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WORKATIONS AS A BENEFIT


Key insights from leading companies allowing their employees to temporarily work from abroad


by Pieter Manden, LLM MBA


Employees increasingly request to temporarily work from abroad. Although employers generally would like to allow this, they struggle with defining a company policy that balances the employee's wish to work from abroad on the one hand, with employer's interests such as tax and legal compliance on the other hand. Since October 2022, the Workation Alliance and WorkFlex have been regularly bringing people together to discuss their experiences with temporary work from abroad. In November 2023, 35 HR and GM specialists from leading DACH companies joined the third exchange round. In order to allow other companies to benefit from the best practices shared in the exchange round, this report includes a summary of the key insights.


Sincere thanks to the exchange round participants who represented, amongst others, the following companies:


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"Workation" sounds English, but is it actually German?

The word “workation” is a blend of the words work and vacation. It refers to the situation where an employee spends some time working during a vacation - or put differently: an employee works from a place where one would usually spend the vacation. Work, vacation, and workation: they are all clearly English words. However, workations are very popular in Germany. Within our company, it seems that workations are mainly a popular trend in Germany”, says Dr. Felix Stoecker, Legal Director Central Europe at Robert Half. “When I am talking to colleagues from other countries most of them know the term "workation" but the request for workation is not as strong as in Germany, maybe due to a different media coverage.” This raises the question of whether, although it sounds English, workations may be in fact a rather German phenomenon.


Although 19% of the participants have a similar experience to Dr. Stoecker, the majority of the participants have a different one; 67% answered the question whether workations are mainly a German topic negatively (remaining 15% answered “Don ́t know”). Tobias Nehls, Head of Global Mobility Management at Siemens: “Workations within Siemens acrkeear very international topic. We are currently piloting this benefit in several countries, but employees from many more have shown interest. An example is that we are currently looking into the United Arab Emirates. Most of the employees there have an international background, so implementing this benefit would allow them to spend some more time in their countries of origin.”


Family visit has become the key use case for workations

Mr. Nehls ' remark touches on workations being used for family visits. One year ago, the primary use case for workations was, as discussed earlier: working from a vacation destination. International employees visiting their countries of origin was considered a secondary use case.WorkFlex data on 15.000 workations in 2023 already insinuated the importance of this use case. The pie diagrams on the right show that, although international employees only make up for 22% of all employees in the data set, they account for 39% of all workations requested.



International employees request 2x more workations than national employees

The participants of the exchange round were asked which percentage of workations within their companies were for the use case of family visits. The responses were surprisingly high. Out of the 12 companies that have this data available, only two mentioned a number below 50%. This means that for 10 out of 12 companies, family visits have by now become the primary use case for workations. Within four of the companies, this use case even makes up for the vast majority (80% or more) of workations.

One of these companies is Delivery Hero. “We were one of the early adapters of a workation programme, especially because of the international employee population in our Berlin HQ”, says Małgorzata Miaśkiewicz, Senior Manager Global Mobility. “And from the very beginning, it was indeed these employees who heavily utilized this benefit. In 2022, approximately 60% to 70% of the workations were used for family visits. In 2023, our data shows that this number has risen well above 80%.”

Anna Luisa Grebe, Business Development Manager at WorkFlex, chose the topic “Megatrend Workation” for her thesis at the Berlin School of Economics and Law. Her research shows that the value of workations indeed differs between national and international employees. National employees consider it a “cherry on top”, internationals rather see it as a “game changer.”


Workations are here to stay, yet they aren't

Because workations are so heavily used for family visits, most of the companies represented in the exchange round do not use the term “workation” anymore. Preferred alternatives include "international flexible work" and "remote work from abroad". The going term in German seems to be “Mobiles Arbeiten im Ausland”. For the sake of the Workation Alliance and this white paper, it is unfortunate that these are rather descriptions than they are a true name for this phenomenon. For now, we will continue to use the term “workation”, but it seems that this name is not quite here to stay.

Fortunately, that does not apply to the phenomenon itself. To the question whether workations will become a long-term benefit, all participants to the exchange round answered with a clear “yes”. Iaroslav Mynov, Director Cross-Border Solutions at Karl Storz Group: “Regardless of whether they actually use it, employees love being offered the flexibility of being able to work from abroad for some time. It is up to us, as employers, to put the right policies and processes in place to manage them.” Carmen Andronesei, Lead cross-border at Allianz, adds: “Since Allianz has introduced it, employees made use of this benefit almost 4.500 times. Under the condition that it is managed compliantly and efficiently, a benefit with such a high adoption rate within such a short timeframe clearly is here to stay.”


Workations have quickly become a Gen Y and Gen Z essential, thus they are truly a benefit of the future WorkFlex data supports this conclusion. The graphic on the right shows the distribution of workation requests, distributed over the employees ́ birth years. Gen Y employees (pink) account for more than 75% of all workation requests. The PwC Germany study “Zwischen Wünsch und Wirklichkeit” (available at www.pwc.de) shows that more than 80% of Gen Y and Gen Z considers the possibility of going on a workation (very) important when looking at new job opportunities. As Gen Z joins the workforce, it is expected that this group will request at least as many workations as their Gen Y peers do.



Workations as part of the bigger flexible work trend

Workations have been on the rise, just like many other flexible working arrangements. Many companies have introduced arrangements for hybrid work, and/or have adjusted their benefits packages to the increased out-of-office work activity accordingly. This is also the case for many of the companies represented in the exchange round. More than 60% of the exchange round participants confirmed that their workation programme is part of a broader future of work package within the company. Moreover, half of the participants stated that the shift towards more flexible work within the company was recently taken (very) seriously. “

Companies should indeed take flexible work very seriously”, says Dan Bieler, Principal Analyst “Future of Work” at Forrester Research. “Our research shows clearly that the back to the office movement is not working. Employers are better of paying attention to make flexible work work better. An important aspect of this is to ensure that employees are well equipped for the future of work, both in terms of soft- and hardware. Additionally, employees should be (made) aware and trained for a different way of collaboration and management. Examples of topics to cover in this regard are mutual trust, asynchronous collaboration, and measuring productivity.”


Compliance remains the key challenge

There is a lot to say in favour of workations. And clearly, the participants of the exchange round did not take part because they are so strongly against them – on the contrary. Yet, they are not blind for the challenges connected to workations. This was also part of Mrs. Grebe ́s research into this topic: “For employers, the key challenge around workations remains compliance. There is the great variety of tax and legal areas that are relevant. These vary from corporate tax to social security, and from labour law to data protection. It is difficult for in-house HR or GM teams to cover all these areas for all potential workation destinations without significant support of expensive (tax) lawyers.” Companies such as WorkFlex can close this gap. They provide a more cost-efficient solution to assess the compliance topics and to implement the compliant solution, for instance by requesting A1-certificates and doing PWD- notifications. Because of the compliance challenge, workation policies at companies still strongly vary. Risk-averse companies may only allow shorter workations to EU countries only, whereas more risk-affine companies may permit longer workations to non-EU countries as well. WorkFlex looked into the destination and duration limitations in workation policies of more than 100 companies.


The pie diagram on the right shows the destination limitations. More than half of the companies allow workations to EU destinations. An EU+ policy, as implemented by 14% of the companies reviewed, allows workations to EU countries and a limited number of additional countries. These countries often include Switzerland and the United Kingdom. Many policies make an exception for the employee ́s country of origin, too. This supports family visits, and because nationals usually don't need a work permit there, it's more acceptable from a compliance perspective.





The graphic above shows the duration limitation of the 100+ companies reviewed. It varies from 10 to 183 days per year. Two companies that, given their size, have a surprisingly progressive policy are Bosch and Merck. Bosch currently allows up to 54 days per year, Merck even up to 60 days. Maike Mol, Senior Expert International Careers at Merck: “The benefit is greatly accepted amongst employees. Young professionals use it to explore the world, and senior colleagues use it to spend some more time at their vacation home abroad. For potential new joiners, our indeed progressive 60-day policy is a signal that Merck is a modern employer and a great place to work. In order to manage the compliance risks, we assess each workation request individually and take measures where necessary and possible.”


Best practices to take away

Creating a workation policy and putting a process in place that includes an individual assessment of each request, are two best practices amongst the exchange round participants. When drafting the policy, it is important to pay special attention to the international employee population of the company. After all, their family visits are likely to be the primary use case of the programme. A fourth best practise would be to integrate this exercise into a broader flexible work programme. Finally, and probably the most important best practise, is to keep an open mind. Workations are new for the employee as well as for the company. They are new in general. It is difficult to exactly know what employees want, and it is also difficult to exactly understand the compliance implications. Therefore, HR and GM specialists should ask employees and managers for feedback and try to be part of the discussion with peers and specialists from other companies. It is great to see that the Workation Alliance again provided an excellent platform for this.


Do you want to learn more about the WorkFlex platform?

Would you like to learn more about offering workations as a benefit, the exchange round or WorkFlex? Reach out to Pieter Manden (pieter.manden@getworkflex.com)


Pieter Manden LLM MBA. Pieter is founder of the Workation Alliance and co-founder of WorkFlex. He is a Dutch certified tax lawyer specialising in compliance around modern mobility. Pieter has 13 years of professional experience with PwC in the Netherlands and Germany. Before co-founding WorkFlex, he was Director responsible for the PwC Germany’s Remote Work proposition.

Download the report here in German:


DE Exchange Round Workation als Mitarbeiterbenefit November 2023
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By Pieter Manden LLM MBA *


By Pieter Manden LLM MBA *



By Pieter Manden LLM MBA *

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