Digital Nomads in the Workforce

Since the COVID-19 pandemic, remote work has become a hot topic and a mainstream workforce model. In fact, 75% of people who can work from home do so at least part-time, and they want the option to remain in a hybrid or fully remote work arrangement.

The idea that professionals could work remotely breached the boundaries of working from home to working anywhere in the world. Meet the digital nomad. Digital nomads fully embrace the freedom to work remotely. They leverage technology and communication tools to work while traveling or living in various locations. With minimal possessions and easily accessible internet, digital nomads can work from coffee shops, co-working spaces, hotels, or even their vehicles.

As remote work trends evolve and more people seek a digital nomad lifestyle, companies must adapt their workplace policies, compensation and benefits, communication, collaboration, hiring, and productivity to align with a more digitized and asynchronous dynamic. Incorporating remote work and digital nomadism can be a complex process. But companies can leverage technology solutions to streamline global workforce management and tap into an innovative, international talent pool, which helps them scale and grow.

The rise of digital nomads

The future of work is clearly trending toward flexibility and mobility, particularly for tech-savvy professionals who want to explore the world while making a living. Increased opportunities for remote work post-pandemic, combined with better technology, make it easier than ever for people to be digital nomads. One study showed a 147% increase in Americans who identify as digital nomads from 2019 to 2024, with potential for more growth in the years to come.

It’s not just up-and-coming talent choosing this nomadic work life—many families now enjoy global mobility thanks to remote work, allowing them to share valuable experiences with their children that were previously unavailable. Some places offer communities geared explicitly toward digital nomads, featuring social networking spaces and infrastructure to support their nomadic lifestyle.

Technological advances make it easier for people to work nearly anywhere, but several factors make certain locations ideal for digital nomads:

• Reliable Wi-Fi
• Healthcare
• Affordability
• Safety
• Accessible cafes and restaurants
• Great attractions
• Extended or digital nomad visas

A few popular places to live out digital nomad dreams include Spain, Portugal, Thailand, Costa Rica, and Brazil, due to their combination of great culture, favorable weather, visa options, and affordability.

Why companies should embrace digital nomads

The future of work will certainly include more digital nomads and remote workers, so companies must embrace this growing trend to remain competitive. Thankfully, digital nomads offer companies many benefits that can help them grow and sustain over the long term, including:

• Greater access to diverse, top global talent. Companies with remote work policies can hire from anywhere in the world while remaining compliant, allowing them to tap into localized talent that understands their culture.
• Improved employee satisfaction and retention. When employees are given the freedom and trust to work remotely, they are often more likely to remain with the company.
• Reduced overhead. Companies can save money by minimizing costs related to office space, reimbursements, and utilities, and instead, divert it to other areas of their business.
• Productivity around the clock. With employees working in multiple time zones, companies can leverage their remote workforce to remain productive 24 hours a day.
• Increased brand reputation. Companies that demonstrate they’re forward-thinking and trust their employees can improve their reputation and attract top talent in the future.
• Ability to expand company presence in new markets. Employees working around the globe provide greater access to new and emerging markets that can help companies grow.

With the right technology and tools, a global workforce is more accessible than ever—but not without challenges.

Key challenges of employing digital nomads

As more and more talent demands global mobility, companies must be prepared to accommodate this work model to remain attractive and competitive.

Part of this preparation means employers should be aware of the following potential challenges inherent in recruiting, onboarding, and managing digital nomads:

1. Tax implications. Companies that hire globally must comply with the tax laws of both their own countries and those of their employees’ home countries. Misclassification of workers (employee vs. independent contractor) can affect tax filing, withholding, and compliance, which can be complex to navigate. There is also the risk of triggering a permanent establishment (PE) status, which would result in tax liabilities for the employer.
2. Laws and regulations. Every country has labor laws and regulations that companies must follow to avoid penalties or legal action. These laws pertain to working hours, paid leave, data protection regulations (such as the General Data Protection Regulation [GDPR]), health and safety regulations, and termination procedures.
3. Payroll and benefits administration. If a remote worker is considered an employee, benefits and contributions vary from country to country, so companies must comply with those laws. Employers may also need to contribute to foreign social programs and pay taxes mandated by other countries to remain compliant.
4. Cybersecurity and data privacy. Employers must ensure that devices and software used by their remote workers are secure and comply with the data protection laws in other countries.
5. Communication and time zone coordination. Good collaboration and communication can be difficult when managing asynchronous work across time zones. Conflicting schedules can lead to missed meetings, delays, and poor communication, which hinders team productivity.

Adapting company policies to support digital nomads

Considering the challenges of managing digital nomads, companies must maintain remote work and global mobility policies to provide clear expectations when hiring and onboarding:

• Establish remote-first policies to attract and retain global talent. This includes performance metrics, time-tracking policies, approval processes, and asynchronous schedules to accommodate different time zones.
• Clearly define employee expectations to streamline collaboration. Remote workers should be aware of their availability expectations, the tools to use (e.g., Slack, Zoom, Confluence), and data security policies to safeguard both company and personal information.
• Ensure compliance with tax laws, regulations, and visa requirements. Companies need a comprehensive compliance framework to address laws in various regions, including immigration requirements, tax obligations, and labor laws. An effective framework provides tools, tracking, and procedures to help employers avoid penalties or legal issues in other countries.

Strategies to successfully integrate digital nomads into your workforce

The following tips can help companies adapt to a growing global workforce:

1. Leverage an employer of record (EOR). Using EOR services can help companies comply with regional laws, streamline recruitment and hiring, administer global payroll, manage global teams, and access detailed reports to make informed decisions.
2. Use global payroll and HR platforms. Global payroll management supports a company’s growth and international talent acquisition. Companies can streamline their processes and leverage technology to navigate regional payroll and hiring complexities, thereby remaining competitive and compliant.
3. Support cultural inclusion and engagement. Digital nomads may feel disconnected, so hosting virtual events to promote team bonding and social interaction can help employees feel more connected.
4. Support the well-being of remote workers. Make sure employees understand the available health benefits and resources, encourage virtual social gatherings, and offer co-working space memberships to those who prefer a more social work environment.
5. Build a location-agnostic work culture. When working asynchronously, global teams can benefit from shifting their expectations to focus more on overall performance than time spent working on a task or project.
6. Offer travel-friendly perks or stipends. Employers can support global mobility by offering employees certain perks, such as travel insurance, stipends for technology and accessibility, and flexible paid time off (PTO) policies.

How Velocity Global can help

The future of work includes digital nomads. They must be considered as part of any global workforce management strategy. But companies need to be proactive in sourcing the best tools and resources to manage the complexities of running global operations, which is where Velocity Global comes in.

Velocity Global provides comprehensive solutions, including EOR services, centralized global payroll, talent sourcing, and benefits administration to simplify global workforce management. That way, companies can focus on building, expanding, and sustaining their businesses while Velocity Global supports the talent and infrastructure to keep them running efficiently.

Ready to build and expand your global team confidently and compliantly? Get started with Velocity Global today!

Disclaimer: This information does not, and is not intended to, constitute legal or tax advice and is for general informational purposes only. The intent of this document is solely to provide general and preliminary information for private use. Do not rely on it as an alternative to legal, financial, taxation, or accountancy advice from an appropriately qualified professional. The content in this guide is provided “as is,” and no representations are made that the content is error-free.

© 2025 Velocity Global, LLC. All rights reserved.