Workation

Olivier Meier
5 min readMar 29, 2024

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A new essential benefit to attract and retain international talent?

Photo by Ethan Robertson on Unsplash

The recent Temporary International Remote Working Spot Survey* conducted by Mercer highlights a remarkable shift in the acceptance and adoption of workations, driven by employee requests.

What was once considered an exception has now become an expected benefit, and organizations have the opportunity to leverage this trend to enhance their attraction and retention efforts.

However, there are challenges to overcome, such as tax liabilities and compliance issues. Managing numerous workation requests also represents an additional burden for HR teams that have limited resources and insufficient technology support.

Despite these challenges, it is clear that international remote working is here to stay. HR professionals play a crucial role in shaping the narrative around workation, championing the benefits of work-life integration, and positioning organizations as pioneers in promoting employee well-being, productivity, and engagement. To fully unlock the potential of workation, HR professionals must think beyond traditional boundaries and embrace innovative approaches to support and empower employees in their remote work journeys.

Defining Workation

Workation refers to the practice of temporarily working remotely from a different location, often in a foreign country, while still fulfilling work responsibilities. It combines the elements of work and vacation, allowing employees to experience a change of scenery and immerse themselves in a new environment while maintaining productivity.

The term “workation” itself encompasses a dual meaning that captures the attention of employees but can also blur the boundaries between work and leisure, leading to both interest and criticism.

Although the concept of workation may evoke images of individuals in exotic destinations, its goals are to provide employees with an improved lifestyle and address personal and family-related concerns.

A growing trend

The popularity of workation is on the rise, with an astounding 78% of companies* now incorporating this practice as a regular part of their operations or on a case-by-case basis.

This upward trend is not limited to specific industries but rather reflects the increasing desire among employees for flexibility and a healthy work-life balance.

According to our survey, nearly two-thirds (58%) of organizations anticipate a significant increase in requests for workations in the coming years, with only a mere four percent predicting a decline.

This shift in mindset signifies a growing acceptance of international remote working as a long-term practice rather than a passing trend. Embracing workations not only allows for a better work-life balance but also aligns with the evolving hybrid working models that many organizations are adopting.

Exploring drivers

The surge in workations can be attributed to several key drivers. One of the primary drivers is the need for flexibility in addressing employees’ unique situations, which was identified as a key driver by 71% of respondents*. By offering temporary international remote working options, companies can accommodate individual needs, such as personal commitments or health concerns, while still ensuring productivity.

Another significant driver is the focus on improving employee satisfaction, with 61% of respondents acknowledging this as a motivating factor. Workations provide an opportunity for employees to experience a better work-life balance, explore new environments, and relax, ultimately enhancing their overall job satisfaction. Additionally, workations are seen as a means to address family-related issues, as highlighted by 62% of respondents. By allowing employees to work remotely from different locations, organizations can support their employees’ family needs, such as caring for dependents or accommodating dual-career households.

Interestingly, 51% of respondents also mentioned that market pressure and the desire to remain competitive in terms of benefits are driving the adoption of workation. A confirmation that workation is becoming a common benefit.

Mitigating risks

While workations offer potential benefits for employees, organizations need to be aware of the limits and risks associated with this practice. HR policies implemented to mitigate these risks include the establishment of a maximum duration for workation, usually 20 to 30 days per year. However, it is crucial to recognize that even with this maximum duration in place, some risks may still persist.

One such risk is the inadvertent triggering of tax liabilities for employees on workation, which can occur from the very first day in certain locations.
To further minimize risk, companies can impose restrictions on the list of allowed destinations and specify the types of remote work that can be performed. This also helps prevent employees from inadvertently triggering a “permanent establishment” tax liability in locations where the company does not have a legal entity.

Despite these guidelines, organizations need to conduct ad hoc compliance checks and maintain ongoing monitoring to ensure that employees and their companies do not find themselves in challenging legal or tax situations.

The process and resources challenges

Managing workations can present resource and process challenges for HR departments. While HR policies can help mitigate initial risks, ongoing compliance checks and monitoring are essential to ensure employees and their companies do not encounter challenging legal, tax, or breach of duty of care situations.

HR departments must allocate significant resources to handle the administrative tasks associated with managing workations, including reviewing and approving requests, providing guidance on tax and legal considerations, and maintaining accurate records. The use of technology can be a differentiator.

Additionally, HR teams need to collaborate with other departments, such as finance and legal, to ensure a comprehensive approach to managing workations.

Ultimately, the issues about workations are as much as finding time, resources and more efficient processes as ensuring compliance. The main question for HR is “To what extent can we allow and manage workation given our current resources and the expected benefit in terms of employee satisfaction?”

Clarifying the message to unlock value

The absence of a unified perspective on remote working, both at local and international levels, further complicates matters. Divergent opinions about the benefit of workation among stakeholders and lingering doubts regarding the performance of remote working initiatives can muddle the message and undermine the company’s effort in the employees’ eyes.

HR professionals face the arduous task of clarifying their communication strategies and refining their employee value proposition. Only by doing so can they harness the potential of temporary international remote working.

Sending mixed signals or creating difficulties for employees to understand the company’s policy undermines the credibility of the organization and may even result in employees working remotely without proper authorization.

Workation cannot just be an afterthought or a reaction to ad-hoc requests, it should be a key component of the talent attraction and retention strategy.

* International Remote Working Spot Survey, November 2023, Mercer

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Olivier Meier
Olivier Meier

Written by Olivier Meier

Exploring trends about people management, workforce mobility, globalization, work from anywhere and the future of work. www.linkedin.com/in/olivieraemeier

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