Attracting and retaining top talent inside the borders of the UK has shot up the priority list for firms, with a sharp rise in cross-border remote working shifting the make-up of the business landscape in the wake of the pandemic.
That’s the top line for a new study from the City of London Corporation and EY, which reports 75 per cent of companies nationwide have bumped talent retention to ‘medium to high priority’ status on their respective agendas.
Cross-border remote working figures are being inflated by a global skills shortage, according to the report, with high demand for flexible working hours from employees further driving the shift in work culture.
Benefits of remote working were well documented during the peak COVID months, when everyone bar frontline and essential workers were required to work from home or furloughed.
Better work-life harmony, lower costs of living and higher productivity were all touted as huge upsides to not having to commute into the office every day.
However, where there are pros there are also cons – and costs for employers.
A poll of 151 respondents across the financial and professional services industry found that the biggest challenges and risks facing firms that might allow cross-border remote working relate to higher tax costs and additional filing and reporting requirements (50 per cent), restrictive immigration policies (16 per cent) and cross-border regulatory oversight and barriers (18 per cent).
An additional area for consideration is whether local market professional qualifications are recognised across borders, according to the report.
Policy Chairman of the City of London Corporation, Chris Hayward, said: “Cross-border remote working is rapidly rising up the business agenda. This trend poses both challenges and opportunities for the UK financial sector.
“On the one hand, we want firms to be able to offer the flexibility that globally mobile talent demands. On the other, we need to retain the benefits of financial and professional services sectors clustering in one place.
“Above all else our findings shows that to keep the UK competitive and a global leader in financial services, we need an immigration system that encourages highly skilled people and high growth businesses to choose to locate and invest in the UK. This will complement investment in domestic skills.
“We need to seize the opportunity for the UK to shape the development of cross-border remote working frameworks as demand from workers and firms continues to increase.”
Regulation was identified as the primary focus for firms pursuing a hybrid cross-border model, with the report stating that “coherent global regulation for cross-border remote working is largely non-existent.”
It recommends that the UK should be exploring how to lead innovation, shape multilateral dialogue and ensure international competitiveness as these new working models become increasingly mainstream.
A majority (96 per cent) of the businesses polled believe the UK government should take action to support employers in meeting cross-border remote working demand.
The recommendation is to make unilateral changes to UK rules to enable inbound cross-border remote working as well as multilateral and bilateral changes to the UK’s key trading partners.
Seema Farazi, lead author of the report, and UK Financial Services Immigration Partner at EY, said: “The future of work is here now, and we must innovate to ensure the UK remains at the fore of workplace advancements.
“How and where people work and what they will compromise on has been irreversibly altered since the pandemic, and firms need to be empowered to so they can respond to employee demand for greater flexibility.
“The risk of doing nothing is potentially significant and could lead to a reduction of the UK’s competitiveness on the international stage when it comes to attracting and retaining top global financial talent.”