The Benefits and Risks of Hiring Digital Nomads

UPDATED: July 2, 2024
PUBLISHED: July 9, 2024
Business owner contemplates hiring remote workers

This past year has widely been touted as the year of “return to work.” After extolling the value of hiring remote workers, especially as necessitated by the pandemic, many companies are now requiring employees to return back to the office, either full-time or in a hybrid role.

Take IBM, for example. In a widely circulated 2014 white paper titled “Challenging the modern myths of remote working,” the company, known as a pioneer in telecommuting, highlighted the various benefits of hiring remote workers: time-saving advantages, positive environmental impacts and higher rates of employee engagement, productivity and happiness.

But in January of this year, IBM reportedly issued an ultimatum to managers: move near an office for at least three days a week of in-person work or resign. Other companies have been on a similar trajectory post-pandemic, prompting anxious headlines about the end of the remote-work era.

Nick Jankel, co-founder of leadership consulting firm Switch On Leadership, whose entire team of employees works remotely across different time zones, says he sees a couple of reasons for this trend.

“The level of leadership required to manage people virtually-slash-nomadically is a lot for people and companies,” he notes. On the other hand, he acknowledges the potential that comes with virtual work. “You can do quite a lot virtually. It has surprised us what we can do.”

Be aware of the risks and determine what works

Leaders managing remote workers need to consider everything from a need for different kinds of communication and management styles to offsetting relationship costs to juggling different time zones. “You need a functioning way of having your workflows executed and completed to good quality, [even] when you’re not awake to manage them,” Jankel says. “The biggest challenge I’ve seen play out with countless clients is the level of commitment and care.” He underscores that it’s essential to have “a high level of trust” when hiring remote workers who work independently. He advises leaders to “bring into the visible what is usually invisible. That means unbelievably clear communication. It means negotiating agreements and the consequences of missing agreements.”

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Some remote employees with little oversight can overcharge and underwork. This is something Jankel says he’s had personal experience with. “That’s expensive, and it’s a risk. And if you’re doing that at a level of a 10,000- or 20,000-person company, then you want to reduce the risk. You’re going to bring people back to the office.”

Managing remote workers

A breakdown in company culture and relationships is another concern for companies. “It’s really hard if you don’t meet in person because you can’t get that trust level, the safety, what we call in our work the ‘container,’” Jankel says. “If you are a fully virtual workplace, it is quite hard to get a kind of cultural vibe, climate, mojo.”

Instead, he coaches leaders to “empower” and “inspire” remote workers, “to create space for them to experiment and have ideas and innovate.”

A shift in traditional manager-employee power dynamics is at the core of the digital movement. “You have to rely on a much more relational game of leadership, where you are building trust, you’re building care, you’re making sure they get the integrity of what you’re doing and that it needs to be done to this level of quality. You have to do a lot more boundary-ing around what’s appropriate, what’s not, what you expect and what you don’t. You have to be much more explicit.”

See the benefits of hiring remote workers

Digital nomads can have notable benefits for companies, Jankel says. “This is an unusual lifestyle choice, but these people are brave, right? They’re self-empowered, and they’re self-managed, in that no one’s told them to do this; there’s no requirement.”

For example, companies might not need to worry as much about well-being programs if they have employees who already feel they are “living their best life” or “not sacrificing their choices to get paid.” Another benefit can include the exposure a company receives through the wider diversity of people its nomadic employees encounter in far-flung locales.

Firms do need to consider the legal, financial and tax implications of where their employees are located and the framework in which they’re hired. A 2021 report from labor and employment law firm Littler Mendelson advised devising strategies for structuring these relationships legally.

“There’s obviously a big difference between if they’re a freelancer or if they’re a five-day-a-weeker,” Jankel notes. “I think digital nomads tend to work best as freelancers or contractors.”

“I wouldn’t ever say to someone, ‘You should hire some digital nomads,’” Jankel says. “For me, it’s always about the right person. And if they happen to be a nomad, don’t be afraid. Don’t think it can’t work because you might get loads of benefits that you can’t see yet or don’t understand yet.

“If you want to hire the most talented, committed and interesting” employees, particularly among 20-something Gen Z and millennial nomads, Jankel says, “you may have to realize that they may not want to work in your office.” 

This article originally appeared in the May issue of SUCCESS+ digital magazine. Photo by fizkes/Shutterstock.com

Jennifer Green has been writing about the entertainment industry for more than two decades, and her work (archived at filmsfromafar.com) has appeared in a variety of international publications and websites. She splits her time between the US and Spain, and when she's not teaching or spending time with her family, she can be found in front of a movie screen.