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By Charles Rodriguez, Vice President of Human Capital Advisory


Before Covid, you might remember when employees came to work at the office, left for home, and returned the next day. Fast forward to the pandemic: remote work became the norm for many industries. As time passed, hybrid schedules competed with fully-remote setups, and many employees with the opportunity to do the latter relocated altogether.

Some members of the workforce that have the option to continue with fully remote workplaces have started to explore the “digital nomad” lifestyle. This means that you might not know where a team member is, geographically, on a given day unless you ask them. The digital nomad is also distinct in that they relocate often, some without plans for having an actual home base.

Definitive research about digital nomads is fairly new. But we do know that most are Americans, and the majority are millennials between 30 and 40 years old. One study from 2019 and 2020 suggests that their numbers swelled from about 7 million people to just under 11 million. While freelancers, contractors, and artists were the most typical nomads pre-COVID, employees in more “traditional” roles and sectors joined them in huge numbers once the wider shift to remote working took hold.

More broadly, a McKinsey study demonstrated that 87% of Americans who were offered remote work would take it, and among those that have it, as many as 32% work away from a traditional office environment more than five days a week. Remote work of some nature, according to Gallup in 2021, continues to trend.

Managing digital nomads
Your employee may ask you why it matters where they are, as long as phone calls and emails are promptly responded to. In a number of situations, it might not. However, your response will need to factor in things like where they will be, and for how long, because of elements like state taxes, paid time-off benefits, training needs and requirements, workers' compensation, and the ability to offer medical and dental coverage.

Managing employees is full of unintended consequences, and this is no different. There are a few practice parameters to consider, whether you intend to make the digital nomad option a selling point for new hires or accommodate existing employees’ wish for this level of maximum flexibility.

Approving an employee's request to work remote
A request for remote work shouldn’t be carte blanche. Nor should it be without periodic review in the C-suite. Realistically, the primary factor should be what works best for business operations, what practical inefficiencies may affect either party, the employee’s individual performance, and that of the team.

You do have a right to know where your employees are. Within reason, this is a suitable expectation to uphold. Depending on how much of a practical inconvenience it poses for company operations, you are within your rights to control where team members can and cannot work from. It’s wise, however, to give the reasons for a “no” and make them clear, such as tax or PTO considerations.

It’s wise to review approval for a digital nomad’s wish on a case-by-case basis. This will allow you to consider whether this is a state—or country—you are effectively willing to extend a work site presence to.

Employee benefits for nomad team members
Carefully monitor residency criteria for group health plan participation and insurance plan designs each year. You will, also, have to offer this person vacation time, even if they are truly “nomads.” Some states mandate paid time off and leave, but more importantly, you want to reinforce the firm boundaries of when someone is engaged and available.

Nomadic freedom should not be viewed as a tradeoff for less vacation time, because it helps the individual keep to a schedule and helps maintain the commitment to a team. However, if your digital nomad never puts in for any vacation time, it’s a sign there’s an engagement problem—and worse, a greater risk of burnout.

Account for time zone differences in the worldwide work “environment”
You will need to account for time zone differences in the worldwide work “environment.” While this sounds obvious, it’s easily overlooked, especially from a scheduling and communications perspective. If there’s any space for creating geographic restrictions on where digital nomads can be, unless they’re on vacation, it might be in asking that they are only two or three time zones away.

Establish consequences for policy breaches
Employees who choose to be digital nomads are taking on greater responsibility, and they need to understand that the proverbial road runs two ways. Communication needs to be robust. Making decisions without telling the employer can be risky for all parties, and is a complete no-no. Establish clear expectations about what will happen—up to and including termination—if standards and expectations are breached.

Convey to digital nomads that their permission to work this way is conditional, and set out those conditions in writing, with abundant clarity. They will be subjected to further restrictions if tasks aren’t being completed or responsibilities to clients are regularly missed.

The desired tone isn’t that you’re expecting this to happen—it is simply communicating what will be needed in the event things don’t turn out as planned.

Assign a staff member to manage digital nomads
Lastly, assign a specialist in the company to manage digital nomads, if your staffing situation allows for this. Ideally, this is a professional that holds some overseas work experience themselves, or at least close familiarity with human resources and staffing particulars.

Welcoming digital nomads can be a win-win for a company
Creating space for the digital nomad in your organization presents more opportunities to attract and retain talent. However, it also creates a number of additional considerations, ones that can become pain points if not properly managed. You can ultimately say “yes” to an employee who wants to travel widely and frequently, but create an ongoing plan that works both for them and your organization.

This article originally appeared in AllBusiness.



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