Olivier Meier, Principal
Munich , Germany
T: +49 89 24268 406
M: +49 172 7434696
The rise of virtual assignments
For years, companies have been struggling with the complexities and costs of traditional employee mobility and been have looking for new ways to attract and leverage new talent.
Yet, the debates about allowing employees to work remotely and do “virtual assignments” have not been settled.
The COVID-19 crisis is changing all of this: never have so many employees worked remotely – not just by choice but because organizations need to maintain essential business continuity.
As many assignees have been evacuated or forced to work from home, the concept of the virtual assignee is becoming a business imperative.
Traditional expatriate management is sometimes problematic, but virtual assignments also raise a host of new questions.
However, the rise of virtual assignments could open up new opportunities for both employees and companies well beyond the end of the crisis and trigger a debate to reassess what companies mean by global mobility.
Defining virtual assignments
Virtual mobility can take different forms:
- The first and most obvious option is to allow an employee to remain in the home country while performing tasks and being responsible for operations in a different location.
- Virtual mobility can also mean allowing an employee to work in third country of choice that is not the home country or the location benefitting from the task performed.
A virtual assignment implies focusing on work for a specific location. A virtual assignee is doing remotely the same job as an assignee relocated to the host location. This is different from the situation of a manager overseeing a region or a frequent business traveler who might be supporting business operations abroad on an ad-hoc basis.
Allowing virtual assignments develops synergies between employees’ aspirations and business needs, while achieving lower mobility costs, higher satisfaction, and securing business continuity. It is also about acknowledging the fact that working arrangements are changing fast in response to technology, generational changes, and business disruptions.
The business case for virtual assignments
The traditional approach of mobility has allowed companies to support and accelerate their move to become global. Yet, the traditional barriers to mobility with traditional expatriate assignments remain a significant burden for companies. Virtual mobility address some of these issues.
Resilience and risk management. In times of crisis, international assignees may be forced to evacuate their assignment countries at short notice or not be able to perform their jobs due to local disruptions. Traditional expatriates can be a weak point in the organizations when chaos erupts. A more agile workforce that includes virtual assignees increases the resilience of organizations and help maintain business continuity.
Assignment costs. Budget constraints force companies to consider new compensation approaches (local plus and various forms of reduced packages) and introduce more segmentation in their policies. Virtual assignments can be a way to reduce costs by eliminating parts or all of the traditional assignment package.
Dual career and family issues. These issues constitute one of the top reasons for turning down assignments. There are ways to alleviate the concerns of the spouse (for example by providing assistance with the job search, coaching, or a contribution to training/education costs) but the loss of the dual income and career opportunity for the spouse cannot always be fully compensated. Aside from dual career issues, questions concerning family – such as schooling – can result in huge costs for the company and force families to make difficult decision about the future of their children.
Immigration issues. There may be sufficient willingness among job candidates to fill overseas roles, but limitations due to visas, work permit restrictions, quotas, and other legal restrictions remain impediments to mobility.
Widening the talent pool. Families and individuals who were not considering moving might be willing to accept a job if does not involve a relocation to a given country.
The limits of virtual assignments
The obvious first limit is that not all jobs can be performed remotely. A more realistic objective is not to replace employee mobility by virtual mobility but to implement it as a complementary option. From a practical perspective, organizations might not have the right processes in place to manage this new type of mobility. A range of issues about reporting lines, HR local support, and payroll arrangements could complicate the implementation of virtual mobility.
Tax and compliance considerations can present significant barriers and even risks for the company. The risk of employees triggering unforeseen tax liability or being non-compliant is significant. Personal data protection regulation preventing data transfer across borders is also an issue underestimated by companies.
When work is performed remotely from a third country, another barrier can also simply be that the company has no existing operations and no desire to have a permanent establishment in the location where the employee wants to be based.
While virtual assignments can increase the satisfaction of employees, some companies are concerned that it could damage company culture and teamwork. The employees themselves feel isolated or are concerned that they are judged as less productive by management in the host location. Not being physically present on the ground for an extended period of time can limit social and professional integration in the location where specific tasks have to be performed. The risk for virtual assignees is to be perpetual outsiders.
Cost saving is not automatic: allowing assignees to live in high-cost countries might result in additional costs. Reducing assignment packages in exchange for giving the employee more flexibility to decide where to live might not always offset these additional costs.
Best practices for implementation
Here are tips and best practices to assess your readiness to implement virtual assignments:
- Leverage the lessons from the COVID-19 crisis. What works well and what are the main issues? How can you retain some of the organizational agility and process flexibility born out of necessity during the crisis? Reflect on your company culture and to what extent new forms of mobility would fit in.
- Assess the mobility of your jobs. Take into account several dimensions including the importance of a link to a specific geography, time needed on the ground, technical constraints, integration with local teams, and cultural issues. Analyze your talent pool: Who would request and benefit from new forms of mobility within that talent pool?
- Evaluate compliance constraints and issues. Understand how laws in specific locations could hypothetically benefit virtual assignees, paying special attention to tax, employee law, and cost issues.
- Virtual mobility should not mean an absence of real mobility. Companies could initially allow employees to do a short-term assignment or an extended business trip to the destination for which the work will be performed before giving them virtual assignments. This would allow employees to build up relationships with their peers in the host location (avoiding problems linked to the lack of connection) and facilitate subsequent remote work.
- Do not underestimate cross-cultural issues. Remote virtual teams need cultural training as much as assignees relocated to a host location.
Turning temporary measures into a viable long-term model
Moving jobs to people is not going to replace traditional mobility, but it is one more tool in the growing arsenal that companies need to deploy their global operations.
As organizations move away from traditional expatriation management to embrace best practices to manage a distributed international workforce, HR team will need to understand how to implement virtual assignments successfully.
This requires new HR frameworks, processes, and a new, adaptive way of thinking.