Here’s Why Hiring Digital Nomads Will Transform Your Company
Digital nomads are remote workers who move from location to location. They may be employed as full-time staff members or engaged as independent contractors. Their work is location independent and they travel the world while working. Some digital nomads change location often, while others choose to spend a few months in each country.
Digital nomadism has been around for a while. But over the last few years, it has seen a surge in popularity. For instance, while in 2018, only 4.8 million people in the US described themselves as digital nomads, by 2021 this number had risen to 15.5 million people. And even more interestingly, 66% of digital nomads are traditional remote employees working for one company.
A further 24 million Americans plan to become digital nomads in the next couple of years. When asked, another 45 million Americans said they are open to the idea of becoming digital nomads even if they don’t have immediate plans to do so immediately, creating a massive talent market of remote globetrotters in need of skilled work with remote-friendly companies.
The tech industry, in particular, is a leader in digital nomadism. Approximately a fifth of all digital nomads work in the IT industry. Cloud-based companies allow tech workers to do their work remotely. All they need is access to a laptop and an internet connection.
The digital nomad employee market offers an incredible opportunity to hire skilled talent with unique skills. Companies in industries facing talent shortages, in particular, should be exploring this option. Here’s why.
Geoarbitrage is a key benefit of being a digital nomad. It means that workers receive the same salary to work in cheaper areas. Statistics back this idea up to an extent. Around 49% of digital nomads claim to earn the same salary, or more, as a digital nomad that they did as a regular employee.
Still, a proportion of digital nomads recognize they don’t need as much to live on and are therefore willing to work for less than a traditional employee. This means a company’s new employee or contractor could be based in Thailand but have the same cultural and language background as their team members. Companies could save by hiring homegrown talent based abroad.
Equally, companies looking to build diverse teams could hire international digital nomads too, benefiting from diverse perspectives and saving money in the process.
Access to talent
If you’re looking to hire software developers in particular, you will undoubtedly have faced struggles finding the right candidate. Software developers are in demand and companies are finding it difficult to source talent.
In the US, developer shortages are likely to exceed 1.2 million by 2026. And 87% of businesses are already feeling the effects of the talent shortage, with each unfilled vacancy costing businesses $680 per day.
Savvy companies will be looking for ways to alleviate this issue. Given the surge of digital nomadism in recent years, it makes sense to tap into this talent pool early. It is another potential source of talent that could prevent significant financial losses for businesses.
Companies sometimes worry that hiring digital nomads may lead to a high turnover rate. Because digital nomads aren’t rooted in a single location, there is this perception that they are flakey and flighty by nature.
But emerging trends suggest a different reality. To start with, more and more digital nomads are employed by companies full-time, which tends to lead to steadier relationships than companies might have with consultants and freelancers.
Furthermore, digital nomads have incredibly high levels of job satisfaction. In fact, 90% of digital nomads report they’re happy with their jobs, and 76% claim they’re satisfied with their level of income too.
Given that a large percentage of digital nomads are satisfied with their jobs and income, it is likely they would stay with their employers long-term as long as the employment situation doesn’t change.
Further, in an employee market, companies may need to become more flexible than they are to retain current staff in the first place. For example, 75% of software developers say they want to work remotely at least three days a week, while 60% are already working remotely full-time.
And given that some 20 million Americans want to become digital nomads, it is likely remote work policies will need to involve provisions for digital nomads in the near future. Forward-thinking companies that want to attract and retain staff will be laying the groundwork for their digital nomad policies now.
While savings costs, accessing talent, and retaining staff are all excellent reasons to tap into the digital nomad talent market, there is more to it than these practical benefits.
Digital nomads bring with them a whole host of soft skills that could benefit your company greatly.
They bring diverse perspectives with them. Even if they come from your home country originally, the fact that they have traveled widely means they have experienced the world in a different way and can use those experiences in their own work.
And if you have opted to hire international digital nomads, you get different perspectives from people who have benefitted from working and studying abroad.
Research suggests that teams with diverse staff members deliver 60% better results than teams where there is less diversity, meaning that opting for hiring digital nomads could significantly transform your team’s output.
Further, the digital nomad lifestyle requires people to be highly adaptable, innovative, willing to take risks, and think outside the box. These life skills they picked up on the road are likely to bleed into their work as well, providing your company with tangible benefits.
Research also shows that digital nomads have more advanced job and technical skills than their traditional counterparts. Further, they have a higher commitment to continued training than traditional employees on average.
These attributes could make digital nomads a transformational force in your business.
How to prepare for digital nomads
While many companies adopt a ‘don’t ask, don’t tell’ policy when it comes to digital nomadism, that isn’t necessarily the best approach.
Having a formalized digital nomad policy ensures a company is fully compliant and protects employees too.
But how do you get started if you haven’t thought about it in the first place? Here are a few things to think about as you start to flesh out your policy.
The first step is to determine what you want your policy to encompass.
Do you want to allow employees to work remotely and travel full-time? What about part-time or for a specific period of time? Both might be options that work for your company.
This is especially true because 32% of digital nomads only plan to adopt the lifestyle for a year or less as a way to work and travel. You may be able to institute a policy that allows workers to work and travel for up to a year, rather than a permanent digital nomad arrangement.
Would you like to place any restrictions on how frequently people move locations? This may seem draconian, but there is a reason for it. For instance, people who travel ‘slow’, where they stay in one place for a few months, may be better able to focus on their work as they don’t have to be dealing with the stress of moving and acclimating to a new place as often.
On the flipside, people who travel more often might not stay in a place long enough to establish residency which could work well for tax compliance purposes. If a person is employed by you but is a resident in another country for tax purposes, you will need to ensure you are in compliance with local laws when it comes to payroll.
This is also why some companies place location restrictions. They ask that employees do not work from areas where the company does not already have a tax presence. This works well for large companies that can still offer employees travel choices as they have international branches.
If the company wants to hire independent contractors based abroad, then that will need to come with a lot more leniency. Independent contractors have a less formal relationship with companies in general. But companies will still need to look into regulations to ensure that they can legitimately hire someone as an independent contractor.
Putting a policy in place now and considering all eventualities will prevent headaches and legal issues down the line.
Hire digital nomads to transform your company
Digital nomads are a force to be reckoned with in today’s global economy. Forward-thinking companies would do well to consider what they can bring to the table that will attract and retain these talented workers. From increased diversity and job satisfaction to advanced skill sets and adaptability, the benefits of hiring digital nomads are many.
The explosive growth in digital nomadism has caused businesses to take notice. Addressing talent shortages in the future will be a lot easier if there is already a robust policy in place allowing companies to tap into this talent pool. This is why companies are now rethinking their policies to accommodate this new type of employee.
Digital nomads can transform a company. They bring with them new perspectives and skills that can benefit a business in many ways. Their adaptability and willingness to take risks often lead to innovative ideas and solutions. Their commitment to learning and improving themselves can only benefit the business.
By putting a policy in place now, you can prepare for this emerging type of worker. Doing so will ensure your company is ready for the influx of digital nomads to come in the next few years.
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