Over the next five years, employees can expect a growing number of benefits associated with full-time employment. This trend is driven by a focus on their well-being, including financial security. For employers, this translates into more complex payroll and HR regulations and the resulting higher operational costs. An additional challenge for companies will be the competition for international remote-working talent and the complexities of ESG reporting on employee-related matters. These are the key findings of the report
“The Future Focused on Employees,” which expands on the Global Business Complexity Index 2024 by TMF Group.
Nearly one-third (29%) of HR and payroll experts from 79 jurisdictions—accounting for 93% of global GDP and 88% of net foreign direct investment—predict that HR and payroll regulations will become more complex in the next five years. The main reasons include regulatory changes related to employment, tax laws, labor laws, and formal challenges associated with employing remote workers located abroad. Experts are particularly concerned about complex reporting requirements for employee-related issues.
Increasing Employee Benefits
Experts agree that the near future of employment, including in Poland, will involve companies offering employees the best possible working conditions.
In Poland, the list of employee benefits is objectively long and continues to grow. These benefits fall into two categories.
The first category includes benefits mandated by law, such as the minimum wage, paid vacation and sick leave, maternity and paternity leave, employee capital plans, and paid days off for childcare.
The second category includes benefits voluntarily offered by employers, such as bonuses, incentives, “13th salary” payments, additional paid paternity leave, housing allowances, childcare and education support, private healthcare, and even paid, extended leave to prevent burnout.
Managing these benefits poses significant challenges for HR and payroll departments, and this workload is set to increase. For instance, planned changes include the introduction of mandatory social insurance contributions for all civil law contracts, regardless of income (excluding contracts with students under 26). Simultaneously, the rule of calculating social insurance contributions based on the minimum wage for these contracts is expected to be abolished.
Further changes are planned to allow work periods under civil law contracts or self-employment to count toward employment tenure.
“According to announcements, the new regulations are expected to be introduced after 2025. However, any large organization will need to prepare for these changes in advance,” says Anna Jendo, an expert at TMF Group Poland.
Employee Mobility
Since the pandemic, more employees are opting for remote work. In pursuit of the best job offers, they apply for positions in other countries. For employers, this is an opportunity to attract top talent but also a challenge due to formalities and operational costs associated with employing remote foreign workers.
According to the TMF Group report, nine out of ten (92%) HR and payroll specialists in Europe state that a company’s decision to hire a foreign remote worker depends on the type of visa the potential employee holds. The second most important factor (cited by 52% of respondents) is the current salary level of the employee.
Employee mobility will increase wages globally, raising the cost of hiring new staff, especially highly qualified talent. Companies will compete not only with local employers but also with international players.
“In Poland, employing an EU citizen is no different from employing a Polish citizen, with the only requirement being a valid travel document (passport or ID card). The process becomes more complicated for citizens from outside the EU, who require additional steps such as residence permits and work authorizations. These procedures can take anywhere from 15 days to several months,” explains Adrian Nowak, a lawyer at TMF Group Poland.
When hiring remote employees from outside the EU, Polish employers must ensure that employees have the appropriate visas and work permits, if required by the host country’s law.
Demanding Reporting Requirements
TMF Group experts highlight that ESG reporting on employee matters, including inclusivity, will be a significant challenge for companies over the next five years. They also point to the increasing frequency and complexity of employee-related reporting, which is time-consuming and incurs additional costs.
“Employees’ peace of mind and sense of security directly impact their choice of employer and their productivity. To compete for talent, companies will offer more incentives and employee benefits. This is great news for employees and job seekers. However, it presents significant organizational and cost challenges for employers, who must manage these benefits formally and then report them in detail,” concludes Joanna Romańczuk, Director of TMF Group for Central and Eastern Europe and market leader for Northern Europe.
Source: Manager Plus
