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As featured on BusinessMirror: Current trends in remote working

Over the past three years, remote work has become an integral part of our working world. The ability to work from anywhere has transformed how we work, removing geographical limitations and reshaping the traditional office-based model.

At the beginning of the journey, companies had to quickly react to support employees and maintain business continuity during the COVID-19 pandemic. As restrictions eased, employees began to recognize the value of location-independent work, leading to a growing demand for workplace flexibility. Today, while organizations continue to explore the approaches that best fit their talent and business needs, many have already embraced more flexible work models and are enjoying the benefits of a borderless workforce.

The Philippines has witnessed the transformative impact of remote work, especially in the wake of the COVID-19 pandemic. This shift aligns with the Philippines' tech-savvy workforce, where various sectors have embraced digital tools and online collaboration platforms. As a result, many businesses in the country have recognized the potential of remote work in attracting and retaining top talent, especially in industries facing talent shortages.

With the increasing demand for skilled professionals, remote work presents an appealing option for employers in search of talent and employees keen on flexible work setups. As Philippine organizations adjust to evolving work environments, it's crucial to concentrate on revising policies, streamlining procedures, and embracing technology-driven solutions.

Karen Jane S. Vergara-Manese
Tax Partner and Global Mobility Services Country Lead
KPMG in the Philippines

In light of the continued dynamic development of remote work, this study aims to gain insights into where companies are on their journey today and validate the findings from the “Current trends in remote working” survey conducted two years ago.

1.     Remote working policies continue to increase

Comparing the results from two years ago, the number of companies that have introduced a policy or standard for remote work has increased by more than 10 percent. Today, almost half of the respondents (48 percent) have introduced a policy or standard, while about a quarter (27 percent) are planning to do so. Some of the respondents (11 percent) are allowing for remote work but don’t have a policy or standard in place. Only a few (7 percent) indicated they do not plan to introduce remote work.

2.     Remote work is talent-driven

The primary driver for implementing remote work arrangements remains the employee demand for workplace flexibility (73 percent). While COVID-19-related reasons have become less influential, talent-related drivers such as improving employer attractiveness (53 percent), bridging talent shortages (38 percent) and gaining better access to skills (27 percent) have increased in importance. Only a few respondents cited cost savings (14 percent) or reduced carbon emissions (3 percent) as the reasons for adopting remote working.

The results indicate that remote working has become primarily driven by the need to attract and retain talent. Remote working is thereby establishing itself as an important part of the talent strategy, especially in industries that face talent shortages. Where organizations are purposefully using remote working as part of their talent agenda, workplace flexibility is actively communicated in job postings and advertised in recruitment publications.

3.     HR and Global Mobility are responsible for international remote work

The governance models of international remote working continue to evolve, including which functions hold primary responsibility for managing the international remote working programs. Compared to our 2022 study, the findings reveal that this responsibility increasingly sits with HR and Global Mobility functions. The Tax departments, who often found themselves deeply involved in the management of cases during the initial waves of COVID-19 related remote working, are now less frequently responsible for the ongoing management of the programs.

4.     When remote work crosses borders, short-term arrangements remain the most common approved type

Most of the respondents indicated their company allows for remote working within country borders (73 percent). When it comes to cross-border remote working, short- term arrangements remain the most common type, with over half of the respondents (52 percent) considering or implementing temporary arrangements of up to 90 days per year. Around 20 percent of respondents are considering hiring abroad or facilitating virtual assignments. Longer-term international remote work arrangements of more than 90 days continue to be least common.

5.     Compliance-related challenges continue to be the primary concern

According to the latest study, most companies (82 percent) identify tax and legal compliance as their biggest challenge when it comes to implementing remote working. Similarly, 65 percent of companies cite managing the risks associated with creating a permanent establishment, while 26 percent mention immigration restrictions as the main hurdle. Aside from compliance-related challenges, respondents also identified challenges relating to implementing and administering a remote work program itself. These include establishing robust processes and governance (43 percent), tracking days spent abroad, (30 percent), and ensuring clear communication of guardrails and policies.

6.     Most companies rely on case-by-case assessments to help reduce compliance risks.

In light of the continued compliance challenges, the question remains: what measures are being introduced to effectively manage the associated risks? The majority of respondents (59 percent) conduct case-by-case assessments, while almost half (46 percent) have introduced policy limitations to set clear guardrails that at least partially reduce the need for individual case assessments. Some companies use specialized tools to track remote work requests (16 percent) or run automated risk assessments (6 percent).

The results show that most organizations currently rely on manual processes for managing their remote working programs. Only a small number with more advanced programs have implemented technology-based or automated solutions.

This is not entirely surprising as the level of process automation will vary from one organization to the next. Each company trying to answer the question of whether to implement technology will need to evaluate factors such as the number of cases they experience, the degree of program standardization and the level of complexity embedded within their processes.

7.     In 2023, most companies are focusing on implementing governance and processes for their international remote work programs.

When we asked the participants about their top priorities in the coming months, the majority expressed their willingness to focus on implementing governance and processes for international remote working. Additionally, a third of participants (33 percent) are planning to introduce formalized policies.

More than 60 percent of participants prioritize updating and expanding their existing programs. This includes focusing on different types of remote working (31 percent) or reviewing and updating existing policies (31 percent). Around 20 percent of participants are seeking to automate their processes or implement a technology-based solution.

While “Work from Anywhere” is here to stay, it will likely continue to evolve

As the study suggests, even though we are only at the beginning of the remote working revolution, companies are already reviewing their existing policies and looking at embracing new types of remote work arrangements. This trend is likely to continue as flexible working becomes an integral part of organizations’ talent strategies.

The excerpt was taken from the KPMG Thought Leadership publication: https://kpmg.com/xx/en/home/insights/2022/03/insights-on-current-trends-in-remote-working.html

© 2023 R.G. Manabat & Co., a Philippine partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

For more information, you may reach out to Tax Partner and Global Mobility Services Country Lead Karen Jane S. Vergara-Manese through ph-kpmgmla@kpmg.com, social media or visit www.home.kpmg/ph.

This article is for general information purposes only and should not be considered as professional advice to a specific issue or entity. The views and opinions expressed herein are those of the author and do not necessarily represent KPMG International or KPMG in the Philippines.