From digital nomad to nightmare: How remote working can challenge employers

Having the opportunity to work remotely has become one of the most important perks in attracting top talent for companies in certain industries. However, whilst remote working may keep employees happy and reduce business costs there are also major complexities for employers to navigate.

There is a certain risk for employers, particularly with regard to the legal and financial implications, warn employment experts at law firm Tan Ward. 

Where do remote opportunities come up the most in Europe?

In 2023, according to Eurostat, 8.9% of employees were working remotely, the rate is slightly higher at 9.9% for the whole of the EU.

In 2023, the UK, Netherlands, and the Nordics saw the highest shares of remote working, according to Oxford Economics. As for major cities, London, Stockholm, and Amsterdam had the highest share of residents working from home last year.

As for 2024, new remote hires are most significant at SMEs, companies with less than 250 employees, in Germany, the UK and the US, according to LinkedIn's Global State of Remote and Hybrid Work report. It analysed the 12 months prior to July 2024.

The industry with the most remote opportunities appears to be technology, information and media, with almost 35% of these jobs covered remotely in the UK, and more than 26% in Germany. Almost half of the new hires in small US companies in this sector were also remote in the past year, according to the report.

Across most countries analysed, remote hiring is more prominent among international companies (firms whose headquarters are outside the country where the hiring takes place) compared to domestic ones, according to LinkedIn.

What are the risks companies face when offering remote opportunities?

Employment experts at law firm Tan Ward warn that offering remote positions should be handled with caution, as it can be costly and bring complications to the company. 

"The reality of WFA is not as straightforward as it may seem, particularly when employees are permitted to work from different jurisdictions," said Daniela Korn, Head of Employment and co-owner at Tan Ward. "Employers must navigate myriad regulations, from tax laws to data protection, when allowing employees to work from various locations."

For example, a single employee working in a different country could lead to additional corporation tax liabilities and legal complications for the employer by creating a ‘Permanent Establishment’, even if the business does not have a branch in that territory.

So before one sets up their residence in Italy, but wishes to work for a company in France, for instance, all sides need to be sure that they comply with a country’s employment laws, tax regulations, immigration requirements, data protection, and health and safety standards.

Another hair-raising scenario could be when there is only a temporary arrangement like extending a holiday and working abroad - "it might seem like a great perk to offer, it can expose employers and employees to immigration law risk if you breach a tourist visa," experts warned.

"A lack of awareness could expose companies to unforeseen liabilities," adds Praveen Bhatia, co-owner at Tan Ward, emphasising the importance of seeking expert guidance.

The most straightforward advice is to take a close look at each case carefully. "Each request should be considered on its own facts as no two scenarios will be the same," emphasises Daniela.

Is remote working really what it takes to be happy?

Frankly, I would say 'yes' immediately, but it turns out, that employees across all three work arrangements (on-site, hybrid and remote) experience frequent burnout at statistically similar rates (24%-27%), according to recent research from Gallup and Workhuman, observing the US job market.

Business practices on the other hand could make all the difference.

One of the most important factors appears to be focusing on establishing clear expectations.

Setting realistic performance goals and giving recognition are two other important steps, which promise to elevate the well-being of all employees regardless of where they work, says the report.