Offices in city centres remain largely empty – particularly in Dublin where level three restrictions have sent some who had returned to the workplace back home again. But while many will remain working from home into 2021, where is this now going?
New flexibility is likely for employees in many cases. Covid-19 has been a turning point in terms of working from home. But that doesn't necessarily mean you can move to rural Ireland, or rural Italy, and work from there forever.
Companies are trying to get to grips with how this is managed – and how they get people to attend when needed.
There are concerns about the impact on team collaboration – and some specific problems about employees working from overseas. Some big companies, including Google, are telling staff working overseas to return to Ireland. The future of office work will be different, but everyone is still trying to work out exactly what it will look like.
1.WFH: where next?:
Most big offices closed completely during the initial lockdown, except for a small number of staff who had to attend.
As restrictions were eased, employers tentatively reopened, first for staff who were finding it difficult to work from home, and some then set plans for a phased more general return.
However, with the imposition of Level 3 restrictions in Dublin, most companies have put these general return plans on ice, while leaving offices open. Others have told staff they do not expect to see them until next year.
So does this mean that employees can plan to work from home in the longer term? While companies are still planning their way forward, HR specialist Caroline McEnery, chief executive of the HR Suite, says companies have seen during the forced lockdown that “this is very possible – that employees can be productive at home and that it can make their lives easier and better”.
Some companies do allow staff to work internationally and this trend may now accelerate, a bit anyway
So for many, working from home may indeed now be a longer-term option, though of course this depends on their role.
However, it is most unlikely that your employer will never want to see you. Talk in HR circles is of a “blended approach”, where employees spend some time in the office – probably for specific things such as training, team meetings, planning or whatever – and work from home for the rest of the time. This looks like the next phase for many employers.
The big question is whether it will also be the longer-term, post-Covid future. In the long term more people will certainly move back into offices, but it seems likely that the proportion working from home will remain relatively high.
McEnery says that where working from home is planned, clarity is vital between employers and employees, based on a remote working policy and an understanding of where the “boundaries” are and what is expected of the employee.
Management training is a vital part of this, she says, as managing people remotely opens up a range of new challenges. Ergonomics and data protection issues can also arise and, for some employees in smaller accommodation, it may simply not work well.
Part of the required clarity between employers and employees will be about when office attendance is expected and this will be crucial for those who have relocated out of cities during the pandemic, or who hope to do so.
Living in rural Ireland is cheaper, but employees will need to be clear what attendance at work is expected and assess whether this is viable for them.
A move out of Dublin to cheaper accommodation might work, for example, if you are expected in the office only occasionally, or for blocks of time. But if attendance is more regular, too much travel might be involved.
A key marker will be to watch how the public service handles this for its office-based employees.
Companies are still trying to work out what the future looks like – and many are loath to see office attendance disappear. One manager of a large professional services firm says the approach when Dublin goes back below phase three will be to expect people to attend for specific purposes – training, planning pitches, collaborating on plans and so on – and to leave the office open for those who want to attend more regularly, subject to distancing requirements.
But there are some cases, too, where employers will seek savings in property costs and encourage working from home.
Another larger employer said his organisation was examining whether a lot of call centre activity could be done permanently for people’s homes, offering savings for the employer and convenience for staff, many of whom would choose to fit their work around child-rearing or studies.
So it depends. We have clearly passed a turning point in the argument about whether many roles can be undertaken from home.
Companies are becoming clearer on theur plans for the phase of living with Covid – but post-Covid, as yet, nobody really knows.
2. WFH: the overseas option:
Some companies do allow staff to work internationally and this trend may now accelerate, a bit anyway. But some, including reportedly Google, are now asking staff who have been working overseas to return to Ireland by the end of the year.
A Davy report this week noted a clear increase in inquiries for higher level apartments in Dublin city centre, as many employees now plan to return. It noted “anecdotal evidence” that the big digital companies were surprised by the number of those who left the country after announcing that they could work from home.
In the case of Google, up to 30 per cent of its 7,000 employees may have done so, it says.
So why do their employers want them back? This is probably due in part to the practical complications of staff working overseas – there are tax and HR issues. But it may also relate in part to wanting to have the flexibility to call people to attend in person, at least some of the time.
Already there is talk of Irish multinationals under threat of losing some key roles to overseas
A lot of employees were keen to return to their home countries pre-lockdown and companies allowed them to do this, according to Jennifer Cashman, HR partner with Ronan Daly Jermyn solicitors, but this was an exceptional situation covered by bigger companies with detailed documentation.
However there is no legal entitlement to work from abroad permanently and many considerations for an employer to address, she says.
Among the key issues is applicable employment law. Generally if employees work overseas for a short period, Irish law will still apply, but this could change in the case of a permanent arrangement.
Tax is also an issue and while the presence of double tax treaties can reduce difficulties, the movement of employees overseas permanently can complicate matters.
Typically, says Cashman, employment income is not taxable if the individual is present in the other country for less than 183 days a year and is working for an Irish employer which does not have a fixed base in the country. However, if someone moves full time then their tax residency changes too.
A third complication relates to what is known as a permanent establishment, judged as a taxable presence of a company resident in another country. “In broad terms, a PE can be created if an employee concludes contracts in another country and/or if the company is considered to have a fixed place of business in the other country,” says Cashman. If handled wrongly, this could lead to tax demands in the other country.
This can be a difficult and messy area for companies with large numbers of people overseas, particularly if they are more senior people who effectively do business on behalf of the company and the “substance” of some of its business is seen by tax authorities to have moved out of Ireland. And thus there is a risk that some of the profits and the tax on this follow, too.
3. WFH: the policy issues
For policymakers, a number of key issues arise. One is the likely need to tweak the tax system, or to make it more clear-cut how employees apply for allowances for working from home.
Working from home could have advantages, meanwhile, in injecting new populations and activity into rural areas, but the flips side – for now anyway – are city centres which are half deserted, with big implications for thousands of SME’s who service them. A return of employees to officers, such as public servants, for at least part of the week would help here.
There are also longer term issues in terms of attracting FDI here. A key advantage for Dublin was it was a lively city and seen as attractive for key staff to come and work for the big digital multinationals, thus creating other jobs in their teams.
Now remote working and uncertainty over the future of the city centre puts a question mark over this.
Already there is talk of Irish multinationals under threat of losing some key roles to overseas – though the return of many employees now to Ireland will be better news for the economy in general.
In the long term, if more work does move remotely, the loss of key employees and functions and the associated tax revenues to Ireland remains a threat.
There is a feeling that at all ends of the market, this has a long way to play out.
