New work: what remains when everything changes?

We live, we work – and in the recent past we’ve started living and working in ‘new’ ways, using novel terms like hybrid work, mobile work, working from home, or even telework. In the terminological jungle of ‘Work 4.0’, words like these are often treated as synonyms. But what do they really mean?

Hybrid work is an umbrella term for mixed forms of working partly in an office, and partly from elsewhere. We can speak of hybrid work if at least one day per week is spent working outside of the employer’s premises. Another term, telework, is often thought to refer to the same thing but has two components: working outside of the employer’s premises and using information technology. 

In general, a distinction can be drawn between working from home and mobile work. Most people are familiar with working from home (‘WFH’)- also referred to as ‘home office’. Mobile work refers to work completed outside of employer premises but not necessarily from home. Both can be forms of hybrid work. No comprehensive legal definitions of these terms exist, and the only term currently defined in Austrian law is ‘home office’ in §2h AVRAG.

 Working from home – here to stay?

Depending on industry and location, trends regarding working from home can vary significantly. While many IT firms continue to offer 100% WFH arrangements, other industries have implemented a full return to the office. Manufacturing and industrial companies are currently trying to negotiate the white-collar/blue-collar terrain and find a third way – one which promotes company culture but also gives employees the flexibility they are looking for. 

In other words: finding individual, thoughtful solutions to reach this goal! 

Business location also affects the availability of WFH arrangements. Studies of job market dynamics show that businesses located in rural areas are more likely to offer WFH arrangements. WFH offers them a way to remain attractive to potential applicants and compete with their counterparts in densely populated, urban areas.

Is 0.8 FTE the new 1.0?

We are currently experiencing a demographic shift, which is producing different needs and expectations in the ‘war for talent’. Increasing numbers of employees are looking for more flexible working conditions, with greater freedom to plan their time, and the option of working from their own four walls. Similarly, a report on working time by AK Oberösterreich showed that Austrian employees would prefer a reduction in working time to 36 hours per week. Another study from Iceland, which looked at reducing working time from 40 to 35 or 36 hours per week with a four-day split, found that the four-day working week is more than just a nice idea. Over the two-year period of the study, the work-life balance and the general wellbeing of all participants improved, while productivity stayed the same on fewer hours but the same pay. 

Another best practice example is currently underway in the UK – the world’s largest four-day week pilot project, involving more than 3000 employees from various industries. Meanwhile, in Austria, a growing number of companies are pursuing this idea. An Austrian marketing agency recently decided to introduce a 30-hour week with no change to pay. And in the administration, sales, and research divisions of a well-known motorcycle manufacturer, it is now possible to spread working time across four days from Monday to Thursday. As far as our work is concerned, a growing number of clients are requesting feasibility studies on the introduction of a four-day week, not only covering ‘whether’ but also ‘how’.  

Reduced working time, increased flexibility and the ‘war for talent’

In general, the free employment contract (‘freier Dienstvertrag’) provides Austrian companies with a flexible alternative within HR. This employment type gives employers the ability to engage freelancers for short-term projects or as additional support for a set number of hours per week without having to offer a permanent contract. Combined with the shortage of skilled workers in Western countries, in some countries (if permitted by local labour laws) the ‘war for talent’ has become a ‘war for independent talent’. 

However, freelancers are not able to gain traction in some industries in Austria, as Austrian case law prohibits free employment contracts in certain circumstances, especially if there are indications that a full employment relationship exists (e.g., having to follow the employer’s instructions, being subject to monitoring by the employer, or absence of a substitute for the employee). If a free employment contract is formulated in a way that is too similar to a full employment contract, or the employment relationship is too similar in practice, this may create additional risks (e.g. corrective payments, social security, claims brought by the employee, etc.), which can be grouped together under the term ‘false self-employment’.  

Clients are unanimous that Austrian government policy is too strict when it comes to employing people from non-EU/EEA countries and international students in Austria. 

This is not only seen as outdated, but also leads to increased costs for Austrian companies that ultimately reduces the attractiveness of Austria as a business location for start-ups, innovators, and established companies.

Innovative worlds of work – new phenomena?

The past few years of the pandemic have shown us how flexibly and independently we are able to work thanks to digital technologies. Employers’ worries about loss of control, decreasing efficiency, and reduced productivity have largely proven baseless. Untested forms of working that were once only attempted hesitantly have now become normal. 

New world, hybrid work. This is also confirmed by PwC’s Global Workforce Hopes and Fears study on remote working. Only 9% of respondents with the option of working remotely want to return to a traditional workplace and working environment on a full-time basis. 

One of the New Work phenomena that should be mentioned is the ‘workation’, a mix of work and vacation. Want to brainstorm in the pool before the meeting? Workation is a real possibility, provided that the required agreements and rules between employers and employees are in place. Austrian companies have also recognised that combining work and vacation is more than just a trend and can help them to retain employees when positioning themselves as an attractive employer. For example, employees of a well-known crypto start-up have been given the option of working from other parts of the world for two months a year. To roll this out to an entire workforce, it’s essential to carefully review the legal framework beforehand, as there is no specific legal basis for workations in Austrian law. Provided that tax, social security, and labour law issues have been clarified, and any issues around availability and duration of the stay have been solved, there are no further obstacles to a smooth workation. 

Does this sound attractive? Would you like to talk to one of our experts and learn more about our services? Our People & Culture Consulting team is looking forward to hearing from you!