Contracting overseas as a Brit: the COVID-19 edition
France. Argentina. And today, Australia. Wherever next? With this steady stream of overseas contractor job questions being submitted to ContractorUK, you’d be forgiven for asking, ‘Global pandemic? What global pandemic?’
Let’s now take a closer, more realistic look at the impact that COVID-19 is having on the international contracting market, because the impact is significant, writes Nikolas Papageorgiou, EU country manager at overseas contracting specialists Access Financial.
Interestingly, there are two contiguous countries which are cooperating to try to keep their economies going while mitigating their health risks from coronavirus. And perhaps reassuringly if you too are a ContractorUK reader who is overseas job-browsing, there are some governments which are now relaxing their lockdown restrictions on the belief that they may have passed the top of the infection curve in their countries.
Experience, not statistics
Our business spreads over nine offices in Europe and Asia, and we deal with recruitment businesses, corporate clients, and contractors from most countries, putting our operations in close to 60 different countries worldwide. Our experience is, therefore, likely to be indicative of the trends. Since official figures on covid-19’s impact on people and the economy are flimsy at best, what we assert in this piece may not be statistically verifiable. Instead it comes from our direct experience.
Most European countries went into coronavirus lockdown between the second and fourth week of March. In the subsequent period to date, we have experienced a significant fall in activity from our clients. We attribute this to several factors – which they too have indicated to be in play:
- An immediate fear in reacting to the outbreak, leading to decision-making paralysis
- A shift in priorities towards business survival, rather than business improvement
- The logistical and practical difficulty of running projects in lockdown
- The logistical and practical difficulty of running projects with remote workers
- A freeze on transport and local and in-country journeys, in addition to quarantine upon entering a country, assuming a flight into a country is available.
The immediate, devasting impact of coronavirus
The impact of covid-19 on contracting outside of the UK was immediate and devastating for many of our contacts. For example, one smaller outfit who works with only two end-clients told us that one had cancelled all assignments. The result was a 50% reduction in turnover booked for the current year. Other clients report the shelving of many contracts, if not their outright cancellation.
On the other hand, we have seen an uplift in the flexibility of clients to allow contractors to work remotely. The upshot for us is that we have had to provide solutions in contract workers’ home-countries, that can transition to the contractors’ work-countries, all the time abiding by each individual nation’s travel restrictions.
Shift, survival and the still unknown
During this outbreak period, we have sensed a shift from the initial paralysing fear and bewilderment towards a more pragmatic approach suggesting that, however long this epidemic continues, life will go on. And that, at some point we will all emerge with commercial and contractual operations still intact. It is just that no one knows when.
Similarly positive, we also see a range of projects planned to launch the very moment that restrictions relax. These ‘pipeline projects’ are running at a rate perhaps twice that of our activity last year.
Inside and outside the workplace, there is no question that COVID-19 has had dramatic effects on altering mindsets -- about home working, flexible working, new business (and non-business priorities like lifestyle), the adoption of new technology and re-basing and re-sizing businesses.
‘Things cannot stay as they are’
The pandemic imposing a realisation that ‘things cannot stay as they are’ has given an enormous, unimaginable fillip to our sector. Our contractor clients are mainly IT and management consultants whose skills will be in unprecedented demand, as businesses look to improve their competitive edge in the post-COVID era and change things up. Positively for the suitably skilled, at home here in the UK and abroad, we predict it will be like the millennial frenzy all over again!
Unifying many different sector workplaces, as traditional mindsets started shifting, clients and contractors alike got gradually used to working remotely. This did not come without challenges, related to logistics and organisation, coordination or tax and compliance questions.
How clients, and governments, have reacted to covid-19
On this day-to-day level, we’ve seen clients ease up on their expectations for contractors to be present onsite, every day. Contractors accepted that they should start (for an indefinite period) working remotely from home. Obviously, this put strain on both sides, but at the time of writing (well into May 2020), most have come to terms with the fact that this situation must be managed. Somehow. Even for the most resourceful consultants and clients used to producing one or commissioning one, for once -- a work-around there isn’t.
Where we experienced an unprecedented level of adaptability, was on the government side. Most governments of countries where we’ve got contractors on the ground accepted that they should urgently modernise their procedures and digitalise most of them. At the same time, several governments agreed that cross-border workers should not be penalised and taxed under their home country tax system while on lockdown.
Fortunately, we’ll probably get more Belgium-Netherlands-style tie-ups
Working remotely from the Netherlands for a Belgian client, for example, is not considered any different to working onsite, albeit just while coronavirus travel restrictions are in force.
These are the two nations mentioned at this piece’s outset. Usual cross-border work regulations between Belgium and the Netherlands stipulate that workers who live in one country but work in the other are protected from having their income tax paid to their country of residence. They are, however, obliged to pay tax in their country of residence if they exceed a certain number of days of remote work per year, which varies per country.
Yet Belgium’s finance minister, Alexander De Croo, announced an agreement on Twitter, saying it aimed to protect cross-border workers from the negative impacts of the coronavirus pandemic.
“Working from home by corona should not have negative tax consequences for frontier workers,” De Croo said.
So, the agreement will allow the country of employment to continue being the competent tax authority for cross-border workers, even if they have been working from their country of residence.
Belgium, France, and Luxembourg have also agreed among them on the same approach for the duration of the crisis (the actual term is May 31st but could be extended if necessary).
So it seems we are reaching new, tangible levels of understanding and cooperation between EU countries for their workers, like contractors, who cross borders. Positively, we believe that the contingent workforce should see more of these tie-ups over the next few weeks.
England’s easing up
Last but not least, the UK. At the time of writing, England has also eased its lockdown and travel restrictions, but not to the degree expected by most and not in line with Wales and Scotland, which isn’t adopting England’s lockdown-lite.
But currently in England, workers who cannot work from home are being encouraged to go back to their workplace, avoiding (if possible) public transport. Also under the new, latest guidance, contractors and anyone else entering the UK, effective from the end of May, will be required to self-quarantine for 14 days. Contractors and travellers coming from the Republic of Ireland will be exempted.
No ‘one-size-fits-all’ approach likely to remain
Elsewhere, such as in the US, the lockdown (and the relaxation level) varies per state and county. And in China, it depends on the province. This different pattern means there is no ‘one-size-fits-all’ approach to contracting abroad amid coronavirus, but the first port of call for Britons has to be checking the Foreign Commonwealth Office’s website for travel advice. You should note the warning about ‘Essential Travel’ – and, as enticing as they may seem, overseas work opportunities won’t meet the ‘essential’ test. Asking your client or agency for guidance, in writing, should you be selected or put forward for a contract abroad, is also important.
For contractors in the UK, the lockdown beginning to lift is soon likely to mean more usual working conditions, shy of working as freely as usual. Their options for contracting abroad will likely remain limited, for now. Indeed, for contingent workers wanting work outside the UK, being flexible (such as working for end-users remotely) – as governments and clients have been – will continue to be the key until the total, as yet unscheduled lift in the travel restrictions is granted between the UK and the country of destination.