A digital nomad is an employee who prefers working from various remote locations rather than working from a fixed location. Bloggers, freelance writers, graphic designers, vloggers, online course sellers, virtual assistants, and other professionals can easily lead the life of a digital nomad. However, in this article, we will discuss those signing up for a contract with an employer.
In this regard, there are two types of digital nomads. The first type of digital nomads stay in their native country but keep hopping to different locations to gain experience working from other places. The second type of digital nomads prefers visiting different countries while employed by the same employer. However, both of them need technological and infrastructure support to manage their work in a hassle-free manner. The basic idea is to keep switching locations while working.
The pandemic-induced lockdown has led to a steep increase in digital nomads worldwide. A 49% increase in digital nomads was recorded from 2019 to 2020 in America. Leading a lifestyle of a digital nomad means choosing a work location that is comfortable and cheap for living. Different people may have other preferences when it comes to working sites. However, their ultimate goal is to achieve a work-life balance while avoiding the negatives associated with a 9 to 5 regular job.
Digital platforms have made it easier to recruit professionals from around the world. However, HR might face several hurdles while managing remote teams and employees. Some employees might not be as responsive as they should be, whereas some may not meet the daily working hours. Therefore, HR managers must have a clear policy to deal with such digital nomads. Here are a few ideas that explain how HR can deal with digital nomads and taxation:
Managing various time zones
The difference in time zones is one of the crucial things that HR managers have to deal with. Employees from diverse locations might be comfortable working at different hours of the day. Therefore, they can ask all the employees to work the same hours. Or else, they can allow employees to work in specific time zones so that the team leaders are accessible during their working hours.
The digital nomad policy could mention extra perks to employees who agree to work from specific locations. Maintaining regularity in the time zones helps teams to manage work and productivity goals seamlessly. However, all digital nomads might not adhere to these rules completely. Such employees can be asked to overlap at least one work schedule with the regular working hours. For instance, employees working in India can agree to work at least a couple of hours as per the US time zone.
Creating the right infrastructure
Working from anywhere means the employees will need to access company software, applications, and other resources at different times of the day. Therefore, the main job of HR managers is to create an infrastructure that is accessible 24/7.
The HR policy for digital nomads must use tools and technology to ensure cybersecurity protocols. The employees must be able to access any files or data they need immediately. At the same time, they must also follow specific guidelines to meet the confidentiality of files and data.
For example, digital nomads might encounter challenges while receiving emails from foreign locations. They must be provided access to virtual mail service to read an email online and forward it without issues. Also, internet connectivity might falter in many locations around the world. Having access to VPN (Virtual Private Network) that enables them to access and browse different portals easily can be of great help.
Support digital nomads emotionally
Working from anywhere and traveling constantly is not as fun as it seems. It usually makes people lonely as they are deprived of close connections like friends and family. Companies can create places where remote teams can work together. These teams should be trained to accommodate digital nomads whenever they wish to work with like-minded people. Or else, they must be encouraged to work in co-working spaces where they can meet like-minded individuals.
Digital nomads should be asked to join social Facebook groups created specifically for them. HR managers can work with ex-pat communities to help and support digital nomads who travel to different countries.
Encourage asynchronous communication
Though digital nomads are known to work at odd hours, most of them stick to the regular working hours, i.e., 9 am to 5 pm, as per their time zones. HR professionals who need to maintain a collaborative workspace can invest in cloud-based communication channels. These channels can help them share their concerns and thoughts whenever they feel like it. Employees should not be forced to raise their concerns only during team meetings and video conferences. They should choose the right time and place to express themselves.
Ultimately, a hybrid work model or completely remote workspace is designed for the convenience of employees. Therefore, HR managers shouldn’t restrict choosing communication channels to express their views and ideas.
Avoiding irrelevant benefits
HR managers should focus on providing relevant benefits to remote workers. Giving remote employees access to the gym or indoor sports isn’t a wise step. Instead, a company can offer a digital nomad visa that allows their workers to work from different locations for a reasonable time without needing to apply for citizenship. The HR managers should provide them with remote work visas and insurance policies valid for abroad locations. Traveling discounts and accommodation options can be offered to digital nomads who want to explore different tourist locations across the globe.
Analyzing compliance costs
Each country has specific rules and laws that may prohibit people from other countries from indulging in certain activities. Companies must adhere to specific international and regional regulations to enable their employees to work from anywhere. If they fail to meet these regulations, a compliance cost has to be paid. Therefore, employees working from multiple locations can burden the company with an exorbitant compliance cost.
HR managers must understand various locations’ compliance costs and learn ways to train the management and employees to adjust in different places. Certain areas might not fit the policy created by HR managers to manage compliance costs as per the available budget. Therefore, the employees should be explained that they cannot take the term ‘working from anywhere.’
Dealing with taxation
If the digital nomads keep working in the exact location for a long time, they might have to comply with the taxation policy of that particular region. Therefore, HR managers should ask them to keep changing their locations. While creating an employee contract, the HR managers must mention them as telecommuters.
Managing multiple tax policies and regulations can be a complicated task. When the location of the company and the workers vary, HR managers must analyze the tax implications carefully to avoid any issues in the future. For example, employees with an explicit employee contract with a US company cannot work for more than six months in India. If they do, they must comply with the Indian tax rules. Therefore, HR managers should be prepared to deal with such complications while working with remote teams consisting of digital nomads.
The employees might need the help of HR managers to claim tax deductions. For instance, US employees who have stayed a significant part of their work year outside the country can request a Foreign Earned Income Exclusion. Per this law, they can claim a tax deduction of up to $100,000 from their taxes if they have worked outside the country. HR managers should collaborate with CAs who have experience handling accounts of overseas employees to help such employees.
Promoting company culture
A company that employs a geographically diverse workforce usually finds it hard to induce the company culture in its employees. It is a critical challenge that HR managers who recruit digital nomads must deal with. For that, they can encourage online events and get-togethers. Employees must be allowed to interact with each other through social channels. Also, attendance and time-tracking applications like Slack could be used to manage asynchronous communication between teams and individuals.
Creating and managing multiple pay scales
The professional payscale might vary from one location to another. The difference between the pay scales of professionals from different countries is especially noticeable. While HR managers have the freedom to recruit employees from any corner of the world, they must comply with the pay scales of that particular location.
One of the most challenging tasks for HR professionals is to create and manage multiple pay scales. Digital nomads can enjoy the freedom of working from anywhere, but the companies cannot keep modifying their pay scales frequently to accommodate their changing lifestyle expenses. The HR managers cannot strictly create pay scales per the digital nomads’ nationality. Their costs can take a considerable twist or turn with the changing locations.
Also, some employees might expect to get paid according to a premium location and work in a relatively cheaper location. For instance, an employee might demand to be paid as per the hourly rate of Washington DC while working in a tinsel town in Mexico. Such practices must be deterred by strictly offering to pay the employees according to their location.
Digital nomad jobs are primarily offered to technologically gifted and advanced individuals. They must be encouraged to work in areas where food, accommodation, and transport options are available at cheap rates. The companies could create establishments in different locations to accommodate digital nomads. At the same time, they can develop employee benefits and perks that are acceptable to one and all.
Strict rules for careless travelers
Digital nomads are generally known to travel without the consent of their reporting authority. They might also break employment rules purposefully or due to a lack of awareness. HR managers must arrange meetings with the management to develop solutions to handle these risks. Strict guidelines must be mentioned in the digital nomad policy to deter employees from traveling too frequently.
The role of HR is pivotal in managing digital nomads consistently. The employees who are not meeting daily targets and work hours should be summoned back to the office. Also, they must be told to ensure quality work and that working from different locations shouldn’t deteriorate their physical and mental health. All these things should be specified in the policy clearly to prevent any untoward situation for both the employee and the employer.
How do we manage digital nomads in the long run?
As remote working inspires professionals worldwide, digital nomads will continue to challenge HR teams. Companies will access a cheaper workforce, creating more opportunities for talented individuals from economically backward nations. Boundaries will no longer restrict them from using their talent to build livelihoods.
HR managers should target individuals who are both flexible and talented. Hiring individuals based on their talent is not enough, as they also need to accommodate the shifting work patterns and conditions. This is true, especially in the case of digital nomads. HR managers keep an eye on the individuals who are fit to work in any work culture. They must promote and groom professionals who can be their business representatives in the long run.
Companies must realize that hiring a geographically diverse workforce can also help them tap the business opportunities available in those areas. Management should convey to the HR teams to find individuals who can be their spokesperson, marketing guy, salesperson, or brand ambassador per the situation’s demands. Digital nomads could be trained to enhance their ability to adapt to difficult working conditions. HR managers should be able to collaborate with outsourcing teams and freelancers to manage productivity goals and deadlines. Finding means to execute work and tasks decentralized can help them meet the work requirements.
For example, employees who are supposed to work with a particular application need to go through intense training sessions. HR managers must find a way to decentralize the task into multiple sub-tasks so that even those who do not know the application can contribute. It will not only help them create a process outline but will also minimize data leakage risks.
Recruiting employees with laptops and internet access is another way of scaling up remote work without much investment. Cloud systems can be set up to address security and data breach issues. HR managers should freely discuss the issues and provide feedback to the digital nomads. They must be able to recognize hardworking and dedicated employees to provide them with lucrative opportunities and promotions in the future. Similarly, lackluster and lazy digital nomads should be terminated by conveying specific reasons. All these efforts will ultimately help them to bring people who can promote the company’s culture and values on global platforms.
HRMS (Human Resource Management Systems) should be employed at multiple levels to ensure digital nomads have access to all the resources required to work peacefully. The HR managers will have to provide reporting tools to remote working employees. They must also integrate systems capable of capturing, modifying, and storing employee data. Such systems will allow them to monitor the remote working employees’ skills, progress, and knowledge. They must also ensure timely payment to the remote employees to maintain their trust and loyalty.
HR managers could create a massive difference by focussing on every aspect of business rather than focusing on only hiring and retaining employees. HR managers should also focus on identifying and developing leaders in remotely working teams. They can organize L&D (Leadership and Development) programs to support and groom the leaders.
With context to the evolution of digital nomads, the critical role of HR professionals is to maintain engagement at all levels. Only an engaged workforce can provide quality work and meet productivity goals. Digital nomads don’t comprise only the millennials who are thrilled by the idea of working independently while exploring the joys of life. They also consist of professionals with physical and mental issues. Therefore, HR managers should also find means to provide medical consultation services to such people.
We have listed multiple tasks and responsibilities the HR professionals in this article. However, these roles and responsibilities can be subjective and may differ for different industries. A well-groomed HR professional will understand the requirements of their company and the needs of their remotely working employees and create an HR policy accordingly.