Cost Savings For Employers of Digital Nomads

by Joshua Howe / Nov 15

With any employee there are questions of return on investment.  The two components of the calculation is the income, what people are producing, and the outgoing, the cost of having individuals decentralized and working from the field

Measuring what people are producing does not vary greatly whether an individual works in an office or from the road or home.   There is an assumption that because an employee works in an office and can be observed, that they’re doing their work and being productive.  The opposite is true of those who are nomads.  There is the assumption that because they’re not being observed, that there is ample opportunity for slacking off.  Both of these have some truth, however, ultimately how we measure an employee’s work is by productivity.

Project management theory focuses not only on the the product but the process, and identifying measurable steps in that process.  In order to measure a digital nomad’s work it is important to have agreed time frames and short term goals.  Maintaining good communication with in house employees and nomads is imperative. Whether this is completed by e-mail, telephone, video conference or in person depends on the needs of the industry, project, and individuals.  For industries which don’t have a project focus, but are service delivery orientated, there are other metrics which can be used to measure productivity, such as billable hours, contact hours, or units sold.

Measuring the cost of digital nomads has two components. There are the cost savings by having a worker decentralized and additional costs compared to office based employees.

• Office Space: Saving on rental or purchase of office space.
• Heating, Cooling and Electricity: With fewer office based employees, and less floor space, heating cooling and electric costs are minimized could mean a substantial savings to a large business.
• Equipment: This can be an area of either savings or cost. Though not working in an office, thus saving on equipment there, individuals may need the equipment in their homes to work effectively.
• Insurance: If the customers are being seeing their homes and offices rather than your business’ office, liability insurance premiums are reduced.
• Personnel: More and more employees are looking for flexible work spaces and schedules. Providing this to digital nomads can translate into happier employees which means more productivity and less turnover resulting in significant recruitment and training savings.
• Travel: Having employees spread out over large geographic area allows employees to be closer to the work rather than having to travel which results in reduced travel costs. This also has the added benefit of better customer service by having better local knowledge and greater face to face contact with your customers.
• Technology: Digital nomads would require a different set of tools to be effective in the field versus in the office. Rather than desktop computers, they would require laptops which traditionally have a shorter life.  They may require remote access to files stored on company servers, wireless Internet access, and mobile phones and accessories.

Having a mobile workforce means exploring what productivity means to you as the employer and having clear communication of goals and progress.  The benefits of having digital nomads outweighs the costs. It can lead to reduced infrastructure costs, better connections with customers, and happier employees.  All of which are cost savings to the employer.

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