Virtual Assignments: Benefits & Workplace Trends

Over recent years, virtual assignments have seen growth in use due primarily to advancements in technology and to the escalating costs associated with physically deploying and relocating employees overseas to perform roles.

While this development had been emerging progressively, the global pandemic of 2020 and resulting travel restrictions and social distancing regulations precipitated a cataclysmic shift in how organisations operate and manage multinational teams, leading to widespread adoption of virtual assignments as a substitute for overseas assignments within global mobility programmes.

But for employers, virtual assignments bring both solutions and risks.

 

What is a virtual assignment?

 

A virtual assignment is the appointment of an employee to work and perform tasks remotely for a location other than their country of residence or home country. This can also apply to an employee working from a third country other than their existing home or country of residence, or the country to which they are providing services. For example, an Italian national could be responsible for business development in Brazil but resides in Mexico.

Virtual assignments can be created and then implemented if they make business sense to companies and mesh with its long-term business strategy, as well as being beneficial for employees who may not be able to relocate because of family or other commitments, or due to other factors such as travel restrictions.

 

The growth in virtual assignments

 

Virtual assignments as a working model have increased in popularity in recent years, predominately because they can save business costs when balanced against physical relocation of employees, as well as their flexibility and adaptability to changing global and organisational needs. They enable employees to take on international or cross-functional responsibilities without relocating, making them an attractive alternative to traditional expatriate assignments.

 

Flexibility

Virtual assignments allow employees to work on global projects or in different markets while staying in their home country. This arrangement is particularly beneficial for employees with personal or family commitments who cannot relocate but want to advance their careers.

 

Cost-Efficiency

Relocating employees for traditional assignments involves significant costs, such as housing, travel, and relocation allowances. Virtual assignments eliminate many of these expenses, providing businesses with a cost-effective way to manage talent and achieve global objectives.

 

Technology Advancements

Improved communication and collaboration tools, such as video conferencing, project management software, and cloud platforms, have made it easier to work effectively across borders. These tools ensure virtual assignees can stay connected with teams and manage responsibilities seamlessly.

 

Changing Workforce Preferences

Many employees now prioritise work-life balance and flexibility. Virtual assignments align with these preferences by reducing the need for physical relocation and supporting hybrid or remote work models.

 

Global Reach Without Boundaries

Organisations can tap into global talent pools and expand into new markets without the logistical challenges of moving employees internationally.

 

Resilience to External Factors

Virtual assignments provide continuity during disruptions (such as the global pandemic), geopolitical issues, or travel restrictions, allowing organisations to maintain operations and meet objectives.

 

The business case for virtual assignments

 

While traditional barriers to employee mobility assignments remain a significant cost burden for business, virtual mobility addresses some of those issues.

 

Resilience and risk management

Traditional expatriates can be a source of risk in the event of an emergency or crisis in the location where they are on assignment, such as during the Covid crisis when worker either had to evacuate assignment countries at short notice or where ‘stranded’ at their overseas location. A more agile workforce that includes virtual assignees can reduce this source of risk, increase resilience and maintain business continuity.

 

Assignment costs

Virtual assignments can be a way to reduce costs by removing parts or all of the traditional assignment package.

 

Competing dual career and family issues

These issues amount to one of the top reasons for refusing assignments. However, there are ways to ease familial concerns, for example, by providing assistance with the employee’s partner’s job search, coaching, or by contributing to their training or education costs. Aside from dual career issues, questions concerning other family members – such as children’s schooling, can cause enormous costs for the business and force families to make tough decisions about the future of their children. Virtual assignments eradicate this situation.

 

Immigration issues

Even if a business has a pool of employees willing to relocate to another country, limitations due to visa issues, work permit restrictions, quotas, and other legal restrictions continue to impede employee mobility.

 

Widening the talent pool

Employees who would not consider relocating to another country might be more willing to accept a position if it does not involve moving outside their country of residence.

 

Widening the organisation’s reach

Leveraging virtual assignments may open up opportunities for the organisation in locations that were previously inaccessible.

 

The challenges of virtual assignments

 

Virtual assignments are not, however, a silver bullet, and they can present their own set of challenges.

First, this working model only really suits roles where the employee does not need to be present, ‘on the ground’ and face to face.

Not all businesses have the tools in place to implement or sustain virtual assignments. It is likely there will be different payroll arrangements, employment law considerations, changes or additions to HR processes.

Certain elements of a role or business might need to undergo some adjustment to accommodate a virtually assigned worker. For example, if the employee will manage staff in a third country, the employer may need to bring in software, technology, or adjust HR processes to ensure smooth open lines of communication across the team.

Further risks of virtual assignments can include tax and compliance issues. There may be local tax liabilities for both the employee and the business, or issues surrounding the permanent establishment of the business in the host location.

Checks should be made with the host country as to whether the employee requires any special registrations for their employment and taxation. Businesses will also need to look into how the worker is employed and in what capacity. These may differ from the business’s usual standing.

The longevity of the assignment should also be gauged. Is this arrangement beneficial for the business on a continuing basis. Is it what the employee wants in the long-term? Although the current situation may be in response to the pandemic, business owners should still ask themselves how it fits into its long-term plans. Is a virtual assignment a reflex reaction, as a short-term solution?  Does it make mutual financial sense to both the employee and the business?

Care needs to be taken that virtual mobility does not mean an absence of real mobility. Business owners should think carefully about allowing employees to undertake short-term assignments or extended business trips to the proposed working destination, prior to giving them a virtual assignment. This helps employees create and build up relationships with their colleagues in the host location, and therefore avoids issues of lack of connection, and facilitates the subsequent success of the virtual assignment.

Other pitfalls of virtual assignments surround ensuring employees not feeling isolated from their colleagues or detached from the workplace while they are aware from their main country of employment, as this can impact morale and productivity. Many companies have learnt during the pandemic, it takes careful consideration to manage physical separations and ensure continuation of business performance.

 

Considerations before implementing a virtual assignment

 

While each assignment will be individual in its requirements and circumstances, taking a proactive approach to assignment management and having an infrastructure in place to support the worker and reduce risk can help to deliver a successful virtual assignment. Considerations could include:

 

Policies & procedures

 

Success could be hindered when a business fails to include virtual assignments in their global mobility plans and policies, because it is essential these are in place to provide enough support for the employee. Does it need revision? Is the proposed working arrangement in another country actually viable? What expenses can be claimed – technology, travel, etc? Who should sign-off or approve on a virtual assignment?

 

Immigration compliance

 

Does the employee have the right to work in the host country? Are any associated work permits or visas required, or if there is a visa in place, when does it expire? Have registration requirements been properly considered?

 

Tax & payroll

 

Review any possible tax reporting requirements and liabilities relating to the host country to avoid non-compliance. Does the organisation’s tax policy need reviewing and revising to allow for this new form of working arrangement?

Consider if your company could be expected to make monthly employee tax payments in the host country. Not addressing these obligations can result in exposure to non-compliance, penalties, and interest. And result in cash-flow difficulties from dual payroll obligations.

 

Healthcare insurance

 

Does the employee have access to public healthcare or will they require supplemental private healthcare insurances. It is important to check the local provision and local access criterion. Does the employee qualify?

 

Employment law

 

Has the business considered employment law regulations (minimum wage, social security coverage, pension and healthcare rules)? Also, in a virtual mobility situation, an employee may hold a contract of employment in country A, and reside in country B. The employee can acquire rights or give rise to mandatory employer obligations under employment law of country B. This would need to be assessed and can be a complex and costly area of law to get wrong.

Duty of care

Can the business adequately support a virtual employee based in a location where limited support is available and where the business does not have a base or office?

Cross-cultural differences

Virtual assignments can aggravate cross-cultural differences, create misunderstandings, and impede productivity. Business owners should devise support policies to equip the employee with ways to handle this. Remote virtual workers need cultural training as much as traditional expatriates relocated to a host location.

Corporate structure

If you have no formal corporate presence in the host country, a number of consequences can arise. The nature of the work can create a permanent establishment (whether this was intended or not) resulting in corporate sales and VAT tax obligations and compliance.

Technology

Do you have appropriate technology and software to support with delivery of the assignment? Ensure cyber risks have been assessed and the worker trained to reduce the security risks of virtual working.

Time zone management

Consider if and how differences in time zones may impact the employee’s working hours and their work/life balance.

Training

Employees may be working in a new cultural and work culture without really being a part of it. Assess what skills and knowledge they need to assist them in working in virtual teams across cultures.

Virtual performance measures

As with physical overseas assignments, virtual assignments should entail set deliverables or targets, agreed with the worker in advance, which can be measured and assessed both during and after the assignment. Measures should be used to track progress and to identify if the worker requires additional support to meet the set target.

 

Need assistance?

 

Virtual assignments can offer businesses a flexible and cost-effective solution to pursue opportunities overseas. Looking long-term, businesses may look to retain virtual assignments within the global mobility programme given the agility, flexibility and cost-savings associate with virtual assignments. DavidsonMorris advises organisations on all aspects of global mobility strategy and talent management. To discuss the legal and HR implications of virtual assignments for your organisation, contact our specialist consultants.

 

Virtual assignment FAQs

 

What is a virtual assignment?

A virtual assignment is a work arrangement where employees take on responsibilities in a different location or market without physically relocating. They work remotely while maintaining regular communication with the assigned team or project.

 

Why are virtual assignments becoming popular?

Virtual assignments offer flexibility, reduce relocation costs, and align with employees’ preferences for remote work. They also enable organisations to access global talent and expand operations without logistical challenges.

 

How do virtual assignments benefit employees?

Employees can gain international experience, work on diverse projects, and advance their careers without disrupting their personal lives or moving to another location.

 

What technologies support virtual assignments?

Tools like video conferencing, cloud-based project management platforms, and collaborative software ensure seamless communication and productivity across locations.

 

Are virtual assignments cost-effective for employers?

Yes, virtual assignments save costs associated with traditional relocations, such as housing, travel, and relocation allowances, while still allowing businesses to achieve global objectives.

 

What challenges can arise in virtual assignments?

Challenges include time zone differences, maintaining effective communication, and fostering team collaboration. Employers need to provide support to overcome these issues.

 

Can virtual assignments replace traditional assignments?

While they offer significant benefits, virtual assignments may not fully replace traditional relocations in roles requiring in-person presence or on-site leadership.

 

How do virtual assignments affect work-life balance?

Virtual assignments can improve work-life balance by eliminating the need for relocation, but managing time zones and workload effectively is crucial.

 

Are virtual assignments suitable for all industries?

They are most effective in industries where tasks can be performed remotely, such as technology, consulting, and professional services. Some industries may still require physical presence for certain roles.

 

What should employers do to ensure virtual assignments are successful?

Employers should provide the necessary technology, offer clear communication channels, set expectations, and ensure employees have access to training and support during their assignments.

 

Glossary

 

Term	Definition
Virtual Assignment	A work arrangement where employees take on responsibilities in a different location or market without relocating physically.
Remote Work	Working from a location outside the traditional office environment, typically supported by technology.
Global Collaboration	Teams or individuals from different geographical locations working together on shared goals or projects.
Relocation Costs	Expenses associated with moving an employee to a new work location, including housing, travel, and allowances.
Cross-Border Project	A work assignment involving tasks or responsibilities across international borders.
Work-Life Balance	The equilibrium between professional responsibilities and personal life, often improved through flexible work arrangements.
Cloud-Based Tools	Software and platforms hosted on the internet that enable remote collaboration, such as file sharing and project management systems.
Time Zone Management	Coordinating work schedules across different time zones to ensure effective communication and productivity.
Hybrid Work Model	A work arrangement combining remote work and in-office responsibilities.
Cost-Efficiency	Reducing expenses while maintaining or improving productivity, often achieved through virtual assignments.
Workplace Flexibility	Allowing employees to adjust their work conditions, such as location and hours, to suit their needs.
Global Talent Pool	Accessing skilled professionals from around the world to fill organisational roles or project requirements.
Disruption Resilience	The ability of organisations to continue operations during external challenges, such as travel restrictions or pandemics.
Technology Infrastructure	The digital tools and systems that enable remote work and virtual assignments, including communication and collaboration software.
Professional Development	Gaining new skills or experiences through work assignments, including exposure to different markets or cultural environments.
Virtual Leadership	Managing and guiding teams remotely, often requiring strong communication and technological skills.
Employee Engagement	The level of enthusiasm and commitment employees show towards their work, influenced by effective communication and recognition.
Productivity	The efficiency of completing tasks and achieving goals, which can be supported by virtual assignments with the right tools.
Team Dynamics	The interactions and relationships within a group, which can be affected by remote collaboration and cultural differences.