Mobile working: German banks are examining home offices abroad

"BayernLB and DZ Bank are pioneers. Others are in the process of creating the framework for mobile working abroad. Plans are often limited to EU countries for good reasons.

Several German banks are examining whether they should also allow working from home abroad. BayernLB and DZ Bank have already made arrangements for this and are therefore pioneers in the savings bank and cooperative sector. External consultants report increased inquiries on the subject, while the word "workation" appears more and more often in job rating portals. Flexibility can increase the attractiveness of employers.

Dekabank is one of the institutions dealing with workation. Dekabank plans to "create the framework for mobile working abroad" in the course of this year, said a spokeswoman. According to its own statements, LBBW is also working on a regulation on workation. And Helaba said it was examining the possibility of working from home abroad.

BayernLB and DZ Bank already allow it

At BayernLB, workation has been possible in selected countries of the European Union since August of last year. Up to 20 days are available per year, with a maximum of 10 days at a time. The subsidiary DKB even allows 30 days a year. In exceptional cases, employees at DZ Bank can work up to 18 days per year from other EU countries, provided the manager agrees.

"The number of inquiries in connection with all international employee assignments - from a short work placement to permanent home office abroad - has increased many times over," said Heidi Schindler, senior manager at management consultant EY. The pandemic has shown that working from home – regardless of the country – does not result in any loss of efficiency. On the other hand, employee satisfaction increases significantly.

Daniel Lafrentz, Director at PwC, reported something similar. "Cross-border flexibility in the place of work has arrived in HR departments as a very attractive benefit for employees," said the consultant. The main trigger was the lack of skilled workers. Today, companies have to make good overall offers to existing and potential employees in order to survive in the "war for talent" - i.e. the struggle for the best minds.

Shortage of skilled workers

Although jobs are being cut overall in the banking industry, there are still staff shortages in certain areas. According to DZ Bank, specialists in compliance, sustainable banking and payment transactions are in particularly high demand. The bank bosses who have warned of a shortage of skilled workers and vacancies include those of LBBW and KfW.

In the third quarter of 2022 alone, the banking industry in Germany advertised almost 30,000 jobs, 26 percent more than in the same period last year, according to data from the Berlin-based personnel specialist Index Gruppe.

A look at the employer rating platform Kununu.com shows that workation - a combination of the two English terms for work and vacation - now plays an important role for employees. There, the use of the term workation has increased twelvefold in the past year, as Kununu boss Nina Zimmermann said.

This fits in with the report by TUI AG that the segment of long-term and work-related holidaymakers at the tour operator could soon exceed the 100,000-per-year threshold.

Compliance stumbling blocks

According to the Munich lawyer Sarah Klachin from the Pinsent Masons law firm, there are good reasons why banks and other companies often limit working abroad to the EU and certain periods of time. 

 

For example, when working in an EU country, no separate residence permit or work permit is required, whereas elsewhere this often has to be checked individually. Data protection, tax and social security aspects would also play a role.

 

DZ Bank also explicitly points out that the restriction to 18 days of work per year has tax reasons. 

 

"Companies should be aware of the hurdles when they think about workation and the like," said EY expert Schindler, "so that the dream of unlimited flexibility doesn't end in a compliance nightmare.""

 

Oh those stuffy Germans... All German life is a compliance nightmare. How paternalistic they are. English speaking countries often allow longer working from home in other countries understanding that hiring a good tax consultant is a responsibility of the employee.