May 2021

Is WFH all it’s cracked up to be?

By: Odyssey General, Outsourcing
Tags: ACCOUNTANTS, accounting outsourcing, accounting outsourcing australia, australian accounting firm, australian outsourcing expert, outsourcing guru, Remote working, work from home, working overseas

In 2020, Aussie startup Atlassian started allowing employees to work from home permanently, and Atlassian employees will no longer be required to return to the office when an easing of coronavirus restrictions allow them to do so.

Fast forward to 2021, and Atlassian has recently announced staff only need to attend the office four times a year.  It’s currently regarded as a “radical move”, with employees’ freedom to work from anywhere in the world is integrated into the Atlassian culture. Whilst many firms seek to centralise their operations, Atlassian has moved to enabling their workforce to work in any country where Atlassian has a corporate footprint (a corporate entity), in a policy known as “Team Anywhere”.

For Atlassian, talent just doesn’t happen to need to exist within 50 kilometres of an existing office, with pay based on labour costs in the region a worker is based in, rather than the more commonly used measure cost of living.

It’s not all smooth sailing, as there are concerns that “People taking advantage of this two or three days at home maybe are disadvantaged in terms of career progression, which we know generally falls on to minorities and women”, and there seems some reluctance of staff to go all out and work from home with “the company is estimating it will have around 50 per cent office attendance based on surveys of employee sentiment.”.

So what are the takeaways for Australian accounting firms:

  • WFH is still regarded as a radical step
  • Even when full WFH is offered, in a similar manner as unlimited annual leave, staff still are reluctant to fully explore the WFH opportunity, unless it is “one in, all in”
  • For WFH when the employee “moves” to another country, the pay is based on labour costs in the region the worker is based in.

The last point is remarkably interesting, and seems to preclude (for example) an Australian worker moving overseas (to say Bali) and enjoying an Australian salary whilst living overseas. This indicates the trend may be to reduce a person’s salary depending on the location they reside.

And this makes sense. Over the past 10-20 years the foreign expatriates have been replaced by cheaper alternates (e.g. from Singapore or Malaysia) who will operate on a lower remuneration.

Given the fact employees will be paid at a local rate of pay, it makes sense to engage workers who are culturally in synch with the environment in which they operate, and engage workers through a locally formed entity.

The Atlassian model, whilst regarded as radical, gives some indication of how the future may look in a post pandemic age. Workers may move anywhere under a “Work from Home” arrangement, but at the same time expect their remuneration may be adjusted to local conditions. This reduces (if not eliminates) the massive salary variations between locally and foreign employees, and reduces the desire to work in a lower cost country.

The future of WFH is interesting, and it seems that moving to lower costs countries will not automatically come with massive tax savings and opportunities for saving money. It may be then that there is less demand for WFH outside the home country, which will maintain the current status quo.

We hope you’ve enjoyed our blog, and if you’d like assistance with your Australian tax compliance workload please reach out to us.

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