Because of the pandemic, the shape of the modern workforce is changing. Thousands of companies have been forced to transition to some manner of work from home, partial or total, and many of them will not come back. Many other businesses already used remote or distributed teams for some or all of their business.
What is remote work? What are distributed teams? While the terms are often used interchangeably, they have different definitions, and it’s useful to understand the distinction when putting one together.
What is a Distributed Team?
A distributed team is generally a hybrid team. Some of your employees work in a central office or a coworking space, while others work from home or other locations. They might be local to you and come into the HQ as necessary, or they might be as far away as another country.
Distributed models are increasingly common throughout all manner of businesses today. They may hire remote workers for specific categories of tasks, like data entry, virtual assistance, or tier 1 support. There is a lot of overlap between this kind of distributed team and companies that outsource those same tasks to contractors or service providers.
What are the Benefits of a Distributed Team?
What makes a distributed team a practical choice for a business? It comes with a variety of benefits.
Some employees treat working from home as a benefit. This can be a selling point for hiring workers who would otherwise want to negotiate a higher salary, have you expense their move, or reimburse them the cost of a commute. According to Sarah White on Monster.com, working from home has numerous benefits, including health benefits for the employee.
Remote work is also becoming more and more common in many roles and industries. Even without the influence of the pandemic, remote work was on the rise. Companies are increasingly discovering that many roles no longer need to be directly supervised. Many employees are more motivated, happier, and more productive when given the flexibility to work from home.
A distributed team reduces office needs. A larger team in a traditional workplace means large space requirements. Everyone needs a cubicle or office; everyone needs computer hardware and tools; everyone needs access to restrooms and facilities. Your location needs adequate parking, adequate climate control, and adequate IT infrastructure.
With a distributed team, these needs drop considerably. What would formerly require a full floor of an office building might only require a couple of rooms with a suitably distributed team. Many modern businesses with dozens of employees run out of the equivalent of a two-bedroom apartment.
Distributed teams promote the use of cloud applications, reducing IT costs. With the increasing prevalence of cloud services and software, IT costs drop. You’re no longer required to maintain on-premises infrastructure for your team. An MSP can provide hardware support for your company, while cloud services can provide everything from storage to accounting to development environments. Overall, it’s frequently cheaper to operate a distributed team than an entirely on-premises team.
What are the Drawbacks of a Distributed Team?
Distributed teams do still have a few drawbacks stemming from their nature as a hybrid solution.
Many distributed teams still need to maintain a central office. Depending on your company, you may not be able to move to a fully remote structure. Shipping and fulfillment, manufacturing, hands-on testing; these tasks cannot be performed remotely in most situations. If you have to maintain a headquarters, you still have the expenses associated with it. In a way, you end up with the worst of both worlds.
Distributed workers may feel left out of company culture. Whenever there’s a clear divide between two groups of people in the workplace, care must be taken to ensure both are treated equally. Igloo Software’s State of the Digital Workplace survey from last year reports that 80% of remote workers feel left out of the workplace.
Be aware of common issues that occur in hybrid workplaces. Employees who have to commute may be jealous of those who don’t. Workers who work remotely may feel left out of company events they can’t attend. The onus of inconvenience can all-too-often fall entirely on the shoulders of the remote workers, whose schedules get ignored. These issues foster differences and disagreements between parts of the team, which leads to a disgruntled workforce.
You lose access to regular in-person meetings. There are quite a few benefits to having everyone in the office. Among them is the ability to call an impromptu meeting when an issue comes up. It’s a lot less convenient to call up a dozen Zoom participants or set up a conference call for a similar purpose.
There are other perks to in-person work as well. Don’t underestimate the power of small talk in the break room or around the water cooler as a source of social connections within the team. We covered some tips and strategies for managing a remote team to alleviate these issues in another post.
What is a Remote Team?
The term remote team is often used interchangeably with distributed teams, or as a general term for all styles of partial and completely remote teams. A partially remote team would be partially not remote, so, exactly like a distributed team. A fully remote team, meanwhile, has no centralized headquarters. Everyone, from the owner to the intern, works from home.
In our definition, a remote team is a business that operates entirely from home offices. There is no centralized headquarters, just a registration address for business purposes.
One example of a successful business operating as a remote team is Buffer. According to CEO Joel Gascoigne, it has worked out well.
“I am happy to report that I am in love with the choice we made to be distributed all across the world.”
Buffer has operated as a fully remote team since its early days in 2012, with almost 100 people working for the company in nearly every time zone around the world.
What are the Benefits of a Remote Team?
Fully remote teams have a variety of benefits, as espoused by companies like Buffer.
You do not need a home headquarters and all of the costs associated with it. Rent, heating and cooling, power, dedicated internet, maintenance; all of these costs are eliminated when you don’t have a headquarters. AJ Agrawal, CEO of Alumnify, writes:
“No matter where you happen to be in the US, you are going to lose hundreds of dollars every month by having an office. For many entrepreneurs and startups, this is unacceptable and risks bringing down the fragile success they have achieved.”
Employees can work from anywhere, giving them the freedom to travel. There’s a sort of life cycle to the successful remote worker. Initially, they feel stifled and stuck at home all the time, and their work-life balance suffers. Eventually, they realize they have the freedom to travel, so long as they can access their tools and get their work done. This opens up a whole new world of possibilities and is where many remote workers genuinely shine.
There’s no divide between office and remote, so there are no social or cultural differences to worry about. As mentioned above, one of the most significant risks of a partially remote workforce is the divide between the office workers and the remote workers. When everyone is remote, everyone is on equal footing. No one feels left out, and it’s easier to share the burden of scheduling and communication when everyone is in the same situation.
Remote teams can hire from anywhere in the world, putting talent and experience above location or mobility. Timely, a Norway-based company, writes:
“When you need to hire employees from a set location, you limit your talent pool. In contrast, remote work lets you access the very best talent across the globe – especially when the flexibility remote working brings is becoming expected by employees.”
Not only is remote work a selling point, but it also broadens the candidate pool you can use to find new hires.
A global reach also helps fill positions for which there is a shortage of local candidates. Many extremely skilled workers in STEM fields are located outside of the US, but that poses no problem when you can simply hire them to work remotely.
Remote teams have people everywhere and are thus very responsive around the clock. Joel Gascoigne cites it as one of his primary benefits in bringing Buffer together as a fully remote team.
“A key part of our vision is to set the bar for customer support. We obsessively track the happiness of our customers and our speed to respond to them. We have more than a million users and we reply to 80% of emails within 1 hour. We couldn’t achieve this level of service without being spread across multiple timezones.”
While this is most prominent in customer-facing roles, such as support, it’s beneficial for most companies.
What are the Drawbacks of a Remote Team?
Fully remote teams have a few drawbacks. Some of them shared with distributed teams, and some unique to them.
Some otherwise excellent employees can’t cut it as remote workers. Make no mistake; working remotely is difficult. The atmosphere of being stuck at home, particularly during a pandemic, is stifling. Time management and self-motivation are vital in remote workers.
The research director for 451 Research, Chris Marsh, says this.
“An outcome of what’s happened over the past couple of months, and this massive shift towards mass remote working, is just a huge loss of context around work. That context would otherwise have been captured by employees through meetings, through attending events, through water cooler moments.”
Fully remote workplaces can simulate some of this by maintaining casual “off-topic” communications channels, like Slack. Buffer, and many other remote companies, also host annual all-hands get-togethers for face to face time, which helps knit the team together.
Distributed schedules can make communication more challenging and leave some people feeling excluded. A common issue with remote teams is focusing schedules around the majority, which leaves people in distant timezones bearing the burden of getting up early or staying up late for a meeting.
Additionally, different groups of employees may have different communication preferences. Some are used to picking up the phone, others rely on email, and yet others take to Slack or another IM program as their first choice. Unifying communications channels, workflows, and processes throughout your whole workforce is a significant hurdle for many businesses making the transition.
Remote teams are usually dependent on reliable internet access and are at the mercy of their ISP. When you have a central office, you can pay for high-end business internet service with uptime guarantees. With a remote workforce, you can rarely extend that same luxury to your team.
“Many Americans also lack the facilities or sufficient internet capacity to work effectively from home. More than half of those surveyed who are now working from home are doing so either in shared rooms or their bedrooms. And only 65 percent of Americans reported having fast enough internet capacity to support workable video calls. The remaining 35 percent have such poor internet at home – or no internet – that it prevents effective telecommuting.”
Remote workers are forced to use what they have, and with millions of Americans operating with sub-par internet service, it can become a problem for businesses that need certain team members online at specific times.
A Wrench in the Gears
Before we wrap up, there’s one thing that throws a wrench into the works. It’s simple: many companies have contradicting definitions for these terms. Nadia Hlebowitsh at Tecla concurs with our usage, defining distributed teams as hybrids and remote teams as fully remote. Remo disagrees, calling distributed teams fully remote and remote teams a flexible hybrid term. Other people, such as John O’Duinn, add in terms like “teleworker” and “virtual worker” to the mix.
The fact is, the definitions we’ve used above are sometimes used interchangeably, but few people use the term “distributed team” these days. Instead, the distinction is more between fully remote and partially remote teams.
No matter what terminology you decide to use, the benefits and drawbacks are still the same. It doesn’t matter what you call a fully remote team, so long as everyone involved understands that everyone is remote. Indeed, the only thing that matters is that your company has communications channels, procedures, and tools in place to facilitate whatever organizational structure you settle on.
Andrew Greenberg’s roots in recruiting date back to 1996. He has experience both on the agency-side and corporate-side of the staffing business, with a focus in the financial services space at companies like Bloomberg and UBS. He also has core experience with information technology staffing, and has worked for major software companies such as SAP Business Objects and IBM/Informix Software. To get in touch with Andrew, you can reach him by email or by phone at (800) 797-6160.