Five tips for managing digital nomads

You'll find them working everywhere from cafes in Sydney to campervans in the South of France. The nomadic lifestyle has gone mainstream. But what are digital nomads and how can they benefit your business?

REMOTE WORK | 6-MINUTE READ
Managing Digital Nomads
What are digital nomads?

What are digital nomads?

A digital nomad is a remote worker who travels while earning a living online. In other words, a free spirit who isn't tied to a particular workplace or home office.

A growing number of remote workers are choosing to relocate, some only for short "workcations", some for the longer term. For many, becoming a digital nomad is about being closer to family and friends, while others want to experience a new culture or fulfil a lifelong dream.

The stats suggest this is a trend that employers need to take notice of. The number of Americans who describe themselves as digital nomads jumped by a staggering 131% between 2019 (pre-pandemic) and 2022 (post-pandemic), according to MBO Partners.

Another study estimates there are already 35 million digital nomads worldwide, with this set to grow to a billion by 2035.

Digital nomads work from hotel rooms, cafes, libraries, coworking spaces and relatives' homes. In fact, anywhere with an Internet connection.

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Digital nomad careers

As you might expect, many digital nomads are freelancers, but increasingly they're also employees who work for companies that allow remote work. In 2022, two thirds of digital nomads were full-time employees, up from 44% in 2019. Digital nomads typically work in fields such as IT, design, marketing, media, accounting, consulting and online tutoring.

Since the pandemic, many employers have become more open to flexible, remote work arrangements, and requests from employees to work from overseas are more common than ever.

To capitalise on the trend, more than 50 countries, including Thailand, Costa Rica and Portugal, have now launched digital nomad visa programmes to cut red tape (including tax liabilities) for remote workers. These allow people to spend longer in a country than on a tourist visa, while at the same time boosting the local economy.

Advantages of hiring digital nomads

Advantages of hiring digital nomads

Welcoming digital nomads to your team can bring many benefits to your business, including

Access to a wider talent pool

If you're struggling to fill skills gaps locally, you can cast your net wider. Because you're not bound by location, it's possible to draw from the talents of people from all over the world. What's more, digital nomads tend to be highly skilled, self-motivated individuals who are tech-savvy. Broadening your horizons can help you find the skills and expertise you need without paying over the odds.

Cost efficiencies

A clear benefit of hiring digital nomads is reduced overheads and travel costs. The fewer on-site people you have, the less office space you'll need. The upshot is less spent on outgoings such as rent, utilities, broadband, stationery and travel expenses.

If your digital nomads are freelance, you'll also save on sick pay and employee benefits. This could be a particularly cost-effective way of working for start-ups that can't yet afford office space.

Cultural diversity

Hiring people of different nationalities and backgrounds is a great way to increase diversity in your workplace. Having an inspirational mix of people working for you can help bring new ideas, fresh perspectives and innovative solutions to your organisation that you may not otherwise have thought of.

Flexibility

By their very nature, digital nomads like flexibility. This is great news for your business – they can provide cover round the clock from different time zones. Ideal for international companies. Say your website goes down overnight – you won't have to wait until the next morning for your in-house IT team to fix it, so won't miss out on valuable revenue from international customers.

Challenges of hiring digital nomads

Challenges of hiring digital nomads

If you like the idea of recruiting digital nomads, make sure that you weigh up the potential downsides too. They include:

Availability

One of the main challenges of hiring digital nomads is that they aren't always available when you need them, and there may be times when they're unreachable, especially if they're freelancers. Plus, Internet connections aren't always reliable, which can make it difficult for nomad remote workers to stay connected and get tasks finished on time.

Communication

When digital nomads are in different time zones, working on projects that require real-time communication can be a headache. Expecting them to show up for a virtual meeting or reply to emails in the middle of the night probably won't go down too well.

Legal and tax issues

A dream relocation for an employee can be a legal minefield for HR and compliance teams. Different countries have different rules and regulations to adhere to. You can easily get caught out if you aren't fully compliant with rules on immigration, work permits, employment rights, tax obligations, intellectual property and so on. If you don't comply with the rules, your business may face fines or even legal action.

Admin

Legal issues and complex admin involved with recruiting globally dispersed teams amount to a pile of paperwork. Filling in the relevant documents can be very time-consuming, and you may have to seek professional advice to make sure that you've processed everything correctly.

Security risks

Digital nomads often use public Wi-Fi, but this can be a major cybersecurity threat unless they use a data-encrypting VPN (virtual private network). Hackers can steal personal details and passwords, which could put your company's sensitive information at risk. Device theft is another concern, especially if your employees haven't properly secured their equipment.

Should you let employees work as digital nomads?

Should you let employees work as digital nomads?

Even if your organisation has fully embraced remote working, you might still be unsure about offering total flexibility to your employees. But with a growing number of people wanting the freedom to work wherever they like, you risk losing your top talent if you dismiss the idea out of hand.

On the plus side, digital nomads report 13% higher job satisfaction than other workers. This is great for retaining talent for longer. Further research shows that 20% of remote workers would be likely to stay 10 years longer with their current company if they could work anywhere in the world without it affecting their salary and benefits.

Digital nomad living can also do wonders for people's well-being. Perhaps you have employees who are stuck in a rut and need a change of scene to get their mojo back. Ultimately, if people are happy, healthy and motivated, it's your bottom line that benefits.

But to make it work for your business, you'll need a digital nomad policy that also takes into account issues around local employment laws and tax regulations.

If you allow employees to work abroad for the long term, you may be bound by foreign regulations on wages, annual leave entitlement, maternity leave and health and safety etc. And digital nomads can accidentally create a new "permanent establishment" for their employer in the country where they're working. This could mean that your profits are taxed there too.

It's therefore paramount that you carefully consider your legal obligations before agreeing to a digital nomad arrangement.

Top tips for managing digital nomads

Top tips for managing digital nomads

If you think that virtual nomads could be good for your business, here's how to make a success of managing digital nomads:

1. Implement a formal digital nomad policy

Putting together a comprehensive digital nomad work policy can allow you to maintain control of how your people move around. It has been known for some remote employees to return to their home country or retreat to a second home overseas without letting their employer know.

Setting up a formal arrangement means you can outline all of the legal and practical requirements for nomads so that they can enjoy flexibility but still work in a professional, safe and compliant way. Remember to regularly update and review your policy to make sure that it's still working for you and your remote nomads.

2. Keep nomads up to date with employment law

Wherever they work, nomads need to follow local employment laws. There can be serious consequences for both employees and employers if they get this wrong, including fines and penalties. Make sure that you keep track of any changes or updates to regulations – and let your nomads know.

You can reduce the risk of remote nomads falling foul of local legal, tax or compliance issues by limiting the amount of time they can spend in any one location and listing places that are off-limits.

3. Make expectations clear

While flexibility is key for digital nomads, it's still important to set boundaries and outline what's expected of them. For example, you might request that they work in professional environments with few distractions, such as coworking spaces and hotel rooms, rather than a hammock by the sea. And you may want to set core hours for when meetings and synchronous collaboration take place.

Be clear about working patterns, tasks and deadlines, and establish a primary way of communicating. Which brings us to…

4. Communicate effectively

Clear communication is vital for running a successful distributed team. It's important to have regular check-ins with virtual nomads to find out how they are and whether they have everything they need to do their job effectively.

Regular communication will help them feel engaged, supported and more committed to achieving company goals. Use an online platform for instant messaging, meetings and task management.

5. Make nomads feel part of the team

Isolation and loneliness can be an issue with any type of remote working, so make sure that digital nomads feel just as much a part of your team as any other employee.

Try to make your social events more inclusive. Organise virtual team activities and celebrations that everyone can attend, wherever they are. Not only will this help nomads feel more connected, it will also boost team collaboration and communication.

Companies now have greater opportunities than ever before to tap into the rich pool of talent available worldwide. By accommodating those who want the freedom to roam, you can equip your workforce with the skills that they need to thrive in a diverse global market.

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