What is Digital Nomadism?

Digital nomadism is a work arrangement where professionals perform their jobs remotely while frequently moving between locations. Unlike traditional remote workers with a fixed home base, the digital nomad lifestyle involves working from various locations, often far away from their home country, relying on technology to stay connected and productive. However, with the current trend of return-to-office (RTO) mandates gaining momentum, HR leaders must reassess how digital nomadism fits into evolving corporate policies and workforce strategies.

Why Digital Nomadism Matters for HR and Employers

For HR and business leaders, digital nomadism presents both opportunities and challenges. While companies can attract top talent by offering location flexibility, they must also navigate compliance, payroll, and tax complexities. The increasing push toward in-office work—evident in mandates from organizations like the U.S. Treasury, SEC, and private sector giants—raises new questions about whether digital nomadism remains a viable long-term work model.

The Rise and Shift of Digital Nomadism

Digital nomadism surged during the remote work boom of 2020-2022. According to research by MBO Partners, the number of American digital nomads grew to 16.9 million in 2022, more than doubling since 2019. Countries responded by creating specialized digital nomad visas to attract location-independent employees and boost local economies.

However, with major companies now enforcing RTO policies, HR teams must evaluate whether digital nomadism aligns with new corporate expectations. Some organizations are embracing a hybrid model that accommodates limited remote work, while others are tightening remote work privileges altogether.

Who Are Digital Nomads?

Digital nomads fall into different employment categories:

• Remote Employees in Distributed Teams – Employees of remote-first companies who may work internationally.
• Hybrid Workers Seeking Short-Term Flexibility – Employees who request temporary remote job arrangements while traveling.
• Freelancers and Contractors – Independent workers who operate outside of traditional employment structures.
• Entrepreneurs and Business Owners – Individuals running online businesses while living the nomadic lifestyle.

The challenge for HR leaders is determining which employees can operate as digital nomads without compromising productivity, compliance, or team collaboration.

HR Challenges and Considerations for Digital Nomadism

1. Legal and Tax Compliance

A major concern for employers allowing digital nomadism is ensuring compliance with tax laws, labor regulations, and work permits across different jurisdictions:

• Permanent Establishment Risks – Employers must ensure that an employee’s location doesn’t create unexpected tax liabilities for the business.
• Employment Law Variations – Local labor protections may apply depending on where the employee works, creating compliance hurdles.
• Remote Work Visa Requirements – Many countries now require formal digital nomad visas, making it necessary to track employee locations.

2. Payroll, Benefits, and Compensation Adjustments

For many digital nomads, managing compensation adds another layer of complexity:

• Should salaries be adjusted based on an employee’s location?
• How do benefits, including healthcare, insurance, and retirement plans, apply to employees working across borders?
• Should they be classified differently from other employees (e.g., as contractors)?

3. Cybersecurity and Data Protection

With employees working in various locations—often using public Wi-Fi or unsecured networks—companies must reinforce data security policies:

• Enforce VPN and two-factor authentication to protect sensitive data.
• Create clear policies regarding laptop and other device security and company-approved software.
• Ensure compliance with GDPR, CCPA, and other data regulations around the world.

4. Time Zone Coordination and Productivity Management

Time zone differences can disrupt collaboration between digital nomads who work remotely and office-based teams. Employers should:

• Define core working hours to ensure availability across time zones.
• Encourage asynchronous communication to reduce meeting fatigue.
• Implement performance tracking based on deliverables, not hours logged.

5. Workplace Culture and Team Cohesion

With RTO mandates growing, there’s increasing concern that remote workers—especially digital nomads—may feel disconnected from in-office employees. HR teams should:

• Create structured touchpoints to integrate nomads into workplace culture.
• Offer virtual events, mentoring programs, or co-working stipends to keep remote employees engaged.
• Ensure digital nomads have equal career growth opportunities compared to in-office workers.

How Employers Can Adapt to Digital Nomadism

Develop a Clear Digital Nomad Policy

If an organization permits the digital nomadism life to its team members, HR should outline clear policies on:

• Who qualifies for remote work abroad.
• Time limits for working outside of the business’s primary location.
• Compliance with visa, tax, and labor laws.

Use Global Payroll and HR Solutions

HR teams can leverage Employer of Record (EOR) services to simplify international employment, allowing businesses to:

• Pay employees legally in different countries.
• Manage benefits and compliance seamlessly.
• Reduce administrative burdens associated with cross-border employment.

Balance Flexibility with Business Needs

Rather than outright rejecting digital nomadism, companies can create a structured remote work program that:

• Allows temporary remote work rather than permanent location independence.
• Requires employees to maintain an occasional office presence.
• Aligns remote work policies with RTO expectations to maintain a strong company culture.

Digital Nomadism in an RTO Era

Digital nomadism remains a valuable work model, but it’s shifting from being a widespread trend to a niche offering as more companies reinforce office-based collaboration. Employers must decide whether the digital nomad lifestyle aligns with their long-term goals and career path, and how it fits into broader return-to-office strategies.

HR leaders who take a proactive, policy-driven approach will be best positioned to navigate this evolving landscape—ensuring that both business priorities and employee needs are met in a way that’s sustainable for the future.

What is a Career Path? →

Digital Nomadism FAQs

Which labor laws apply when a digital nomad works remotely from another country?

The rules depend on where they’re working. Some countries consider remote workers under their local labor laws, meaning employers might have to comply with things like minimum wage, benefits, or termination rules. Taxes can also get tricky—both the company and the employee might owe taxes in different places. And even though they’re working remotely, some countries require a visa or work permit. The safest bet? Get legal advice or use a global employment service to stay compliant.

What tools and software should I provide to enable efficient remote work?

The right tools make all the difference in keeping digital nomads productive and connected. A solid communication platform like Slack or Microsoft Teams helps with messaging and calls, while a project management tool like Asana keeps tasks organized. File sharing needs to be seamless, so something like Google Drive works well. Security is also a priority—using VPNs and two-factor authentication helps protect company data. On the HR side, a platform like TalentHR that supports integrations to many of the abovementioned tools makes it easier to manage contracts and compliance without headaches.

How do I attract and retain top digital nomad talent?

Digital nomads value freedom, but they also want stability. The best way to attract them is by offering real flexibility—trusting them to manage their own schedules instead of micromanaging. Competitive pay is also key, especially since the cost of living varies depending on where they are. Beyond that, investing in career growth opportunities, like skill training and advancement paths, makes a big difference. Culture matters, too. Remote workers don’t want to feel like outsiders, so it’s important to create a company culture that includes them, not just tolerates them. And, of course, you need to meet them where they are. Job boards like Remote OK and We Work Remotely are great places to find top-tier digital nomad talent.