How to Compliantly Engage Digital Nomads

By MBO Partners | September 10, 2022

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Key Points

Enterprises from all industries have made changes to the way they work, and many are embracing workforces that have a mix of full-time and contingent labor.

When it comes to working with digital nomads, it is important for companies to be aware of and manage any potential risks that could arise.

Similar to engaging other types of contingent workers, companies should tailor policies to align with digital nomads

Remote working has become commonplace for many organizations today. While typical remote workers tend to stay in one geographic area, another group of professionals seek even greater flexibility. Digital nomads are workers who embrace a location-independent, technology-enabled lifestyle that allows them to travel and work remotely. Our latest research found that 16.9 million American workers describe themselves as digital nomads, a 15.5% increase from 2021 and 10.9% increase from 2020.

The Workforce is Changing

Enterprises from all industries have made changes to the way they work, and many are embracing workforces that have a mix of full-time and contingent labor. Adding digital nomads to this mix can help organizations realize greater staffing flexibility, access to on-demand expertise, and lower employment costs.

Digital nomads are, on the whole, well-educated, highly-skilled, and digitally-savvy. Their areas of expertise include computer programming, ID, web design, creative fields, engineering, and digital and traditional marketing.

Compliantly Engaging Contingent Talent

When engaging any type of contingent talent, it is important for organizations to take steps to comply with relevant laws, polices, and regulations. Different legal rules apply to workers categorized as independent contractors and it is important to be aware of these regulations. For example, independent contractors have the right to complete work when, where, and how they choose—they are typically engaged by a company to perform a specific service or defined project.

Managing Digital Nomads

When it comes to working with digital nomads, it is important for companies to be aware of and manage any potential risks that could arise. Many companies don’t have a formal policy or program for managing digital nomads and instead rely on informal agreements. But this approach can be risky from a regulatory and legal perspective.

Similar to engaging other types of contingent workers, companies should tailor policies to align with digital nomads. “Coherent, explicit digital nomad programs make it easier to hire these in-demand workers and engage, reward, and retain existing employees who wish to travel,” write Miles Everson, Steve King, and Carolyn Ockels for a Harvard Business Review article. “The programs can also include policies for hiring freelance nomads, who are less likely to create legal or regulatory problems because they aren’t traditional employees.” Best practices include having a written contract, requiring specific levels of insurance coverage, and having workers sign a code of conduct. Taking the time to create a digital nomad policy can help companies maintain compliant, secure working arrangements.

For more information about creating a digital nomad policy at your organization, contact our team today.

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