How Digital Nomads Are Shaping the Future of Work

Working from a beach in Bali is no longer just for bloggers and startup CEOs. The rapid rise of Homo digitalis nomadicus is changing the global labor market, affecting everything from team communication to vacation pay. Hiring digital nomads and introducing remote teams create new opportunities for businesses, but they also present a lot of new challenges for HR.

‍

In this article, we'll look at some difficulties organizations face when working with digital nomads and offer tips for building an effective workforce. 

‍

‍

Who are digital nomads?

‍

Put simply, digital nomads are people who work remotely without being tied to a specific location. They are often highly skilled professionals with a deep understanding of digital technology and a high level of autonomy and discipline. 

‍

There are different kinds of digital nomads:  

• Freelancers offer their services on a project basis.
• Remote full-time workers have a single employer.
• Entrepreneurs and business owners combine running companies with traveling.
• Seasonal nomads spend part of the year in another country and the rest of the time at home. 

‍

What they all have in common is that modern technology allows them to do their work remotely. 

‍

Many nomads get special visas to live in another country, and more and more governments are introducing digital nomad visas. Usually, to qualify, a person needs a minimum salary, an employment contract or cooperation agreement, and an assortment of documents, which vary from place to place.

‍

‍

‍

Benefits of hiring digital nomads

‍

1. Access to global talent. HR has a unique opportunity to attract professionals with in-demand skills, regardless of where they live. This is especially important for organizations in niche fields that need specific competencies that are hard to find or too expensive in the local job market. For example, many tech and digital companies often hire digital nomads for complex tasks.
   
   
2. Cost optimization. By switching to remote work, companies can save significantly on office rent and, in some cases, high local salaries. Often, working with digital nomads is more cost-effective for companies, especially because they can hire nomads on a project basis. This means they don’t have to provide benefits like health insurance and vacation time.

3. Flexibility. Digital nomads allow companies to be more flexible and customer-centric. Operating in different places can be an advantage for some organizations: for example, if a company's customers are scattered across the globe, employees from nearby time zones can quickly provide support during their own working hours. 
4. Different perspectives. According to a McKinsey study, ethnically and culturally diverse companies have a 33% chance of outperforming on EBIT margin. With their diverse professional and personal backgrounds, digital nomads can propose creative solutions to familiar tasks.
5. Innovation. Thanks to their experience living in different environments, digital nomads are quick to adapt to new industry trends. That’s a powerful advantage when combined with technical prowess — according to a report by MBO Partners, 76% of nomads consider their AI skills intermediate or advanced, 10% more than regular employees. 

‍

‍

Things to consider when working with digital nomads

‍

Despite the prevalence of digital nomads, most companies lack clear rules on how to work with them. About 22% of nomads are with organizations that don't have specific policies on remote work, and another 14% report that their employers are completely unaware of their movements! This can lead to a number of problems for companies.   

‍

‍

1. Legal issues. To work with digital nomads, companies need to be well-versed in international labor laws. Each jurisdiction has different rules, which creates challenges when hiring people located in different areas. Some countries have restrictions on hiring foreigners, while others require special visas for remote workers. Companies need to understand their tax obligations and how to execute contracts to minimize risks. Contractor-of-Record (CoR) services can help in these situations by handling official processes like hiring, payroll, and compliance.
2. Benefits and perks. The traditional model of providing health insurance for employees makes less sense for nomads. HR may find it necessary to create a new, more flexible system of benefits.
3. Communication barriers. Time differences and a lack of live contact or regular meetings with colleagues can slow down work and create friction. This is especially the case when employees have different cultural and linguistic backgrounds, but difficulties can arise even when they’re in the same country.
4. Retention. Digital nomads are often focused on short-term contracts and aren’t opposed to changing employers when they find more attractive terms. Retaining such employees is difficult, as job stability and corporate perks matter less to them than flexibility and the ability to combine work and travel.

‍

Of course, not every company experiences these difficulties when working with digital nomads. Still, the more of them there are on a team, the greater the risks will be and the greater the need for new management techniques.

‍

‍

Managing digital nomads effectively

‍

Like it or not, the nomads are coming. Businesses are advised not to ignore this trend but to adapt their HR processes to it. Here are some tips and things to consider.

‍

1. Platforms for effective communication. If digital nomads make up a significant portion of a team, going asynchronous may be the best option. This means reducing required real-time communication to a minimum and allowing each employee to work on a schedule that’s convenient for them. Of course, this makes staying on the same page more difficult, but wise use of communication platforms can help: Slack for text updates, file-sharing, and discussions, Trello for task tracking, Loom for meetings, and Notion for documentation.
2. Focus on results. Instead of micromanaging and tracking the time an employee spends at the laptop, companies are better off focusing on outcomes. Schedule flexibility is one of the most important benefits for nomads, and companies that realize this will find it easier to retain them. To make this work, managers need to define tasks, deadlines, and expected results clearly.
3. Clear policies. To protect itself from legal and tax risks, each company needs to develop policies for remote work. They should regulate things like working hours, how long employees can stay in particular countries, and the provision of equipment and secure communications. Establishing rules like this will prevent problems down the line and potentially attract new talent that appreciates your clarity and transparency.
4. Lifestyle support. It's important for digital nomads to feel that the company supports their lifestyle. Additional benefits can help with this, such as discounted insurance and monetary allowances for co-working memberships, airfare, or work app subscriptions. Beyond making life easier for nomads, perks like these strengthen their connection with the company and allow them to work more effectively.
5. Integrating nomads into the company culture. Feeling isolated can be a problem for any employee, but especially for digital nomads, who often live far from family and friends. This means it’s in a company’s interest to work hard to make them feel like full team members. Group activities and online events can help strengthen digital nomads’ bonds with the company (just don’t overdo it, or they might complain that mandatory fun distracts them from their work). For larger companies with many remote employees, some of them are likely in the same country, so regular face-to-face meetings are a possibility.
6. Use special services for financial and legal support. As the number of digital nomads rises, it will be increasingly difficult for companies to handle legal and financial logistics independently. One solution is to find talent on a freelancing platform like Mellow, which makes collaboration safe and straightforward for both parties. Mellow is an easy-to-use solution for collaborating on single contracts, transferring money in different currencies, and working with contractors worldwide.