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Remote Teams vs Onsite Teams: Implications
The rapid growth of the mobile, remote workforce presents Australian businesses with a unique opportunity to increase efficiency and reduce costs. What are the financial implications of engaging remote employees?
The most significant trend in workplaces is the growth of the mobile workforce.
The constantly evolving digital landscape has created an employment ecosystem in which many businesses blur the line between work and home. The ubiquity of high-speed broadband and wireless technology allows Australian businesses to offer employees flexible work practices that, in many cases, result in fully remote working agreements.
Data published by job listing platform Indeed in 2019 reveals that over two thirds of Australian employers now allow employees to work remotely, either on a fully or partially remote schedule. Remote work is rapidly becoming the “new normal” for Australian professionals — IWG Global Workspace Survey data indicates that 50 percent of employees now work on a remote basis outside of business offices for 2.5 days weekly.
The 2020 Coronavirus pandemic has accelerated the rate at which Australian employers adopt flexible work from home and remote work relationships with employees. Allowing employees to work on a remote basis can significantly reduce the impact of pandemics such as the COVID-19 outbreak and allow businesses to continue to operate through economic upheaval, but there are a number of factors to consider before shifting to a remote working agreement.
In many cases, remote employees can offer impressive efficiency advantages and cost savings. Ensuring that your business remains compliant with relevant tax law, however, is critical. Here’s what you need to know about the financial implications of remote employment.
Are Remote Employment Agreements Cost-Effective?
Engaging employees on a remote basis can deliver a range of benefits to your business — a fact that has not been overlooked by the employers of over 3.5 million Australian professionals that currently work on a remote basis.
Data published by Indeed reveals that 51 percent of Australian businesses that have a mobile workforce experience operational cost savings. Allowing your employees to work from home doesn’t only deliver operational cost efficiency, however. A 2014 study published in the Quarterly Journal of Economics indicates that remote working arrangements deliver a 13 percent performance increase over onsite employees.
Employees offered at-home or remote working arrangements value job flexibility. A 2017 survey published reveals that the average worker is willing to adapt to an 8 percent loss in wages in order to work from home.
In addition to delivering higher work efficiency and reducing wage costs, remote work also presents employers with the opportunity to reduce additional operational costs. Respondent data from IWG’s Global Workplace Survey demonstrates that businesses that engage remote workers are able to save up to 10 percent on long-term leases by converting to flexible workspace arrangements.
The Australian Government operated an APS Telework Trial in 2013 that revealed a variety of benefits from remote employment arrangements, which include:
- The ability to hire from a wider talent pool of potential employees
- Reduced employee turnover
- Increased employee engagement due to work/life balance
- Enhanced collaboration between employees in disparate locations
- Office and workspace expense minimisation
What Are Your Responsibilities Towards Remote Employees?
While a mobile workforce can deliver a number of advantages over onsite employees for specific businesses, it’s important to remain aware of your obligations.
Your business may choose to engage remote employees for a wide variety of reasons, such as maintaining social distancing practices during a pandemic or in order to leverage specialized experts that are not available in the immediate geographic vicinity of your business.
The Fair Work Ombudsman website outlines the basics of flexible working arrangements. Employees and employers are free to establish flexible working arrangements that include remote employment as long as employees are still receiving their minimum entitlements.
Businesses are able to establish individual flexibility arrangements (IFA) in which an employer and employee negotiate specific terms within an enterprise agreement, award, or registered agreement apply to both parties. Employers must ensure that an employee is better off overall with an IFA than without compared to their previous award or agreement, if a previous agreement exists.
Financial Considerations of Remote Employee Arrangements
If any of your team members or employees work from home, it’s important to ensure that your business meets work health and safety obligations under the Work Health and Safety Act 2011 (Cth) or equivalent in your state or territory.
It’s important to note that Work Health and Safety obligations extend beyond the physical boundaries of your office space. A notable example of these obligations can be found in Hargreaves and Telstra Corporation Limited  AATA 417, in which a Telstra employee working from home made a claim under the Cth Safety, Rehabilitation and Compensation Act 1988 for an injury that occurred during remote working hours.
Telstra denied liability on the basis that the injuries suffered by the employee did not arise out of, or were not in the course of, her employment. The Administrative Appeals Tribunal determined that the injury occurred whilst the employee in the process of carrying out a requirement for work, thus rendering Telstra liable.
- If your business chooses to use a mobile workforce, it’s important to:
- Provide employees with a checklist to ensure that their workplace is suitable and meets Work Health and Safety requirements
- Establish workplace policies designed for home or remote office spaces
- Ensure that employees follow Work Health and Safety procedures should they sustain an injury while working remotely
Your business may also be responsible for providing employees with the appropriate resources in order to carry out work. In some cases, this may involve reimbursing expenses incurred while remote work is performed, such as additional electricity or internet access costs.
These obligations should be clearly delineated in a specific work from home policy or enterprise agreement. It’s important to establish with your employees which costs will be reimbursed, what kind of approvals are required, and what limits may apply.
If you’re not sure how your business will track and manage expense reimbursements, you may want to consider cloud-based expense tracking solutions that streamline expense management. For more information on cloud-based expense tracking, take a look over Fullstack’s guide to Expensify: Straightforward Expense Reimbursements.
If your business is currently building a mobile workforce, it’s essential to create a concrete framework before getting started. Regular communication, clearly defined obligations and responsibilities, and firm boundaries between work and home life will ensure that your business is able to leverage the benefits of remote employees without encountering any obstacles.
Engaging employees on a remote basis can be complicated, especially when working with internationally based remote employees. For comprehensive guidance on the costs and benefits of onsite versus remote employees, reach out to Fullstack today.