused on providing our clients with personal attention, responsive advice, and highly experienced team members who provide actionable insights. Schedule a call with our team to learn more about how we help manage and simplify mobility programs.