While not as common as the regular shepherds in a nativity display, a sleeping shepherd is still a figure often scene. Where does this sleeping shepherd tradition come from?
You're probably familiar with the many references of shepherds within the bible. While his sheep were grazing, shepherds would spend weeks living, and sleeping, outdoors while they tended their flock.
Also frequent in bible readings are waking angels - the angel waking Elijah in I Kings 19 is the first that springs to mind!
So the knowledge that shepherds would have needed to spend time outdoors, sometimes sleeping, they seem a realistic addition to any nativity scene. Also, the imagery of an angel waking a sleeping shepherd with news is a beautiful addition as well.