“The number one problem with a lot of remote companies right now is that they are misclassifying their employees as contractors. Misclassification may attract not only a heavy penalty, but it can also lead to the deregistration or even the shutdown of a company.”
– Bhagyashree Pancholy

Are you and your team adjusting well to a remote work environment? According to surveys taken at the beginning of the Covid-19 pandemic, employees seem happier working from home. It’s obvious why: They avoid long commutes and spend more time with their loved ones. And there are benefits for companies too, as they save a lot on rent, electricity, and other office-maintenance-related costs.

But experts are raising the warning flags. Companies were able to react quickly against the emergency of the pandemic, but to permanently embrace a remote work environment they will have to transform all workflows and structures previously taken for granted: labor laws, remote work policy guidelines, employee rights and benefits, and managing borderless —and culturally diverse— teams.

Bhagyashree Pancholy, an expert on remote work and CEO of All Remotely, came on the Going Global podcast to talk about how she helps co-located and office-based teams transition to remote work environments.

What does a “remote work environment” really look like?

Before the pandemic, “work from home” usually meant you were sick or had permission from your manager to work remotely to take care of an obligation, such as doctor’s appointment.

A “remote-first” strategy, on the other hand, essentially means that companies may have a co-located team, but they prefer people who work remotely. “Fully remote” is having no physical office or headquarters anywhere in the world. “It is still a very ambiguous thing because none of these definitions are written anywhere, and this is how every company is interpreting them on their own,” said Ms. Pancholy.

And then comes the most challenging scheme: hybrid teams. This is defined as having “…some people working from offices and some people working remotely. And this is the most challenging type of workplace — and the one I see that’s going to be on the rise.”

Not everything is greener on the remote work side

As remote work becomes standard, human resources managers may think that they can hire people from all over the world without establishing a legal entity in each country. But Ms. Pancholy, who has managed remote and hybrid remote teams as big as 600 members across 12 time zones, said it’s not that simple.

“The number one problem with a lot of remote companies right now is that they are misclassifying their employees as contractors. Misclassification may attract not only a heavy penalty, but it can also lead to the deregistration or even the shutdown of a company.”

Using virtual communication as a regular part of a remote work environment has forced employees to merge their personal lives at home with their professional day-to-day work lives, presenting unexpected challenges. For example, we’ve all experienced scenes like these: the cat in front of the webcam, the crying child in the background, the webcam that we thought was off but, whoops — it wasn’t!

Another side effect of remote work is how it affects us — and our families — emotionally and psychologically. Ms. Pancholy stated that remote work is different for everyone depending on where they live.  In a two-story house in the suburbs, working from home may be a positive change considering you no longer have to commute. But in many developing countries, a year-long quarantine with the whole family indoors might bring people to their limits.

“It has definitely taken a toll on me and on everybody else psychologically, but since I was already used to it, it was easier for me. But I can understand why it’s not that easy for a lot of people,” said Ms. Pancholy.

“In emerging economies like Latin America, Asia, and Africa, the Internet is still kind of a luxury. Many young people are renting out an apartment with their friends — just imagine the noise level of four or five guys living in one apartment when everybody is on a Zoom call. People may have their own social and cultural requirements, like large families, children, and old parents in the house.”

What kind of company do you want to help build in a remote-first world?

Remember the days when startups could attract top talent with ping pong tables, free beer, and sleeping pods? Well, those days are gone too, Ms. Pancholy said, as remote works shifts the interest of workers to more relevant perks.

“People have started to realize that health has become a priority for all of us. They want benefits like health insurance, some sort of medical plan, pension funds, and childcare. The companies must figure out that, if they are indeed turning remote and saving a lot of money, they should reinvest that money in healthcare plans or some sort of benefits or compensation packages for their employees.”

It’s simple: If your company chooses not to offer these kinds of benefits, professionals may find others that will. It will be a crucial differentiator, Ms. Pancholy states.

“I’m seeing a lot of companies that now want to be ethical and respectful of their employees. They are reaching out to these Employer of Record services because they want to treat professionals with respect and recognize them as employees to comply with the law. They don’t want to misclassify employees and contractors anymore and are setting up good packages for them. I strongly recommend this because lawsuits are going to be at least 10 times more expensive if something happens.”

Transform your company for a borderless workplace

Remote work has made companies realize they can hire anyone, anywhere. There is a global talent pool they can tap into. That means a lot of people with specialized skills from emerging countries will get hired.

“People are going to embrace the hybrid system of working. They want more flexibility. They want to work from wherever they want to work, whenever they want to work,” said Ms. Pancholy. The question is, how will companies transform their policies and processes to take advantage of all the benefits of remote work?

[bctt tweet=”The question is, how will companies transform their policies and processes to take advantage of all the benefits of remote work?” username=”globalpeo”]

Ms. Pancholy is currently combining her experience with SaaS marketing, remote operations, and HR to help Flatworld grow as one of the world’s first remote recruitment agency for developers, while simultaneously spearheading the remote work revolution in India through her consultancy, AllRemotely.

“I collaborate with companies that are working in emerging economies because I understand their cultural background. Many people don’t understand that they are in this race to define the company culture. You need to overhaul your processes, your documents, and how you work as a team, but there’s no magic. It starts with hiring the right kind of people, and it ends at scaling the company. So, the entire process needs to be changed. And that takes time. That takes a lot of time,” said Ms. Pancholy.

Learn more about AllRemotely here.

Listen to the full episode on remote work environments, and how to build better remote teams here.

Download The Complete Guide to Building a Remote Global Team – a free resource to help your company make the switch to remote.

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