What does Deloitte’s Global Remote Work Survey mean for New Zealand?
Tax Alert - February 2023
By Stephen Walker
According to the more than 820 tax, HR, mobility, and payroll business professionals from 45 countries who responded to Deloitte’s global remote work survey, remote work is now considered part of normal working practice; and over 80% of organizations have implemented some form of remote work policy.
Yet, there is evidence of a gap between the ambition behind remote work policies and the actions taken to manage or enforce them. The big challenge many organizations face is how to operationalise their remote work policy in a way that enhances their talent and culture strategies – while managing the complex tax compliance and business risks that can be created by these remote workers and fulfilling their duty of care as an employer.
In this article, we explore some of the key survey findings and consider them through a New Zealand lens. If you and your organisation can relate to these findings, it might be reassuring for you to know that you are not alone and help is at hand.
Key remote work survey findings
The majority of organisations are enabling remote work.
Certainly, in the New Zealand setting, we are seeing a substantial increase in the number of clients reaching out to us with questions about how best to implement their remote work policies and manage the various risks that come with it, supporting that remote work is becoming an increasingly popular tool in the talent toolbox for Kiwi businesses.
Remote work is predominately driven by talent pressures.
With the tightening up of the local labour market, New Zealand has been no stranger to the pressures on businesses to seek, attract and retain talent. Coming off the back of the COVID-19 lockdowns, people have been keen to travel again, to reconnect with family and friends. Technology advancements and changes in working practices that occurred during the lockdowns have resulted in an awareness that people can work from almost anywhere, leading many to seek the ability to take their work with them. With many New Zealand employers in the market offering this new way of working, it has become imperative that businesses match or exceed employee expectations in order to stay competitive.
There is tension between talent demands and risk mitigation.
We’ve seen this play out here in Aotearoa, with the HR teams often seen as the ‘good guys’ of remote work seeking to offer amazing employee experiences and opportunities to work from anywhere in the world, and the tax or finance function are sometimes seen as the ‘bad guys’ for highlighting the important and sometimes significant tax risks and putting the brakes on until these issues have been ironed out – please refer to our article “Hey Boss, can I work remotely…offshore” for more information on some of these key issues. In some instances, we have even seen policies rolled out without any consideration of the tax implications. So this is very much a local issue too.
Implementing guardrails to address legal and compliance risks
In the world of remote work, one thing is clear: There is no “one-size-fits-all” solution to the issues that remote work presents. Each individual has their own set of facts and circumstances that impacts the potential outcomes, and each country’s domestic rules and international agreements differ. It is interesting the survey results show that, of those who have implemented a day count guardrail for remote work, 19% have opted for up to 20 days and 17% have not prescribed any time limit. So there is a clear gap in the risk appetites across organisations. In the New Zealand market, we’re seeing this play out in the competition for talent. Those organisations with bigger risk appetites, or perhaps smaller and less sophisticated tax and legal support functions, are offering broad and unrestricted remote work opportunities when compared to those with lower risk appetites or larger support functions who are able to investigate and highlight those risks, putting these firms at a competitive advantage in the war for talent; however, the big question is at what cost from a tax risk perspective.
There’s a gap between policy inception and rollout and the ability to operationalise and enforce remote work processes.
Whilst many organizations are mindful of the need for compliance and risk mitigation and are trying to do so by defining guardrails, we’re seeing that the management and enforcement of these guardrails are still a work in progress for lots of Kiwi businesses, with many either not tracking their remote work requests, or in some cases being unaware of instances of remote work until after the fact.
So what should you be doing now to operationalise your remote work policy?
Combining Deloitte’s own experience and those of the companies around the world we’ve worked with, we’ve distilled five key actions that Kiwi business need to be taking now to chart their course and progress regarding their remote work strategies:
- Align your remote work model to organizational strategy;
- Assess the risks;
- Identify the routes to enablement;
- Determine how to best track and govern your remote population; and
- Stay connected to the long-term talent strategy.
If you would like to know more about these five actions, and how to implement them for your business, please contact your usual Deloitte advisor.
February 2023 – Tax Alerts
- What does Deloitte’s Global Remote Work Survey mean for New Zealand?
- “Hey Boss, can I work remotely….offshore?”
- What happens if you fail to disclose FIFs?
- Inflation and personal tax bracket creep – a bigger picture
- Don’t cry about UOMI
- Tax Governance is here to stay
- ESSTs – what are they and why there is no place for them in the tax system
- Snapshot of recent developments