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Why virtual international assignments are expected to stay post-pandemic

Ema Boccagni - for ECA

The global pandemic has forced the widespread adoption of remote working around the world, meaning companies have naturally seen a reduction in employees travelling and relocating overseas over the last year.

It is expected that it could take up to two years for international assignment numbers to return to pre-pandemic levels, and businesses are remaining cautious in the immediate short-term. Travel restrictions and a need to cut back on costs has caused firms to make adjustments for international growth and activity, of which virtual assignments has played a significant part in.

A survey* has analysed how firms have adapted throughout the pandemic, as well as how this experience is expected to affect the nature of future international assignments. Currently, over a quarter (27%) of companies have virtual assignees and a further 6% are planning to in the near future.

Of the businesses that have already adopted virtual assignments, 71% expect numbers to increase over 2021. In an additional survey pre-pandemic, only 5% of businesses had a policy in place for managing virtual assignments. This has multiplied over eight times as 42% now either have, or plan to introduce one.

It remains to be seen whether the pandemic will have a lasting effect on employees’ desire to physically relocate, however, there are many considerations when arranging and managing virtual assignments:

Tax and compliance
Offering virtual assignments instead of relocation may appear simpler but could also cause new issues. Employment laws such as minimum wage, pension and healthcare rules could make an assignment more complicated and costly, while companies will be responsible for varying tax liabilities and any compliance breaches – even if these issues are the result of choices made by employees.

As employment income is taxable in the country where the employment is exercised, virtual assignments poses questions around where the employee resides and where the work is performed.

Is it a practical solution?
It is worth noting that virtual assignments may not be suited to certain industries or sectors. Businesses such as manufacturing and construction mostly require a physical presence to carry out a job, so arranging a virtual assignment may create more obstacles than solutions.

However, 59% of businesses surveyed by ECA who have or plan to have virtual assignments say they will continue to use them once the effects of the pandemic subside, suggesting its impact may be long-term.

Working across time zones
The pandemic has proven to many companies that staff can work from anywhere around the world with the right internet connection. However there are challenges to bear in mind. Will employees on virtual assignments be expected to work their host country’s hours, and, if so, does this conflict with the employer’s duty of care? Should employees receive an additional allowance or benefits for this inconvenience? Global mobility (GM) teams are tasked with implementing a concrete yet competitive policy that addresses these considerations, ensuring they remain attractive to potential assignees.

Safety and security concerns
GM teams are responsible for the safety of international assignees as well as keeping track of their whereabouts across the globe, whether or not they’re working remotely. Having the appropriate security and staff communication technology in place for virtual assignments is just as important. Not only do teams need to keep their staff safe, but the businesses too. Allowing employees to access company data from remote locations raises concerns around wireless connection security and data encryption, as it poses risks of potential loss of data. New policies need to be devised put in place for remote access to prevent issues such as identify theft and data breaches.

Investment in technology
International assignees working virtually may require additional IT equipment and software to continue remote working long term. The implementation of new technology can take financial commitment and time, both of which initially seem at odds with many businesses’ priorities during a pandemic. Consideration for different IT abilities has to also be factored in, as well as any training that may be required for international assignees.

Company culture
Employee satisfaction from remote working is entirely subjective, and while some virtual assignees may enjoy the experience, some companies are concerned it could damage company culture. Employees may feel isolated from having minimal contact with their peers. Additionally, a lack of physical presence in the workplace for an extended period of time can impact social and professional integration and may in fact limit productivity.

*ECA International (ECA)

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