What are digital nomads and how easy is it for businesses to cater for them?

The rise of digital connectivity and the affordability of portable devices has meant that employees realize they are no longer shackled to their desks. There is an emerging trend within the workforce for employees to abandon traditional approaches and travel the world whilst working remotely.

Digital nomads are typically (but not exclusively) younger people who like to travel. Their reliance on digital devices means they commonly operate in technical fields or sectors that use technology a lot. Common professions with digital nomads include journalists, developers and coders. However, a digital nomad can work in any role that can be conducted using a good laptop.

“It has surged in popularity, driven by technological advancements and shifting work cultures,” says Shyra Sagun, head of global immigration at IAS.

“Remote work has become mainstream due to the Covid pandemic, prompting millions to adopt location-independent careers. “Digital nomads worldwide exceeded 35 million in 2023, with a growth trajectory fueled by freelancers, entrepreneurs, and remote employees. Forty-five percent of our Spanish work is in digital nomad visas and it continues to grow.”

Digital nomads represent an extension of remote working but with a key difference: their transient nature. Digital nomads are reliant upon laptops, or similar portable devices such as tablets, and a stable internet connection. Other tools they may use include digital cameras and microphones. The multi-functionality of smartphones means they have also become an essential tool for digital nomads. As a digital nomad’s income is reliant on technology, they require powerful devices.

Having an employee who moves every few months naturally impacts the business operations of the organization for which they work. For example, their working hours and IP address will be regularly changing.

There can be challenges associated with export controls when sending information to different countries, as well as with differing data protection regulations between countries. Organizations also need to consider the employee’s tax codes.

Likewise, there is the need to address the issue of access management for the changing IP address of employees, scheduling challenges for team meetings, as well as team-building in the absence of face-to-face contact.

However, incorporating digital nomads into an organization can provide a diverse talent pool, a happier workforce, and a demonstrable improvement in productivity. Exposure to different lifestyles also encourages a culturally aware workforce.

For the individual, there is a lot to gain from adopting a digital nomad lifestyle. They have the benefit of being paid whilst traveling and they typically enjoy a better work-life balance. There is an element of truth in the stereotype of a digital nomad redesigning a company’s website whilst relaxing in a hammock on a beach.

“The people that are attracted to the digital nomad lifestyle can often be high performers in their company that want to take on a new challenge,” says international relocation expert Kristin M Wilson, author of Digital Nomads for Dummies. “Also, when people travel, they're going out, meeting other people and getting inspired, and then they bring those innovations back to the company.”

Downsides of being a digital nomad

It's not all sunshine and rainbows for digital nomads. Being a digital nomad can be a lonely lifestyle, which can put a strain on long-term friendships and relationships. It is also a lifestyle that can lead to burnout: digital connectivity, combined with a need to demonstrably prove their usefulness, means that digital nomads often struggle to switch off from their work. They also need to make all their travel and accommodation arrangements, as well as ensuring all their paperwork is in order for each country they operate from.

The digital nomad lifestyle is also reliant on having the technology to hand, with only limited technical support available remotely from the organizations they work for. In some countries, there is also a significant risk of industrial espionage if relying on local IT services for support and maintenance.

The typical regulatory framework that allows digital nomads to work in different countries for extended periods is the digital nomad visa. These are different from tourist visas, as they allow bearers to live and work in a foreign country for longer (between six months to two years) and allow people to work remotely from a foreign company or be self-employed. Many, but not all, countries offer digital nomad visas and there is no standard format, so each visa can be subtly different. Arranging the paperwork can be a complex and time-consuming task.

“While standard work visas require local employment contracts or job sponsorships, digital nomad visas usually require proof of remote income, often through a minimum monthly earning threshold,” explains Sagun. “Applicants may need to demonstrate financial stability, provide health insurance coverage, and pass background checks. Some nomad visas offer tax incentives or simplified tax regulations, making them financially appealing.”

One of the biggest impacts on digital nomads occurred during the Covid pandemic, when lockdowns were implemented and nations closed their borders to travelers. This led to some digital nomads becoming stranded in whichever country they were in. During this time, although organizations embraced remote working, many became fiscally cautious, reducing the available budget for freelance work. Since many digital nomads operate as freelancers, this group was disproportionately affected.

Since the pandemic and the widespread acceptance of remote and hybrid working patterns, there has been a rise in digital nomads. More people are turning to the digital nomad lifestyle, as the enabling technology becomes ever more widespread and easily available.

“More digital nomads operated as freelancers before 2020, but after 2020 there are more remote workers than there are freelance digital nomads,” says Wilson. “There's no exact data on how many people are digital nomads, as the nature of the lifestyle means it's very fluid.”

Digital nomads are here to stay, and are likely to become more widespread. The technology has become widely available and remote working practices during Covid demonstrated the effectiveness of online work by maintaining productivity. Quite possibly, just as career breaks have been popular in the past, many could now spend time as a digital nomad; working whilst travelling the world.