Remote work is controversial. Many employees think it’s good, companies reject remote work. However, some tech CEOs have now realized that remote work can be exploited to save costs.
Many CEOs reject remote work because they consider it less productive. However, many employees counter that remote work is significantly more flexible. Researchers have now found that people who work remotely feel better.
However, the new trend among tech CEOs is “Borderless Talent”: this allows bosses to embrace remote work while saving money and resources. However, this is not a good development for the work location Europe and Germany.
New employees in remote work, but no longer at an expensive location like Germany
What is “Borderless Talent”? The English word refers to the practice of seeking and hiring talent regardless of their geographical location. Since companies have become significantly more flexible thanks to remote work, a company may transition to hiring individuals who work in other countries.
Thanks to remote work and the fact that many are no longer dependent on an office, companies are beginning to look for workers abroad. This is because many companies find regions like Europe or the USA significantly less attractive than, for example, Latin America or Africa. This is due not only to more relaxed labor laws, but also lower wages. This has been reported among others by 3Djuegos.com.
For companies, this means not only creating more competitive and cost-effective teams but also keeping the corporate apparatus running around the clock, as employees on different continents work at different times.
In the tech industry, this is seen as a great advantage. Jeremy Johnson, CEO of the AI-powered tech talent marketplace Andela, explained to CNBC.com:
Once you realize that you don’t need to be in the same office five days a week to build a compelling company culture, feel connected to the mission, and solve complex problems, you begin to realize that there are great people everywhere in the world.
Others consider “remote work and offshore talent essential for companies” (via entrepreneur.com).
What are the drawbacks of the trend? Employers can tap into cheaper labor from low-wage countries. This increases the pressure on local salaries, which is particularly problematic in expensive locations like Germany.
Germany is no longer considered one of the most attractive locations for international top talent according to the current OECD ranking, as other countries offer more flexible working conditions or lower labor costs.
And there is one more drawback: compliance with German labor, social, and tax standards becomes more complicated with cross-border employment. Companies might be tempted to opt for locations with lower regulatory burdens for cost reasons (via Haufe.de, PDF file).
A company is abolishing remote work to save costs. However, employees are fighting against the employer’s plans. With surprising consequences: a quarter of the workforce resigns and strikes shake the company: A company abolished remote work and now has an unusual problem: 25% of employees resign
