Mobile working - even across national borders - is a trend that will not leave us any time soon. Whether it is working from a foreign residence, a work assignment, an employee secondment abroad or the employment of a foreign specialist - there are many challenges that companies and their employees have to consider. Sufficient preparation on the part of employers is es-sential - otherwise there is a risk of far-reaching consequences. Innovative solutions and pro-cesses help to overcome legal, bureaucratic, cultural and technological hurdles.
The days of employees working in the same company in their home town for 40 years, going to the same office and the same workplace every day, are long gone. Society has changed. The economy has changed. The world of work has changed. Globalisation and, not least, the Covid pandemic have contributed significantly to both workers and companies demanding more flexibility than ever.
"Working from anywhere" has manifested itself as a continuing global trend in the modern world of work.
The last few years have proven that remote working is - in many cases - a good alternative to working at a fixed office workplace. Thus, even after the pandemic, many people continue to work from home. According to the Federal Statistical Office, in 2022 just under a quarter (24.2%) of all employed persons in Germany were - at least occasionally - working from home.1 This is an advantage for many employees - especially working parents or those with a long commute benefit from it.
Though, mobile working is also practised across borders: cross-border commuters make more frequent use of the opportunity to pursue their profession flexibly from their place of resi-dence abroad. Today, professionals like to combine work and holiday by working temporarily from abroad.
Mobile working: Essential in the battle for skilled workers.
Whether the flexibility of "working from anywhere" is also expedient from an employer's point of view cannot be answered conclusively at this point. In the USA, many well-known companies, such as Amazon, are returning to a policy of full office presence. In Germany, however, the situation is different: We currently have an "employee market". Companies are vying for qualified employees. This means that employers have to meet the demands of their employees in the fight for qualified staff.
Enabling employees to work on the move, even outside Germany, is almost becoming a duty. This is because it offers the opportunity to stand out from the crowd and to elevate one-self from any competitors during the recruiting process and to win skilled workers for one-self. A "working from anywhere policy" can also be advantageous for long-term employee retention and satisfaction.
Another consequence of the shortage of skilled workers is that companies have to recruit skilled workers abroad.
According to the Federal Employment Agency, there is a shortage of skilled workers in every sixth occupation in Germany.2 DIn the academic sector, for example, specialists in the fields of medicine, IT and engineering are desperately sought.3
"Due to demographic change, Germany will probably no longer be able to compete in a few years’ time without skilled la-bour support from abroad. It is therefore essential that companies create processes and pro-fessional procedures in order to be able to hire trained foreign employees quickly and in a legally secure manner," explains Sevim Weller, lawyer and expert for wage tax & internation-al employee secondments at BDO.
To or from abroad: companies must pave the way for cross-border working.
While at a low during the Covid pandemic, the number of staff secondments of international-ly operating companies to foreign locations has slowly been increasing again. Companies want to ensure cross-border know-how transfer and promote competitiveness - even if the total number of traditional secondments abroad has decreased due to increased remote working.
Consequently, companies of all types and sizes need to adapt to new challenges and create innovative processes for cross-border collaboration - from organisation and preparation to daily collaboration. This means that most companies will inevitably have to adapt to more agile working with employees from abroad - networked, digital and flexible.
Legally compliant preparation for international employee assignments is essential.
However, before cross-border cooperation can begin, companies must make various organisa-tional preparations and legal arrangements. For example, there are labour, tax, social and residence law issues that employers should pay attention to in advance.
"Depending on the preconditions, it can already be a complex process in the preparation stage," says Wel-ler. "This is where we come in with our advisory services. Together with our cooperation partner BDO Legal, we at BDO pursue an integrative approach that includes aspects of labour and res-idence law as well as social and tax law. The aim is always to keep risks for employees and employers as low as possible.
At BDO, we not only have a deep understanding of the challenges faced by expatriates, but also a large number of specialists whose advice covers the entire spectrum of services, in-cluding tax, advisory and auditing services. The services in the area of Global Employer Ser-vices are closely coordinated. Legal advice is provided by our cooperation partner, BDO Legal Rechtsanwaltsgesellschaft mbH. Through our strong international network, our range of ser-vices is available in 164 countries worldwide."
Individual considerations are imperative.
One case is rarely the same as another. That is why the Global Employer Service Team of BDO and its cooperation partner BDO Legal always analyses the cases and basic conditions sepa-rately and develops individual solutions tailored to the clients. Here, for example, the period and regularity of the stay as well as the activities performed by the employees are important.
"We advise on complex posting constellations worldwide. Even within the EU, secondments can be complex, despite double taxation and social security agreements and the free move-ment of workers," explains Weller. "We always take a close look at the needs and initial situa-tions, carry out risk analyses and support the development of concepts and the establishment of processes and regulations. We have observed an increased need for advice in this area, especially among start-ups and medium-sized companies. We are pleased when we can support them with our experience in establishing fixed struc-tures - be it for longer-term employee assignments, for short-term reworkations or also for the permanent employment of skilled workers from abroad."
Poor preparation can be costly.
The relevance of legally secure preparation of an employee assignment to or from abroad has not yet been equally understood by all concerned. Violations of the regulations can have le-gal consequences for companies and employees.
"In Germany, fines of up to 5,000 euros for the employee and up to half a million euros for the company can be imposed for employment without a work permit. In addition, companies that do not pay taxes and social security con-tributions correctly abroad must expect considerable fines and, in the worst case, may even suffer a loss of reputation. In the case of illegal employment, persistent violations can even result in deprivation of liberty - even in many Western countries this is no longer a trivial of-fence," explains Stephanie Herbrich, Manager, Tax & Legal at BDO. "Many of those affected are not aware of this. We help to ensure that this does not happen."
There is a need for innovation in the immigration of skilled workers.
The shortage of skilled workers in Germany has been looming for several years and is likely to be with us for a long time to come. Nevertheless, Germany still has to pave the way for the unbureaucratic immigration of qualified workers. The Skilled Workers Immigration Act, enacted in 2020 and reformed in 2023, is intended to make it faster and less bureaucratic for skilled workers to work in Germany. Bureaucratic hurdles are to be removed.
However, the experience of recent years paints a different picture: "Our German authorities are still poorly positioned. Processing and reaction times for residence permits and visas take far too long - especially in international comparison. Many obstacles are placed in the way of top performers. In this way, Germany cannot be a competitor in the battle for skilled workers. After waiting for months, engineers from India, for example, are more likely to decide to gain a professional foothold in one of our neighbouring countries, in the USA or in Canada. We try to speed up the process through good counselling and preparation. But in the international battle for trained professionals, the German administration urgently needs to develop further and establish innovative solutions for more efficient processes," says Herbrich.
Working abroad: A new start brings challenges.
Once the legal path has been cleared, employees are finally allowed to pursue their interna-tional activities. But in the destination country, too, there are more challenges that need to be mastered - especially in the case of long-term stays. In Germany, there are specialised service companies that support expatriates and their employers in these tasks. Currently, Germany is not yet very attractive to skilled workers from abroad. It lacks in many places: There is a lack of housing, language support, school and day-care places, and at the same time the cost of living is high. The measures taken so far are not yet sufficient to meet the demand, reports Herbrich.
Another important point: integration.
" Germany also has a lot of work to do when it comes to digitalisation and a welcoming culture. Other countries are much more progressive," says Weller.
This can be seen at the level of society as a whole as well as at the company level. Employers have to find innovative ways to integrate new skilled workers from abroad quickly and at the same time for the long term. Good onboarding is the key to successful coopera-tion. This can begin with the provision of comprehensive orientation information in a wel-come package. It is also advisable to appoint a permanent contact person for new colleagues who can provide support with professional, technical, administrative or cultural issues.
Tools for cross-border cooperation.
In the case of cross-border cooperation, good and efficient collaboration must also be en-sured. Whether it is a longer workation stay or cooperation with employees sent abroad - technologies help to successfully master the challenges of everyday international work.
Here are some recommendations at a glance:
- Tip 1: Effective communication and clear rules and responsibilities facilitate international collabo-ration: who does what - and by when? Classic project management tools such as Trello or Asana can help.
- Tip 2: Working hours can vary due to different public holidays or time differences. Transparent communication of your own working hours and respect for those of your colleagues abroad is essential. If different time zones lead to major logistical challenges, a conference planning tool can help to plan virtual meetings that are convenient for all participants.
- Tip 3: Collaboration tools like Microsoft 365 help to overcome physical boundaries and to work closely with the international team on joint projects.
We need even more innovative ways in the future.
Cross-border collaboration is a broad field. It is demanded by many employees and companies, and at the same time it is unavoidable due to economic dynamics. It is clear that many advantages and opportunities arise from a more mobile deployment of employees. Be it the gain and retention of workers or the international transfer of knowledge. On the other hand, there are many hurdles to overcome - legal, bureaucratic, cultural and technological. The task of the next few years should be to remove these hurdles with even more innovative solutions and processes. Because further globalisation and the associated international deployment of skilled workers is unstoppable.
1 Federal Statistical Office (2023). Just under a quarter of all employees worked from home in 2022. Destatis.de. https://www.destatis.de/DE/Presse/Pressemitteilungen/Zahl-der Woche/2023/PD23_28_p002.html#:~:text=Figure%20of%20the%20week%20No.,Statistical%20Federal%20Office%20(Destatis)%20reports.
2 Federal Employment Agency (2023). Shortage of skilled workers is increasing: number of bottleneck occupations rises to 200. Arbeitsagentur.de. https://www.arbeitsagentur.de/presse/2023-26-fachkraeftemangel-nimmt-zu-zahlder-engpassberufe-steigt-auf-200.
3 The Federal Government (2023). The new Skilled Immigration Act at a glance. make-it-ingermany.com. https://www.make-it-in-germany.com/de/visum-aufenthalt/fachkraefteeinwanderungsgesetz.