The Rise of Digital Nomads

With the rise of remote work, a new breed of professionals has emerged: the digital nomads. This guide will walk you through what it means to be a digital nomad, the pros and cons of hiring these workers, and how to build successful working relationships with them.

The COVID-19 pandemic pushed many companies to adopt work-from-home policies, prioritising employee health. As restrictions eased, countless workers sought the flexibility to work not just from home but from anywhere—coffee shops, coworking spaces, and even while travelling. This desire for a location-independent lifestyle has led to a surge in digital nomads.

According to a 2021 study by MBO Partners, 15.5 million Americans now identify as digital nomads, marking a staggering 42% increase since 2020 and a 112% rise since 2019. At BairesDev, a fully remote company, we’ve seen firsthand the growing number of employees who take their work on the road.

This trend goes beyond a passing HR statistic; it poses various legal, financial, and ethical challenges for businesses. As the number of digital nomads continues to rise, companies must proactively address these issues.

In this comprehensive guide, we’ll explore who digital nomads are, how they work, and what drives their lifestyle.

Digital Nomad Facts

Digital nomads are defined as individuals who embrace a tech-enabled, location-independent lifestyle, allowing them to travel while working remotely. Here are some key insights about this group:

• Demographics The MBO Partners study reveals that 44% of digital nomads are Millennials, followed by 23% from Gen X, 21% from Gen Z, and 12% from Baby Boomers. Prior to the pandemic, Baby Boomers made up a larger percentage of digital nomads, but many became hesitant to travel due to health concerns.
• Professions: Digital nomads work in various sectors, including IT, creative services, education, consulting, and more. The common thread among these roles is their ability to be performed remotely using digital tools.
• Tech Savvy: Digital nomads are typically early adopters of technology and possess strong digital skills.
• Preferred Locations: Popular U.S. cities for digital nomads include Boulder, Austin, and Lake Tahoe, while popular international destinations include Canada, the U.K., and various European countries.
• Motivation: Many digital nomads prioritise experiences over material possessions, opting to invest in travel and adventures rather than luxury items.
• Job Satisfaction: An impressive 85% of digital nomads report high job satisfaction, with many leveraging “geoarbitrage”—living in lower-cost areas while earning higher wages from companies in more expensive locations.
• Supportive Services: There’s a growing array of services aimed at supporting digital nomads, including coliving spaces and online communities like Nomad List.
• Employer Acceptance: Companies are increasingly open to long-term remote work, recognizing the value that digital nomads can bring.
• Evolving Work Definitions: For many young professionals, remote work is simply the norm. They seek jobs that offer flexibility and align with their lifestyle.

Pros and Cons of Hiring Digital Nomads

While hiring digital nomads presents challenges, the benefits often outweigh the drawbacks.

Pros:

1. Access to a Global Talent Pool: Expanding your hiring search beyond local candidates increases your chances of finding the right fit.
2. Fresh Perspectives: Collaborating with remote colleagues can spark new ideas and innovations.
3. Soft Skills: Digital nomads often possess strong problem-solving abilities and adaptability, beneficial traits for any workplace.
4. Local Economic Boost: Digital nomads contribute positively to local economies without taking jobs from residents.
5. Cost Savings: Hiring nomads can reduce overhead costs associated with office space and resources.
6. Higher Retention: The job satisfaction reported by digital nomads can lead to lower turnover rates.

Cons:

1. Complex Tax Rules: Navigating the tax implications of hiring remote workers across different jurisdictions can be tricky.
2. Legal Issues: Employers must ensure their nomadic employees have the right to work in their current locations.
3. Reputational Risks: Poor behaviour by employees in foreign countries can reflect negatively on your company.

Considerations for Hiring Digital Nomads

Before integrating digital nomads into your workforce, consider these factors:

1. Synchronous Presence: Adjust traditional meeting schedules to accommodate team members in different time zones.
2. Employee Motivation: Understand what drives potential candidates, as flexibility is often a key consideration.
3. Cybersecurity: Strengthen your security measures to address the unique challenges of a distributed workforce.

Steps for Success

To prepare for hiring digital nomads, take the following steps:

1. Establish a Policy: Clearly define what remote work means for your company and set expectations for nomadic employees.
2. Understand Tax Implications: Consult with an international tax accountant to navigate the complexities of taxation.
3. Address Legal Concerns: Ensure that both the company and employees comply with local laws and regulations.
4. Enhance Communication: Set clear guidelines for team communication and meeting participation.
5. Train Employees: Provide resources to help employees navigate the logistics of working remotely.
6. Stay Flexible: Be willing to adapt your policies based on the evolving nature of digital nomadism.

Embracing the Digital Nomad Lifestyle

The rise of digital nomadism signifies a departure from traditional work environments. While you may feel a loss of control over where your employees work, consider the opportunities this lifestyle brings. Digital nomads can act as ambassadors for your company, forging new connections and gathering fresh ideas that could lead to your next big breakthrough.