According to the 2022 MBO Partners Digital Nomad Study, the number of digital nomads in the American workforce surged 131%, to 16.9 million people between 2019 and 2022.
And as the study chart below shows (click to enlarge), the biggest surge in digital nomads came from traditional job holders.
The shift to remote work unleashed employees from their offices and desks, allowing many to become nomadic.
Unlike regular remote workers, who tend to stay in one place or shuttle back and forth between their home and a vacation retreat or a relative's house, digital nomads travel and explore while working.
This, unfortunately, can lead to legal issues, cybersecurity challenges, and tax problems.
And these issues can be expensive for firms and their employees.
Fortune's 'Stealth workers' lying to their bosses about where they work are costing companies tons of money provides multiple examples of how firms can get into trouble by allowing their employees to work anywhere they want.
The biggest issue is that digital nomads can easily and accidentally create a new "permanent establishment" for their employer in the state or country where they're working.
That exposes the employer and the employee to the new jurisdiction's tax, regulatory, and employee compliance rules and laws.
In addition, since many digital nomads travel without their firm's knowledge, their employers may wind up breaking employment laws and regulations without any awareness that they are doing so.
The answer to these issues is to create a digital nomad policy. And all firms with digital nomads - which is most larger firms - should have such a policy.
The Wall Street Journal's Work From Anywhere! (Well, Not Really) covers several companies that have added digital nomad policies. Key quote on Airbnb:
"Airbnb, which has as much skin in the free-range game as anyone, touts employees' license to "live and work anywhere." In practice, company policies keep roughly two dozen countries off limits. Stays in foreign countries can last no more than three months, and employees still need permanent addresses. So, not anywhere."
The Staffing Stream's Implement a Successful Digital Nomad Policy with These Best Practices provides a good starting point for creating a digital nomad policy.
And our Harvard Business Review article Your Company Needs a Digital Nomad Program goes into more detail on why they are important.
The digital nomad trend will likely continue to grow.
Because of this, firms of all sizes need to be aware of the risks associated with digital nomads - and have policies to mitigate these risks.
