Ten years from now, how, and where we work will have changed dramatically. The COVID-19-induced lockdowns during 2020 offered unprecedented opportunities for employers around the world to trial working from home at scale. They also led vast numbers of employees to understand that in some sectors with modern technology you can effectively work from anywhere, provided you have good connectivity!
Digital nomads work in a variety of professions that are conducive to remote work, each adapting uniquely to this lifestyle, from graphic designers and Web/App developers through to consultants, educators and virtual assistants.
The Human Factor
The working population is changing as Baby Boomers retire and Millennials and Gen Z make up the bulk of the workforce. Their expectations of what they want from an employer and how they are employed are challenging industries and employers to adapt. Although many employers have been calling their teams back to the office, the pandemic ushered in new attitudes about where to work.
The younger the worker, the more likely they are to want to work from wherever they want. A 2023 report by MBO Partners, found that 58% of digital nomads were from the younger generations, with 37% from ‘Millennials’ (born between 1981 to 1996) and 21% from ‘Generation Z’ (born between 1997 and 2012). This compares to Generation X (1965 to 1980) with 23% and Baby Boomers (1946 to 1964) with 13%.
These shifts reflect changing dynamics in the workforce and possibly varying attitudes towards remote work and lifestyle across the generations. And the report expected this trend to continue as more Generation Z join the workforce and potentially adopt a nomadic working lifestyle in the next seven years.
The Workplace
We are moving to a digitally streamlined ‘business as usual’ and employers are already wondering whether they need to suffer the overhead costs to house everyone in offices all the time. This will vary by sector and role, but employers can benefit from major savings by allowing those that wish it, to work remotely, and ‘hot desk’ those that want a hybrid option with some remote and some office-based days.
With employees increasingly choosing where and how they work, employers now have to design work processes that support both remote workers and conventionally sited employees, concentrating particularly on knowledge sharing, coordination of work, task-related communications, and team relationships to encourage performance and innovation.
Work intensification and remote workers’ career development need to be monitored and managed, as well as making the cost-benefit calculations around the ‘hard’ elements of technology and office space. How effectively employers can adapt to this will impact their ability to attract and retain talent.
The Impact
Certain businesses now work on fully remote work models, taking advantage of the increasing flexibility in workplace arrangements across various industries. For employers, there can be big benefits. They can operate with smaller offices, they can draw employees from a much wider geographical pool and, due to the flexible working conditions, they can retain them for longer.
They will benefit from a stable workforce with a depth of knowledge and experience that will grow with the business and save on time and costs on the cycle of recruitment. There is also the opportunity to place some jobs in countries that have good connectivity, but lower salary expectations.
Employees gain choice. They will be able to decide how and where they work and have the flexibility to adapt as their life changes while maintaining continuity of employer and career. How you choose where to live will also change. Connectivity will be more important than physical transport links. That gives small jurisdictions and towns and villages the opportunity to compete and grow their economies.
The flip side is that competition for roles will not only come from the development of Artificial Intelligence (AI), but people will also be competing against a much wider global pool with different salary expectations.
Saving
For generations, the mantra has been to work hard, save and invest your money. Then, at around 65 years old, you can finally retire and enjoy the fruits of your efforts. But many are now questioning this traditional narrative.
Saving for the future is an important objective for the younger generations as we move away from more paternal systems. But movements such as ‘Financially Independent, Retire Early’ – often termed ‘FIRE’ – show there is more focus on financial independence at an earlier age.
Financial independence is not about being rich, it’s about identifying what you personally need. People following the FIRE path aim to have enough income to cover their needs and comforts without having to continue to work. The overall goal is to accumulate enough wealth that you can retire early and on your terms. Many of those pursuing FIRE aim to retire between 30 and 50.
Employers and individuals can use international pension and savings solutions to provide the foundation to save easily for the future. These pension and savings plans provide the portability required so that members have the freedom to roam, as well as the flexibility to stop and start contributions as their circumstances change.
For employers, they can use an international occupational solution to contain all the disparate or mobile components in their workforce in one flexible plan to gain simplicity, efficiency and economies of scale.
For individuals, they can opt for an international personal pension that will travel with them and their laptop wherever they go.
For more information about Sovereign’s international pension and savings solutions contact Jo Smeed below.
