How to manage a globally distributed workforce

The world of employ­ment has rarely seen such tumult over such a short peri­od. The pan­dem­ic has upend­ed the job mar­ket and forced employ­ers to adopt prac­tices that many would have dis­missed out of hand before 2020 – par­tic­u­lar­ly remote work­ing.

For some, that has meant adopt­ing a hybrid approach, allow­ing employ­ees to work a day or two at home each week. For oth­ers, it’s been a far more pro­found shift. 

Com­pa­nies that have embraced a ful­ly remote mod­el have expand­ed the pool of tal­ent avail­able to them, com­pet­ing for can­di­dates who may not be based in the same coun­try as their employ­er, let alone with­in a com­mutable radius of head office. 

The emer­gence of the work-from-any­where pol­i­cy has attract­ed great inter­est among white-col­lar work­ers who were freed from their dai­ly com­mutes dur­ing the Covid lock­downs. The num­ber of so-called dig­i­tal nomads – peo­ple work­ing remote­ly while trav­el­ling – more than dou­bled from 7.3 mil­lion in the US before the Covid cri­sis to 15.5 mil­lion in 2021, accord­ing to research by HR soft­ware spe­cial­ist MBO Part­ners.

If your organ­i­sa­tion has decid­ed that build­ing a dis­trib­uted work­force that spans sev­er­al time zones is worth­while, it’s clear­ly not just a case of ensur­ing that every­one has a sta­ble inter­net con­nec­tion. There are sev­er­al hur­dles to over­come in assem­bling a glob­al dream team and run­ning it smooth­ly, although these are far from insur­mount­able.

Regulatory challenges

“British enter­pris­es that employ peo­ple who live and work over­seas must con­sid­er a raft of poten­tial non-UK oblig­a­tions,” says Lee McIn­tyre-Hamil­ton, tax part­ner at Key­stone Law. 

He calls this “an employ­er com­pli­ance mine­field”, large­ly because there’s no one-size-fits-all solu­tion. Reg­u­la­tions apply­ing to pay, ben­e­fits and tax­a­tion will dif­fer from coun­try to coun­try. The more dis­trib­uted your team is, the more com­plex the sit­u­a­tion is like­ly to be.

McIn­tyre-Hamil­ton points to Cana­da and India, where for­eign firms must reg­is­ter with the tax author­i­ties and oper­ate a pay­roll in those coun­tries. “This applies irre­spec­tive of whether the UK employ­er has a cor­po­rate pres­ence there,” he says. 

You might think that reg­u­la­to­ry com­pli­ance should be less of a chal­lenge if your work­ers are liv­ing in the EU. Not so, he says. British employ­ers hir­ing res­i­dents of any EU mem­ber state must reg­is­ter to oper­ate a pay­roll in that coun­try – includ­ing pay­ing social secu­ri­ty con­tri­bu­tions. 

“This can come as a shock to UK firms that expect to pay nation­al insur­ance but then find that they’re required to make sub­stan­tial­ly high­er social secu­ri­ty con­tri­bu­tions in coun­tries such as France,” McIn­tyre-Hamil­ton says.

And it’s not only the tax­man you need to keep onside in each juris­dic­tion. “There are also immi­gra­tion con­sid­er­a­tions. For instance, does your employ­ee have the right to live and work in the coun­try in ques­tion?” 

He adds that it’s pos­si­ble for work­ers to inher­it employ­ment rights in their coun­try of res­i­dence that could be dif­fer­ent from, or even con­tra­dic­to­ry to, those they would have in the UK.

IT considerations

For Jes­si­ca Nord­lan­der, a for­mer Google employ­ee and chief oper­at­ing offi­cer of Cana­di­an tech com­pa­ny Though­tEx­change, the prime con­sid­er­a­tion for busi­ness lead­ers should be how to estab­lish a dig­i­tal work­ing envi­ron­ment that’s as effec­tive as it pos­si­bly can be. 

“The rea­son why so many com­pa­nies are strug­gling with this is that the peo­ple respon­si­ble for design­ing our dig­i­tal work­places aren’t the same peo­ple who designed our phys­i­cal work­places,” she argues.

Though­tEx­change is a ful­ly remote organ­i­sa­tion. As such, it’s worked par­tic­u­lar­ly hard to cre­ate a dig­i­tal work­place in which all employ­ees can thrive. For instance, the com­pa­ny has decid­ed to lim­it the num­ber of soft­ware pack­ages it uses to reduce the risk of tech fatigue among staff. Nord­lan­der sug­gests that oth­er firms would do well to fol­low suit.

Cultural concerns

“The real­i­ty is that the work­ing world is becom­ing increas­ing­ly remote and hybrid. More and more organ­i­sa­tions are going to look like this.” 

That’s the view of Bri­an Kropp, chief of HR research at Gart­ner. He believes that com­pa­nies should plan to have between 20% and 25% of employ­ees ful­ly remote, between 55% and 60% work­ing on a hybrid basis and the remain­ing 15% to 25% pure­ly office-based.

Such a mix cre­ates a lot more for HR teams to do in address­ing these employ­ees’ vary­ing require­ments, notes Kropp, who adds: “HR exec­u­tives will have to address the ques­tion: ‘How do I make this work­force work?’” 

Being more proac­tive in every ele­ment of HR man­age­ment is vital, he stress­es. Pos­i­tive inter­ven­tions can range from check­ing in reg­u­lar­ly with remote work­ers to ensure that all is well when they’re out of sight (but not out of mind) to stim­u­lat­ing con­ver­sa­tions that peo­ple will engage in out­side the con­fines of their work. 

For that rea­son, Kropp sug­gests allo­cat­ing some of the mon­ey saved on office space to fund­ing occa­sion­al face-to-face meet­ings at HQ, includ­ing the cost of fly­ing employ­ees in from abroad. 

“One or two days every six months is more than enough in-per­son inter­ac­tion to build those social con­nec­tions,” he says.

Many peo­ple believe that a glob­al­ly dis­trib­uted work­force, con­tactable only through dig­i­tal means, can­not pos­si­bly form a cohe­sive organ­i­sa­tion­al cul­ture. That sim­ply isn’t true, accord­ing to Nord­lan­der. 

“It frus­trates me when I hear the argu­ment that it’s impos­si­ble to col­lab­o­rate and build a cul­ture in dig­i­tal envi­ron­ments,” she says. “If you were to ask any gamer, I’m pret­ty sure that they’d say that it’s pos­si­ble to work real­ly well with peo­ple across the world whom you’ve nev­er met.” 

Nord­lan­der adds that scep­tics have tak­en her to task at con­fer­ences where she has extolled the virtues of a glob­al­ly dis­trib­uted work­force. They ask about how her approach to work­ing can help grad­u­ates fresh out of uni­ver­si­ty to devel­op the inter­per­son­al skills that will be cru­cial in their careers. 

This can be achieved through a men­tor­ing scheme in which each new recruit is paired with a com­pat­i­ble expe­ri­enced employ­ee whom they will meet reg­u­lar­ly online. 

“The employ­er must take a much big­ger respon­si­bil­i­ty for facil­i­tat­ing those social inter­ac­tions, com­pared with what hap­pens in a phys­i­cal envi­ron­ment,” Nord­lan­der says.

Dan Hugh­es is direc­tor of inter­na­tion­al research and devel­op­ment at Tal­o­gy, a provider of HR ser­vices. He stress­es the impor­tance of find­ing “a vari­ety of ways to trans­mit your cul­ture and val­ues to all employ­ees, regard­less of their work arrange­ment or loca­tion. When think­ing about your cul­ture, con­sid­er how to imple­ment this across all set­tings and include every employ­ee. For exam­ple, if you’re try­ing to devel­op a more inno­v­a­tive cul­ture, don’t sim­ply cre­ate a ‘brain­storm­ing room’ in your head office and then call it a day. Find a solu­tion that will engage dis­trib­uted work­ers as well.”

That approach needs to be led from the top of the organ­i­sa­tion, Hugh­es says. “Many lead­ers will need to adapt to hav­ing a more dis­trib­uted work­force, adjust­ing their lead­er­ship style and ways of com­mu­ni­cat­ing accord­ing­ly.” 

He adds that man­agers must beware of the risks of prox­im­i­ty bias, where­by they favour employ­ees who are phys­i­cal­ly close to them over those work­ing remote­ly.