Work from anywhere?
After more than a year of remote work, the full-time cubicle-dweller may be a relic of the pre-COVID world.
Pre-pandemic, many companies were hesitant to adopt flexible and remote work arrangements. Some companies cited concerns about remote work’s impacts on culture and productivity. Some companies didn’t have the systems in place to allow all employees to work remotely, even if they allowed remote work on a limited basis.
After gaining a year’s worth of evidence that business can proceed as usual with no employees in the office, these arguments against remote work are now significantly less convincing.
Post-pandemic, hybrid work arrangements are expected to become the norm. Allowing workers an option to work in the office seems plausible in the short term, since many companies still lease or own commercial real estate. However, the expenses associated with maintaining physical corporate offices may become more difficult for companies to justify in the longer term.
In a world where former office-dwellers may only be required to physically work from their employer’s office once a quarter (or less), where will employees move?
Within the United States, this question is already being answered. Estimates indicate that New York City, where the population was already in decline, had a net loss of 70,000 people in 2020. San Fransisco may have lost as many as 89,000 households, net of new immigrants to the city. While we can attribute some of this migration away from cities to the pandemic itself, avoiding COVID doesn’t account for all of this migration. Cities with lower costs of living have seen significant growth in 2020, even as COVID spread widely.
For many remote workers, migrating out of a high cost of living city to a neighboring suburb or a lower cost of living area within their country of origin may be the extent of their aspirations. This type of location independence allows workers to benefit from lower housing costs and more favorable tax environments (although tax treatment of remote-work earnings may change if current trends continue). However, there is a portion of the newly-remote working population that may consider moving farther afield.
Early Movers
In 2020, a portion of the formerly office-bound workforce began considering moves abroad. There are many job roles that aren’t constrained by timezone, and even employees in roles that require specific hours may be willing to work at unconventional times for a chance to work from the beach. Some companies already acknowledge the natural next step after working from home may be working from anywhere.
With tourism revenues down worldwide in 2020, some enterprising countries are already taking steps to attract workers considering longer-term stints outside their home country. Countries like Anguilla, Antigua and Barbuda, Aruba, Barbados, Bermuda, the Cayman Islands, Estonia, Georgia, Mauritius, and Dubai (UAE) offer a variety of visa options for digital nomads to work while visiting (at a variety of price points).
The Gray Area
Currently, whether or not employees can work from anywhere remains a gray area. Many of the relevant tax laws, employment laws, visas, and corporate policies simply don’t address the possibility of a globally mobile remote workforce. Companies and countries that take steps to clarify laws and policies now will be better positioned to attract and retain globally mobile talent going forward.
Although many tourist visas expressly forbid working locally, they may not address whether this prohibition applies to working remotely for a non-local employer while on holiday. Countries have a variety of different rules defining when a remote worker’s presence can be seen as establishing a global office on behalf of their non-local employer, which can have tax implications for companies. Countries also have a variety of rules dictating when local labor laws apply to a remote worker, which may have implications for companies if remote employees choose to work from a more labor-friendly country than their home country. There could also be tax implications for remote employees, depending on where and how long they work outside their country of origin.
Prior to 2020, many companies and countries addressed the variety of tax, labor, and visa laws around the world by simply prohibiting employees from working outside the countries where they were hired. However, when remote work is widely accepted, the ability to offer more location freedom becomes a competitive advantage for both companies and countries. Just as it will be difficult to force employees back into the office full-time after a year of evidence they can work remotely, forcing employees to stay in one place when they no longer have to work from an office will become increasingly difficult to justify.
Risks and Opportunities
The ability to work from anywhere presents new opportunities for countries, companies, and employees, but adapting to the new world of work will involve some adjustment in both the short and long term.
Aside from the complexity and lack of clarity in current laws and policies governing work, there are longer-term risks to the existing state of the worldwide labor market itself if remote work from anywhere becomes widely accepted. If companies allow employees to work from anywhere, companies may also want to hire candidates from anywhere. While this could ultimately be positive for both employees and employers, this will increase competition for roles previously held exclusively by local employees. Before a truly global labor market could become the norm, companies and countries will have to rethink laws and policies surrounding salaries, benefits, visas, immigration, taxes, employment, and labor.
In the shorter-term, remote work from anywhere offers opportunities for companies and countries. For countries with political opposition to immigration, remote worker visas may be an attractive option to gain additional tourism revenue from foreign nationals without risking local jobs. New business opportunities will continue to arise from a more globally mobile remote workforce. The complexity of current laws and policies creates opportunities for consulting firms and law firms to help companies, countries, and employees navigate the process of working from anywhere. New co-working/living spaces that can accommodate globally mobile remote workers for longer stays will be needed in countries opening borders to remote workers. The importance of technology, software, systems, and applications to support a remote workforce will continue to increase.
