Lucy advises on a full range of employment issues with a focus on legal and strategic advice on redundancies/restructuring; sensitive terminations and discrimination.  Lucy leads Lewis Silkin’s Future of Work initiative, the Future of Work Hub an award-winning future of work blog.  The Future of Work Hub is a community insight sharing and resource site that helps businesses navigate an uncertain and rapidly changing landscape and prepare for the future of work.

PODCAST TRANSCRIPT

[00:00:08] - Doug Foulkes
Hello and welcome to episode 49 of The Future of Work, the podcast that looks at every aspect of work in the future. As always, I'm with Claire Haidar, the CEO of WNDYR. Claire, this is the third part of our chat with Lucy Lewis. What are we talking about today?

[00:00:24] - Claire Haidar
Doug, we brought Lucy onto the podcast specifically to turn a very sharp focus onto employment law and the legislation surrounding employment law and how that's evolved and changed over the last two years. And in this third segment of the podcast, we're specifically talking to Lucy about frameworks and decision making criteria that business leaders can use to navigate this area. Because we're in a period of real evolution that's happening in real time. You know, legislation tends to take longer than what the actual demand and the need on the ground is.

[00:01:01] - Claire Haidar
And so, OK, you know, certain legislation is in flux. It's not fully changed yet. It's geographically very diverse in how different countries are approaching this legislation. What can business leaders do today to frame it and actually provide a methodology for their team members, particularly people in their people teams, their shareholders, to actually think about this and frame it and make decisions moving forward during this period of flux and change?

[00:01:31] - Doug Foulkes
Let's head on over to Lucy.

[00:01:33] - Claire Haidar
Lucy, where we really want to take the conversation next is very much about the practical application. So you've shared with us kind of like, the guardrails or the frameworks that business leaders can be using to think this through. You've outlined the grey areas in employment law, which everybody is navigating right now. If we can turn more to OK, so what now? Let's take these three legal issues that you've just raised, and because these things haven't been defined at a legislative level. What is the correct and legal thing to be doing right now?

[00:02:11] - Lucy Lewis
That's a particularly good question, because correct and legal might not necessarily be the same thing. I mean, the only legal, right legal answer is that you have to take local advice, and it's one of the challenges for us. And one of the challenges for employers, actually. Because if you've got 100 employees, that five of them want to go to different countries, you end up significantly incurring costs and often duplicating costs because the position in Germany is likely to be different from the position in France. And that would be different than the position in Australia and the U.S.

[00:02:43] - Lucy Lewis
So the right legal thing is to take advice locally on how you navigate the risks. We are seeing an increase in businesses that offer employer of record type services. And by that, I mean that they say, "Look, we can make all the challenges go away by essentially being your employer and managing the legal risk in all these countries." And those things often sound very attractive. But actually, you'll still generally as the employer take on all the liability and if you don't go into those with your eyes open, it's a little bit of "If it seems too good to be true, it probably is too good to be true".

[00:03:20] - Lucy Lewis
Those organizations aren't able to shortcut some of the challenges we're seeing.

[00:03:25] - Lucy Lewis
We are seeing them being used as a solution because really, as I said, it's about risk management. So looking at those kind of organizations and is that one way to address the risk, looking at just accepting the risk? And as I say, there are businesses definitely taking a view that will allow employees to go for a short period of time subject to the kind of role they're doing. So from a tax perspective, certain roles involve greater risk. So if you send your manager or allow your managing director to go and work in France, for example, having a very senior managing... employee on the ground, that looks and feels much more like you're essentially setting up a business in France, and that's when you start to be taking a risk in relation to tax.

[00:04:11] - Lucy Lewis
So that's quite a different position than if you've got, I don't know, an H.R. Administrator, for example, that wants to go and work. So you're taking a risk judging by the type of role and the person and what they're going to be doing there and allowing them to go within certain parameters. And then the other risk mitigation is actually being careful about which of the countries you allow people to go to. So some are much more difficult than others.

[00:04:36] - Lucy Lewis
For example, businesses that are based in continental Europe, travelling within continental Europe is actually pretty easy. So if you are a French employee wanting to go and work in Spain, some of these challenges are able. Not all of them, but some of... these challenges are much easier. We haven't talked about data processing and sending data. But you know, those things are much easier. So looking at where the risks lie in relation to the types of role, the length of time and the countries that people want to go to.

[00:05:05] - Lucy Lewis
But it is about risk mitigation, so businesses wanting to do this have to accept that the starting point is that it's pretty certain to involve a degree of risk and how much risk you're willing to take actually becomes a strategic business question.

[00:05:20] - Doug Foulkes
You see, from my side, from my sort of more simplistic view, it seems as if the company is taking a lot more of the risks than, say, the employee or the individual. So how does leadership shift their mindset to adapt to this because the world is going more and more global? How does that work?

[00:05:39] - Lucy Lewis
You know, it is a good and difficult question. What we've been focused on is where you've got employees in their home jurisdiction that want to travel. But obviously... what we haven't talked about is just the globalization of workforces. So you know, nothing stops any business now looking to recruit for talent outside their local market.

[00:06:03] - Lucy Lewis
And one of the really exciting things actually, I think, to come from the pandemic, is the realization that the opportunity we've got to hire people is actually not just the people that can commute to the office that I actually happened to be sitting in, but more broadly, talent across the world that we can do much more of this job remotely. Possibly, not all of it. Open debate about how much collaboration and office space we need, that's a topic for a whole other podcast.

[00:06:28] - Lucy Lewis
But you know, we can do this, a lot of this remotely.

[00:06:31] - Lucy Lewis
So if we leave aside the idea of employees from your home jurisdiction who want to travel somewhere else, actually recruiting people, just going out and looking for talent on a global basis, that is something that we're seeing more and more. We'd seen a bit of it pre-pandemic, but it tended to be very role based. So you know, lots of call center roles, lots of finance roles. What we might call back office functions were outsourced to other parts of the world, and we're seeing that the next phase of that evolution is actually our search for talent should be much broader and possibly can be more cost efficient. So we should be looking at those markets.

[00:07:09] - Lucy Lewis
Often what businesses are doing, they're looking actually in the markets where they've already got a presence. So we might, for example, have outsourced part of our back office functions to Poland. But actually, now we've got a presence in that country. We should be more proactively looking for talent in that country because the infrastructure costs are already absorbed. So let's look more broadly in that market for talent. We're seeing that much more regularly.

[00:07:35] - Lucy Lewis
Some of the legal challenges are still the same. So if you take a totally global approach to talent and you don't already have a presence in Germany, for example, then you end up with infrastructure costs in employing somebody in Germany. But we're definitely seeing the idea that our search for talent is a much more global one. We're seeing that get quite a lot of traction. It's not just about outsourcing parts of our business functions to less expensive places. It's about looking for talent on a global basis.

[00:08:06] - Claire Haidar
And Lucy, to the exact point that you're saying, it's idealistically, it's great when you're talking about it around the boardroom table. The poor H.R. person who has to go and make it happen. I actually overheard our head of people who's my co-founder, the other day, talking to one of our clients who knows that we've built this global company from day one. You know, we recruit from all over the world. And their H.R. was actually talking to Tracy, asking her, and she was... her response to the client was, "I still feel traumatized after trying to set up business in various countries." You know, that's her totally off the cuff, one H.R. person to another H.R. person, being very blunt about what it was trying to navigate that.

[00:08:54] - Claire Haidar
And I saw that playing out in the background because, you know, I saw the threads, I saw the communication happening and it was a painful process. I mean, there were some countries that we were trying to set up entities in, in order to be able to employ people, and it took us more than 27 months. That's painful. And those issues haven't gone away.

[00:09:13] - Claire Haidar
So if we bring everything together in the conversation that you've shared with us, it's idealistically, on the surface it looks very simple. When you actually peel the onion back and look at the complexity of what needs to happen, it's not an easy issue. And as you say, hence having to take local advice because there are nuances and they're big.

[00:09:36] - Lucy Lewis
No, I mean, that's definitely right. I mean, you are right. You say that nuance isn't that big. I mean, they're often big... problems. I think the businesses that do this successfully though, and this is where we're seeing change, are ones that identify key markets or key parts of the world they want to be in. They look at saying... I gave the example of somebody that's outsourced their call center to Poland or their finance function to India, where they've already got a presence.

[00:10:04] - Lucy Lewis
Generally, that presence has come from offshoring services and then they think, "Well actually, let's focus on the markets where we've already got a presence, where some of those infrastructure issues don't arise and let's really identify talent in those markets. Let's look beyond whatever the purpose of setting up that back office function was, and actually let's look more broadly for..."

[00:10:25] - Lucy Lewis
Often, I.T. programming talent, those are one of the areas that we see quite a lot. There's a real shortage of skills across lots of countries. That's an area of real talent drain. I think that the answer to it is trying to step one, take one step back from the ideological approach and thinking, "Well, let's identify the key markets or the key countries where we know this talent with the kind of skills that we want, and trying to then put down roots in a few places and build on that."

[00:10:50] - Claire Haidar
Yeah, rather than seeing the whole globe as a potential source. Yeah. Sound advice.

[00:11:04] - Doug Foulkes
But don't you think then that maybe... I mean, India is a very good example of many countries that have taken that step to offer themselves to the world, in essence. It's going to take maybe one or two big players to make it that much easier. And then other countries will be more willing to jump on board or to get involved because otherwise they're missing out.

[00:11:22] - Lucy Lewis
Yeah, it's a really insightful observation because for a long time, we've sort of thought that will happen. And I wonder whether the pandemic and the kind of the digital nomad push might make it happen. It's, you know, we'd expect it as we saw that drip drip drip of digital nomad countries that we then suddenly see everybody trying to get on the bandwagon. It's been slower than we expected. We've talked about this before, but it is the point that a lot of this stuff: migration, employment, protection, is very, very embedded in politics and some of it global, but some of it national.

[00:11:58] - Lucy Lewis
And there is actually still a surprisingly high level of protectionism.

[00:12:06] - Lucy Lewis
We saw that in the U.S., particularly under the Trump administration, a high level of U.S. Protectionism. We thought for a while we might be entering a global era where we'd see more national protectionism. I think that hasn't necessarily happened. Possibly the pandemic has helped that. So these remain highly, highly, highly political issues. And I think that is the big barrier to change even one or two big economies getting on the bandwagon. I'm not sure we're going to shift the dial quickly.

[00:12:36] - Claire Haidar
Thank you so much for coming on. It was truly... I learned a lot in this conversation with you, and I know that the material is going to be spot on for our audience. So thank you for that.

[00:12:47] - Lucy Lewis
Thank you, and thank you for having me.

[00:12:50] - Doug Foulkes
And that is the end of this episode of The Future of Work. Let us know if this shorter split version of our podcast is working for you. You can catch us on Spotify, Google or Apple Podcasts or on our website. That's WNDYR.com. From Claire and myself, we'll see you soon.