Digital nomadism is a trend that’s rapidly picking up speed in the world of work, allowing individuals to work remotely from anywhere while enjoying the freedom to travel and explore new cultures.
The number of digital nomads worldwide may exceed 1 billion by 2035, meaning one-third of the world’s workforce at that time will be plugging in and making various locations around the world their office on the spot.
Many governments are now exploring dedicated visa programs aimed at attracting digital nomads to work and live in their countries for extended periods. Countries like Portugal, Estonia, Barbados, and the United Arab Emirates already have such programs on the books.
“The growing number of digital nomads worldwide has opened up new possibilities for companies to hire top talent without the need for relocation,” says GoGlobal Partner Nick Broughton. “However, hiring digital nomads comes with its own set of challenges and considerations, ranging from recruitment and engagement to compliance and HR processing.”
Here are the top seven considerations for companies that want to build an effective, compliant digital nomad strategy.
Digital nomads are different from remote and hybrid workers
While remote and hybrid workers also work outside of traditional office settings, digital nomads differ in that they typically do not have a fixed home base or office. Instead, they are likely to travel frequently and work from a variety of locations, such as cafes, coworking spaces or even from their own personal laptops while on the go.
They also have different motivations and values. Digital nomads often prioritize location independence and flexibility in their work and lifestyle choices. They may choose to work and live in different countries for extended periods, often immersing themselves in new cultures and experiences.
This level of mobility and freedom makes digital nomads a distinct group within the remote workforce, requiring hiring companies to adopt different strategies when it comes to recruitment, engagement and HR processing.
Sourcing digital nomad talent can be challenging
Recruiting digital nomads requires a different approach: traditional job postings may not be effective and there may be language, cultural and timezone barriers. Without an established local network, it can be difficult for companies to identify and connect with digital talent. This is especially true for companies who are new to the digital nomad community.
Digital nomads, in general, tend to gravitate toward companies that offer a remote work culture, flexible schedules and a good work-life balance. To attract digital nomads, communicate your values, culture and expectations clearly.
Interviewing and hiring processes must be adapted
Even after a candidate is identified, one of the main challenges of hiring digital nomads is conducting remote interviews and assessments. Companies need to ensure that their hiring process is reliable, efficient and transparent. This can be done by:
- Having a structured, comprehensive hiring process that covers virtual interviews, skill assessments and cultural fit evaluations.
- Establishing clear communication channels and protocols for onboarding and training new hires.
- Investing in technology tools and resources that facilitate remote communication and collaboration.
- Partnering with local experts to ensure a smooth and compliant onboarding process.
Engagement levels can dwindle fast
Since digital nomads work independently and literally have a whole world of opportunities at their fingertips, engagement and motivation can be profound challenges.
Companies can create a strong sense of community among remote workers by organizing virtual team-building activities, regular communication and mentorship programs.
Providing regular feedback and recognizing contributions are also critical to keeping digital nomads engaged.
Regulatory compliance is tricky – but a must
Digital nomads may work in multiple countries, making it challenging to comply with local tax laws, employment laws, and social security regulations. It is essential to work with legal experts and professionals who understand the local regulations to ensure compliance.
Avoid legal misadventures
Managing HR processes for digital nomads is like navigating a maze of complex, ever-changing regulations that you hope doesn’t put your company on a path to legal misadventures around the world.
Companies need to ensure that they are meeting all legal requirements related to taxes, benefits and employment contracts in the countries where their digital nomads are working. Additionally, managing payroll for digital nomads can be complex, as it may involve navigating different currencies, tax codes and payment methods. HR processing can be challenging as you manage employee data across different systems and platforms, posing threats for data privacy and security.
The risk of permanent establishment (PE) can also arise if your company has a significant presence in a foreign country and becomes subject to taxation there. PE may be especially triggered if your digital nomads are working in a foreign country for an extended period – and the local authorities consider the company to have a permanent establishment there. Failing to properly manage your PE risk can seriously damage your company’s reputation and business relationships in the affected country.
Bolster your digital nomad strategy with EOR hiring
Hiring through a global Employer of Record (EOR) can offer a helpful framework that solves many of the challenges associated with managing a digital nomad workforce.
The EOR can assist with compliance issues by ensuring digital nomads are hired and paid according to local laws and regulations. Employers of record can also provide support with HR processing, managing payroll and benefits – while properly safeguarding employee data.
Your EOR partner can serve as local experts, helping companies navigate the complexities of international tax law, social security regulations, and employment law. This can help to avoid legal misadventures and the risk of permanent establishment, ensuring you remain compliant and protected.
In addition, in select cases, an EOR may be able to provide strategic support in terms of recruitment and engagement, leveraging their knowledge and expertise to help you connect with and engage top digital nomad talent. This is the basis of GoGlobal’s Recruit & Hire solution.
By working with an EOR, companies can bridge gaps, improve recruitment, raise engagement and develop a strong digital nomad strategy that meets the specific needs of this burgeoning, distinctive talent pool.
GoGlobal is your partner for owning your digital nomad strategy. Contact us to learn more about how our one-of-a-kind Recruit & Hire solution can help you access new talent pools of digital nomads around the world.