The Rise of the Distributed Team

Now your office is where you make it

The term “distributed team” is incredibly popular today. While many think of it as a nice way of talking about remote workers, outsourcing, or freelancers the reality is that it encompasses all of the above but includes a ton more.

A distributed team means simply that. It means that you and the people you work for and/or with aren’t located in the same spot. You could be in different buildings, different area codes, or technically even different companies if you are working on a project together.

It doesn’t matter if the team is comprised of full-time employees, part-time employees, or freelancers. What creates a distributed team is the fact that you are working and collaborating with individuals in different physical locations.

This generally means that you and your team members collaborate through technology — e-mail, virtual meetings, project management tools, communication platforms, and other software. While you need effective communication, collaboration, and engagement for a distributed team to be successful, the reality is that efficient teams are already using these platforms effectively and operating in a lean digital fashion.

With companies already adapting technology in order to connect and grow teams, it’s only natural the role the remote worker plays in the modern economy continues to grow. Let’s take a brief look at the rise of the remote worker.

The Rise of the Remote Worker

One major factor for the increase in distributed teams is the fact that remote work is becoming incredibly common. A 2016 study by Deloitte found that that 30% of full-time employees primarily work remotely, nearly a third of the entire workforce.

Another major trend is that even colocated teams become distributed teams at least part of the time. Gallup’s State of the American Workplace reported that around 43% of Americans said they spent at least some time working remotely.

Another study found that working remotely has grown by 140% since 2005 and is continuing to grow nearly 10x faster than the rest of the workforce, which includes those who are self-employed. This rate will only increase as a survey of 1,000 hiring managers found that they believe up to 38% of their full-time workers will be working remotely in the next decade.

What is contributing to the rise in remote work?

There are a number of reasons why remote work is increasing. As I covered in my article last week, there are benefits and efficiencies created by enabling remote work and distributed teams. Often times communication and collaboration increases, employee engagement is further encouraged, performance is better, and employee morale is stronger.

For the remainder of this article let’s take a look at some of the trends leading to more remote work.

Employees with flexibility are happy employees

Companies Are Being More Flexible With Full-time Employees

For the reasons mentioned above companies are being more flexible with where and how their employees work. Forty percent more U.S. employers offer flexible workplace options than they did five years ago.

And the benefits are tangible. According to a 2009 survey by Cisco of thousands of employees, 69 percent said their productivity was higher when they worked remotely and 83 percent said their communication with other team members was either unaffected or enhanced by being dispersed.

AND The Workforce Is Demanding More Flexibility

The rise of the millennial workforce has contributed greatly to the shifting dynamics of the workplace. As my colleague Mihir wrote, approximately 35% of the workforce is comprised of Millennials, and it is widely accepted that by 2025, 75% of the workforce will be comprised of workers with similar mindsets. Check out his article for some great insights into how this generation is changing the physical workspace. Millennials bring an added focus on collaboration while also having a strong sense of independence. It is only natural this generation is contributing to the rise of workplace flexibility.

The Adoption of Startup Culture

As larger companies continue to emulate the environments of their leaner and more efficient startup competitors, the workplace flexibility within these companies is rising as well. One example is highlighted by looking at how WeWork’s client base is changing.

The Economist writes “A few years ago, WeWork’s business was comprised almost entirely of small fry. In the year to September, the enterprise segment (firms with over 1,000 staff) grew by around 370%. As of June, big firms accounted for about a quarter of its membership and revenues. More than 1,000 companies now take anything from one to 12,000 desks. In June, Facebook asked WeWork for an entire building for several thousand workers.” It isn’t uncommon for a company to have multiple WeWork locations across the country, both enabling remote work but also providing a space for colleagues to meet up in person when the need presents itself.

Competition for Talent

As companies in every industry become technology companies in many ways, the competition for talent is increasing. Startups and large companies are competing for the same talent, so corporates are adapting to attract talent. This has basically forced a more flexible standard for what working conditions will be, and while not all companies can’t compete in terms of dollars they can always compete in flexibility, company culture, and perks.

One additional benefit to hiring remote workers is it allows your company to expand beyond its geolocation in order to hire the best talent available. A great example is Buffer, which has 80+ employees and no physical office. Their entire team is remote and spread across the globe. I’d recommend checking out this article, 40 Lessons From 4 Years of Remote Work, to get some insight into what their company culture and experience is like.

Economies are growing where they previously couldn’t

The Growth of the Gig and Freelance Economy

This topic could easily be its own research report and something that I will probably write as its own post in the near future. To keep it brief, take a look at these staggering freelance and gig economy statistics.

  1. In 2016, 53 million Americans were freelancers which is equal to about 34% of the entire workforce.
  2. This number is only increasing as McKinsey & Company estimates almost 50% of the workforce will be freelancers by 2020.
  3. Between 2003 and 2013 all industry sectors experienced growth in non-employer businesses.
  4. 24% of Americans report that they earn income from the digital ‘platform economy’ in the past year.
  5. Nearly one-in-ten Americans have earned money in the past year using digital platforms to take on ad-hoc jobs and tasks.
  6. Freelancers and the gig workforce are adding $715 billion annually to the economy through their work.
  7. Among traditional workers, 80% would be willing to do additional work outside of their primary job if it was available and enabled them to make more money.
  8. More than one-third of Millennials are independent workers

The freelance economy is already massive and clearly something that will continue to grow. More freelancers mean more remote workers and more distributed teams.

Mobile Workers

A 2016 study by Deloitte found that 37% of the global workforce is now mobile. Another study finds that the global mobile workforce is set to increase to 1.87 billion people or 42.5% of the global workforce by 2022. New technology has opened up markets where companies were never able to hire before for the fact that people didn’t have access to the tools they needed to work. Platforms like Upwork have made connecting to these markets easier, and the proliferation of mobile devices and the sophistication of mobile applications have made it possible for more and more people to contribute to the global economy.

Cost Efficiency & Awareness

Not only are remote workers often found to be more productive and efficient, but they also create cost efficiencies. Companies utilizing remote workers and distributed teams have reported significant decreases in operating costs. This article presents two examples from large corporates — “Aetna (where some 14,500 of 35,000 employees don’t have an “in-office” desk) shed 2.7 million square feet of office space, saving $78 million. American Express reported annual savings of $10 million to $15 million thanks to its remote work options.”

Another large factor in these cost efficiencies is government incentives. For example, Canada has a number of programs that reimburse international companies for hiring local engineering talent, grants that match funding, and implement forward-thinking immigration policies for executives traveling to Canada for work. US cities often incentivize companies to either relocate or open new subsidiary offices through tax subsidies. Just take a look at this list of 8 US cities that will pay you to open up shop there.

And last but not least…

Older Employees are adapting

According to a survey by the Pew Research Center, Americans over the age of 64 are working more than any other time period since the turn of the century. A survey by the AARP found that 74% of older Americans would want work flexibility and 34% would like to work from home. This is the case for a number of reasons. Increasing life expectancies, inadequate retirement savings, and other unfortunate circumstances have definitely played a part. communities. Others are simply able to stay in the workforce longer because technology is enabling a more flexible work week and the ability to work remotely.

Distributed teams are here to stay, and are only going to increase over time has the physical workspace shifts to a digital workspace. Technology is enabling new channels for communication and collaboration. New markets are being opened in the global economy. the younger generation is encouraging the growth in flexibility, and the older generations are taking advantage. The rise of the remote worker and distributed teams is not one f absolute perfection; over the next week we’ll examine the benefits, challenges, and consequences of an increasingly distributed workforce.

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