Distributed Teams Are on the Rise—Here’s Why

By: Michael Hershfield, Senior Director, Medium Business Segment, WeWork

Distributed teams are becoming more common. Here’s why you’ll soon see more of them, in every industry.

WeWork at Aventine

If you’re not familiar with the idea of “distributed teams” yet, you will be soon.

Distributed teams are composed of employees who work remotely from all around the world rather than being centralized at a single physical headquarters. That means that your head of operations or engineering could be based in New York but her team members live and work in London, Nashville, Detroit, Kansas City, and San Francisco.

Boris Wertz, a venture investor in my hometown of Vancouver, discussed the concept of distributed teams in a recent blog post. He argues that due to today’s competitive labor market, it’s time for companies to buck the traditional wisdom of not building teams in other markets until you have at least 100 employees.

At WeWork, I’ve seen the rise of geographically distributed teams, especially among customers that have between 11 and 999 employees. I predict that we’ll see many more companies adopt the distributed-workforce structure in 2019. Here’s why:

It’s never been easier to work remotely.

Today, technology connects us instantly. Video conferencing allows us to chat practically face-to-face, and group messaging tools put us in constant contact, whether our teams are in the same city or different time zones.

Technology allows distributed teams to stay in constant contact.

It’s harder than ever to attract and retain talent.

I recently hosted an event at the Inc. 5000 conference celebrating America’s fastest-growing companies—and nearly every leader I spoke to said that their biggest challenge is attracting and retaining talent.

Even the most successful, high-growth companies must compete against major corporations like Amazon and Google, who offer big name recognition, perks, and high salaries. And because medium-size businesses operate on a much leaner scale, their employees need to be nimble, scrappy, and able to work closely with peers in every part of the company. Finding—and keeping—the right people can feel like an impossible task.

That’s where distributed teams have a distinct advantage—they offer companies the ability to meet talent where they are. In some cases, a company finds that a potential employee they’re courting is eager to take the job but unwilling to relocate. Other times, a talented employee needs to move to a different city but wants to remain at the company. In either scenario, the company has two choices: accept a remote employee or lose valuable talent.

Companies must be agile to survive.

With the speed of business moving quicker than ever, companies need to respond to opportunities fast, whether investing in specific initiatives or filling key positions. At WeWork, we found that medium- and large-size businesses vary their month-to-month desk counts by the most of any size segment, indicating how much flexibility they require.

The workplace is becoming more employee-centric.

More people than ever want—and expect—flexible work arrangements. Seventy-six percent of millennials would take a pay cut for more flexibility. And it’s not just that generation: 96 percent of the workforce needs some form of flexibility, but just 47 percent have access to it.

It’s no wonder; the average person will spend 90,000 hours at work over the course of their lifetime. At the same time, we’re human beings with spouses, children, parents, friends, and passions to which we want to devote our time. An hour or two of extra flexibility each day could be the difference between sitting down to dinner with our kids and spending that time commuting.

All these factors have created the ideal environment for distributed teams. A distributed workforce can help you hire top talent (regardless of location) and retain them through flexible work arrangements. Technology enables your employees to collaborate effectively—and form lasting friendships. In addition, you can save money on real estate costs because, in some cases. you won’t need to sign a long-term lease on a company headquarters.

Most employees today want—and need—flexibility.

One WeWork member with a distributed-teams structure is TripActions, a fast-growing corporate travel-management company. TripActions has more than 400 employees in seven offices in the U.S., Europe, and Australia. They strategically hired employees in locations where their customers are, and where there’s big market potential for growth.

“As a customer-first company, we want to be physically present to provide high-touch customer support,” says Nina Giovannelli, VP of business operations, TripActions. “Having physical offices around the world allows our teams to be on the ground and close to our customers so that we can understand their needs and the ever-changing travel industry landscape.”

It’s only a matter of time before companies like TripActions will be the norm across every industry.

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