How beneficial is more flexibility for expats?
The rise of digital nomadism and remote working from abroad has brought about a new way of organizing work. While digital nomads are often self-employed individuals, their way of working goes beyond just work; it's a lifestyle. The same applies to remote workers who remain employed by companies. Their way of working requires a fundamental reorganization of the company structure. It's important to note that flexibility doesn't only affect digital nomads and remote workers but also all other employees.
Legislation promoting greater flexibility
Different countries, such as the United States, United Kingdom, Denmark, Italy, Netherlands, Germany, and France, have their own systems in terms of flexibility. The basic principle is to provide companies with more flexibility, primarily in terms of dismissals and recruitment. In countries facing labor shortages, new measures have been implemented to facilitate the recruitment of foreign talent. Examples include new visas in Germany and Japan, more flexible rules for obtaining residence permits in Slovenia, and a rise in the number of foreign workers in certain sectors in Taiwan. However, the health crisis has exposed the limitations of extreme flexibility in all these countries and others. Let's take a closer look at some of these cases.
United States
The American labor market is well-known for its high degree of flexibility. This flexibility is a considerable advantage in attracting workers, especially foreign talent. The United States offers various flexible work arrangements, such as remote working, regulated working hours, and the increasingly popular 4-day week among large companies. The "at-will employment" principle summarizes the American approach, allowing employers to dismiss employees without notice or justification. However, this principle is tempered by the Worker Adjustment and Retraining Notification Act of 1988 (WARN Act), which requires companies with over 100 employees to provide 60 days' notice. While the COVID-19 pandemic had an impact, it did not significantly undermine the foundations of this system.
Denmark
The Danish "flexicurity" model is widely recognized. On the one hand, it relaxes rules related to dismissals for companies. On the other hand, it provides greater security for employees and job seekers, particularly in terms of training and job search support. This "win-win" strategy aims to adapt to economic fluctuations. Other countries, like France under Emmanuel Macron's leadership since 2017, have been gradually moving towards greater flexibility by taking inspiration from the Danish model. However, critics argue that the Danish model has leaned more towards "flexibility" since the 2008 financial crisis. The pandemic also posed challenges, with over 50,000 employees being made redundant in Denmark between March and August 2020.
France
France has implemented its own version of "flexisecurity." On the one hand, it promotes flexibility through the Labor Code reform in 2017 (known as the El Khomri law) and the subsequent "Macron ordinances" that took flexibility to the next level. On the other hand, it emphasizes security through the 2016 Labor Law, which strengthens the right to training, simplifies telecommuting, and the 2019 unemployment insurance reform. Additionally, there is an increasing demand for foreign talent, as highlighted by the Conseil d'analyse économique in its 2021 report. At the onset of the health crisis, France, like many other European countries, temporarily paused its flexibility measures to support companies and workers.
Is the 4-day week a flexible "win-win" solution?
The 4-day week concept is promoted as a solution to reduce stress and enhance professional fulfillment. In theory, it involves working fewer hours while maintaining the same salary. Productivity gains resulting from improved working conditions are expected to compensate for the perceived "loss" for companies. The 4-day week is believed to have various benefits, including improved health, positive environmental impact (less commuting time and energy consumption), economic benefits, reduced absenteeism, and increased attraction of foreign workers. Supporters of the 4-day week, both expatriates and local workers, unanimously agree that this arrangement allows for reduced working hours without compromising productivity and well-being at work.
Spain transitioned to a 4-day week in 2022, and in the summer of the same year, Ireland and the UK began testing the 4-day week for a period of 6 months. Initial feedback has been positive. In September, Belgium also adopted the 4-day week, despite criticism from trade unions. Unlike Spain, Iceland, and the United Kingdom (which pioneered the concept in 2015), the Belgian parliament did not propose a 4-day week with reduced working hours. Some large companies in New Zealand, the United States, Australia, and Argentina are also experimenting with the 4-day week. However, countries like Japan, Germany, and France remain skeptical, with large Japanese companies showing a preference for flexibility over the 4-day week.
Advocates of the 4-day week recognize that it may not be applicable to all sectors but stress the need for a comprehensive assessment as labor market transformations accelerate. For companies that have implemented it, the 4-day week, as a flexible and "win-win" solution, becomes an asset in attracting foreign talent.
The impact of AI on the international labor market
In its press release on May 23, 2022, the International Labor Organization (ILO) acknowledged a gradual recovery in the international labor market. However, the number of hours worked has not yet reached the levels of 2019, especially in countries severely affected by recent crises. The ILO sees the recovery as fragile, with certain sectors experiencing labor shortages and leaving millions of job seekers sidelined. According to Guy Ryder, Director-General of the ILO, "Now more than ever, it is essential to work together and focus on creating a people-centered recovery." However, it remains unclear whether advancements in artificial intelligence align with this goal.
Shortly before the ILO press release (on May 3, 2023), a report by the World Economic Forum (WEF) highlighted a concerning observation, depending on one's perspective. The report stated that almost a quarter of the world's jobs would undergo transformation within the next five years, either due to or facilitated by AI. This observation underscores the varying viewpoints regarding AI's impact. As international mobility resumes and new expatriate profiles emerge, AI, particularly generative AI like GPT chat, will require a reevaluation of jobs, organizational structures, and working hours. Traditional expatriate roles such as accountants, secretaries, and bank officers may become less attractive, as these professions, along with cashiers and clerks, are among those most likely to disappear, according to WEF.
Are expats working less or more?
To remain competitive, present and future expatriates may find themselves working more rather than less. The WEF recommends ongoing training throughout one's career, as AI is expected to create approximately 69 million jobs but also eliminate 83 million jobs (based on WEF's study across 45 economies involving 673 million working people). The superior performance of AI, which can reason and communicate, contributes to this trend. While AI is not foolproof and still requires human involvement, researchers believe that time is on AI's side.
Consequently, international and local workers must continuously train to remain competitive and adaptable to changes in the job market. Employers increasingly demand ongoing training that incorporates the flexibility necessary to adapt to evolving job market dynamics. Instead of hyper-specializing in one field, future expatriates will need to be resilient, adaptable, and capable of swiftly transitioning to sectors with demand. WEF has established its own training platform, the Reskilling Revolution, to address these needs.
Do expats tend to work less?
The perception that expats tend to work less may stem from images of digital nomads or remote workers working from idyllic locations, giving the impression of a vacation-like lifestyle rather than work. Expatriates' aspirations, such as seeking alternative ways to fulfill themselves and better managing their professional and personal lives, may also contribute to this perception. However, these aspirations are not exclusive to expatriates and are shared by local workers as well. In reality, digital nomads and other expats work just as hard as conventional workers.
The notion of "working more to earn more" has evolved into "working better to earn better." Professional mobility has transformed, and so have the profiles of expats. While financial considerations still play a significant role in the lives of expats, they are no longer the sole motivation for embarking on an international assignment. Expatriates now engage in a holistic reflection on the life they want to build. Today's workers are willing to work not necessarily fewer hours but more efficiently, leveraging different work arrangements to maximize their experience abroad.
