How the technology industry can shift to remote work long-term
Technology companies were some of the first advocates for remote work, but not always the first adopters.
In fact, some of the biggest leaders in the technology industry cultivated campus-driven cultures that have been forced to close for COVID-19. As Wired recently reported:
“For years, tech companies have lured talent with sweet in-office perks … not merely offices—they are campuses as big as theme parks, built to encompass and entertain their workforces en masse. [Now,] some tech companies are offering a new kind of perk: the option to never return to those offices again.”
The CEO of Twitter recently told employees that they can choose to work from home permanently. “Those once-envied campuses may be coming to an end, or at least may be used in a different manner, in the very near future,” said Grant Thornton Tax Managing Director Joel Waterfield. “This forced isolation over the last few months has proven that many people are very efficient working from home – productivity has not fallen, and in some cases it increased. The use of remote technology has been quick and mostly seamless, yielding consistent quality output that allowed employers to keep earning revenue during this unprecedented period.”
However, even tech giants need to make some adjustments as they shift to more remote work. Beyond the required technology, there are five important steps to consider.
1. Foster culture
The biggest concern might be the need to maintain the unique, enticing and innovative culture that companies use to lure, keep and inspire top talent. “One of the reasons for all the large campuses was the idea that innovation and collaboration only happen in person – or happen more effectively,” said Grant Thornton Cyber Risk Principal Lindsay Hohler.
“So, companies need to think about how they are going to keep fostering that spirit, looking at the tools that they’re going to use,” Hohler said. Remote workers have employed more video conferences, but tech companies are likely to explore other collaborative tools. “They need to make sure that innovation can be promoted and also that they have the appropriate security and privacy controls in place to protect the organization.”
“Collaboration solutions are going to start to house the most sensitive information of the organization.”
2. Train collaboration
Some of the new remote culture will require ongoing training. “They’ll need to increase training and awareness campaigns – not only in how to use technologies for remote collaboration, but how those technologies can be leveraged, which ones they can use, and which ones they can’t,” Hohler said.
“Then, they’ll need to do ongoing assessments of the security and protocols around those tools,” Hohler added. “Because those collaboration solutions are going to start to house the most sensitive information of the organization.”
3. Monitor interactions
Security is a critical and familiar concern for technology companies. But remote work adds not only another layer of security – it might require a more proactive approach. Companies might need to increasingly employ technologies like data loss prevention (DLP) to monitor live data use to help detect and prevent potential breaches before they happen. “It might be important for them to consider some of their surveillance activities and ask ‘How do we more effectively use DLP and those types of technologies to monitor traffic and how information’s moving across the network?’” Hohler said.
“At the same time, you need to make sure that you let our employees know that you’re increasing that type of surveillance, closely monitoring how they use their laptops, how they’re sharing information and where it’s being shared. I think DLP is something that we’ll see companies increasingly consider as remote work continues to increase,” she said.
“Eventually, the greater acceptance of remote work will allow greater adoption of the gig economy where employees can work for several employers”
4. Reassess employee allocations
The success of remote work has thrown the 9-to-5 workday into question. Time spent in two rush hours, with the costs of parking, lunch and more might not be a necessity for productivity – it might instead be considered a hindrance to productivity. Time is at a premium for many technology specialists, and productivity is essential to maximize profits.
Technology companies can take advantage of remote work by factoring out daily traffic jams, minor illnesses and other factors that limit on-site work. Companies can also take advantage of the gig economy, Waterfield said. “Eventually, the greater acceptance of remote work will allow greater adoption of the gig economy where employees can work for several employers. Dead time is not only a lost opportunity for revenue, but an additional sunk cost. Progressive technology companies will find creative ways to allocate employees whose skills are needed on a part-time basis, making the employees less of a liability and more of a revenue generator. I also believe employees will start looking for ways to work for multiple employers as a way to better protect themselves from lay-offs or furlough,” Waterfield said. “A lot of tech specialists are very much problem-solvers and, if you let them explore multiple interests, you’re going to excite them more as an employer and allow them to more fully develop their skill set.
Of course, such arrangements raise related questions, including how to handle enterprise security, employee benefits and taxes.
5. Reassess tax obligations
Part-time and full-time remote work introduces fundamental tax questions, especially for employees who live in a different state or city from a company’s offices: Where should pay be taxed? States have different tax rates, and different laws on inter-state employment. There are additional local income taxes in some cities, like San Francisco, but not in surrounding towns. When employees are working from new locations, companies need to reassess their tax obligations. “The allocation of revenue will change, and the withholding tax for your employees will change,” Waterfield said.
On the customer side, what happens to a technology company’s sales tax nexus if it sells a solution as a service to a client with remote employees around the country?
“This is where your hair starts to hurt,” Waterfield said. “We used to have clients whose customers had eight to twenty offices, and our issue was determining which office received a taxable service or good. Now, the taxable service or good may be received in houses in 50 states, depending on remote work adoption. This could materially affect the assessment of sales tax, as well as the apportionment of revenue for income and gross receipts purposes.”
Companies face increased scrutiny of transaction reporting, which will complicate their ability to ensure their tax records are auditor-ready. It also means that taxes might factor into the cost of hiring one employee over another. “Companies already consider taxes in placement of a business location – when you’re opening call centers, you don’t open them in Manhattan. You base it on the cost factors. So, companies could just carry that downstream a little further as to the remote location of the employee.”
As technology companies look to the future of remote work, many will take steps to heighten their awareness and expectations of employees.
“Many tech companies haven’t closely tracked where their employees worked or traveled in their tax records,” Waterfield said. “I think states will be far more observant of where employees are physically working, compared to before when states rarely asked for home locations of employees or the number of days worked in each location.” But, remote work could also mean flexible hours and greater availability that will let technology companies expect more from their leading specialists. “Employee availability will be heightened” said Waterfield. While employees will still need to take time off, they will be able to flex their schedules and accomplish projects without needing to take full days off for brief personal needs like appointments, or when weather is an issue.
“I think your biggest benefit for the employer is possibly a kid’s worst nightmare: No more snow days!” Waterfield said.
By taking advantage of greater flexibility and non-traditional work arrangements, technology companies have a chance to do what they do best – innovate before the competition.
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