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The Pros & Cons of Managing a Remote Company

As the COVID19 pandemic continues to disrupt businesses worldwide, executives in companies of all sizes are re-imagining where and how work will get done.

Many business owners have been forced into working remotely almost overnight, while others are actively deciding whether a remote work arrangement is the right choice for their company.

With such significant changes playing out before our eyes, and consequential decisions still to be made, there’s now an acute need to understand the real benefits and challenges that come with managing a remote company.

What is a remote company?

First and foremost, it’s essential to understand that remote companies aren’t all the same. On the one side of the spectrum are fully remote or distributed companies. These have no HQ or shared spaces-everyone works in a unique location and or multiple locations.

This differs slightly from what is known as remote-first companies. These usually have a physical workplace, but most employees work outside of this main workspace most of the time. In other words, in remote-first companies, working remotely is the default mode, but there is still an option to work in an office.

Finally, on the other side of the remote work spectrum are remote-friendly companies. These types of organizations typically enable some employees to work outside of the office some of the time.

However, unlike remote-first companies, employees at remote-friendly companies still conduct most of their work and daily operations in person.

The pros of managing a remote company

#1 — Cost Savings

Perhaps the most obvious advantage of managing a remote company is a reduction in business expenses. Companies that don’t have high overhead costs like office space and supplies can save tens-of-thousands of dollars every year. There are also savings to be had on employee travel and travel costs. This is all money that can be invested in growth and development or into whatever you feel is most valuable.

In addition, there are less apparent savings that arise. These come in the form of improvements in productivity and reduced attrition stemming from greater employee satisfaction, ultimately decreasing the costs associated with recruiting, hiring, and training new employees.

#2 — Productivity

As the COVID-19 pandemic accelerates remote work, some interesting data on productivity is starting to flow in, and it appears to be good news for remote companies.

According to a Boston Consulting Group study, 75% of remote employees report maintaining or improving productivity on their individual tasks, with 51% saying the same about collaborative tasks.

Another major study of 4700 knowledge workers found that remote work had a net positive effect on productivity, even after taking various home situations into consideration, such as the presence of another parent, the age and number of children, and other caregiving demands.

Sun Microsystems’ found that employees spent 60% of the commuting time they save performing work for the company. Remote American Express workers produced 43% more than their office-based counterparts.

#3 — Expanded talent pool

One of the most significant advantages of running a remote company is that hiring is no longer limited to the specific geographic location within commuting distance of an office.

Remote companies can tap into a global talent pool to seek out the best person based on their qualifications and suitability for a role. This means local talent shortages are no longer an impediment when trying to grow.

#4 — Attracting & retaining talent

An increasing number of skilled workers see remote companies as more attractive places to work. According to a FlexJobs survey, 65% of respondents wanted to work remote full-time post-pandemic, with 31% wanting a hybrid remote work environment. When added up, this amounts to 96% who desire some form of remote work.

Another study of 4,700 knowledge workers reported similar results, with the majority of those surveyed stating that they never want to go back to the old way of working. Overall, just 12% of those surveyed reported that they want to return to full-time office work, with 72% keen on a hybrid remote-office model in the future.

The graph above indicates that remote working positively impacts the work-life balance (+26) of those surveyed. It also leads to greater satisfaction with the working arrangement (+20) and reduces work-related stress and anxiety (+17).

#5 — Business flexibility

Unlike companies with offices, remote companies can grow or scale back without worrying about office space and equipment constraints.

There is no need to continuously add office space and buy new equipment to keep up with hiring. This flexibility enables remote companies to scale rapidly and at significantly lower costs.

Alternatively, if the need to scale back operations arises, remote companies aren’t stuck paying rent for unused office space or left with expensive equipment to sell or store. In turbulent economic times, like we’re experiencing now, this can give companies much-needed respite.

The cons of running a remote company

#1 — Trust

Research shows a significant number of managers often struggle to trust that their employees are working when they cannot see and monitor them. Unfortunately, these trust issues spill over to employees, as managers with a lack of trust often place unreasonable expectations on workers to be available at all times, causing added job stress.

Managers and leaders of remote companies need to contend with the reality that there is less control over how employees genuinely spend their time.

#2 — Productivity

While many workers report a boost in productivity, the remote experience has not positively impacted everyone. Working from home with kids and other distractions and a lack of a designated workspace at home can make it more difficult for employees to get deep work done.

Studies have shown that some remote workers report working too few hours, or conversely, putting in an unhealthy amount of overtime, leading to low quality work output and burnout.

Interestingly, according to a study of over 1,000 remote employees by Twingate, 45% reported attending more meetings than when working in the office, compared to 21% who attended fewer meetings. Furthermore, 40% of employees reported experiencing mental exhaustion from video calls while working remotely.

#3 — Leadership & management

Remote management requires different skills than face-to-face management. But COVID19 has forced many businesses to transition to remote work almost overnight, which has meant little to no time for training.

A Harvard study of 1200 managers in 24 different countries suggests a substantial number have low confidence in their capability to lead remotely and effectively influence and co-ordinate remote workers. When going remote, management training may be required, and there will undoubtedly be an adjustment period.

#4 — Communication & collaboration

One of the biggest challenges of managing a remote company is that team communication and collaboration can’t be carried out as often as in an office. Communications must be done using different tools, through video conferencing, instant messaging, and communication platforms like Slack.

Electronically communicating and collaborating is different than when done face-face. Additionally, there are also challenges with internet connectivity and different time zones. When working hours differ significantly, communicating and collaborating can be a real challenge, especially in real-time.

#5 — Team building, human connection, & culture

Building a tight-knit team where individuals feel a sense of belonging is not easy when scattered worldwide. With a lack of face-to-face interactions, team building, socializing, and creating a unified company culture is more challenging.

Slack’s comprehensive study on remote work (shown above) found that middle management employees and individual contributors’ sense of belonging is impacted negatively by remote work.

In contrast, both tenured employees and senior managers’ have higher satisfaction levels, which may owe to existing relationships. Without these relationships, middle management and new employees may be more likely to feel loneliness or isolation.

Intrepid Market; a community to list, buy, and sell on-demand technology and creative services for remote companies. In the spirit of the on-demand economy, we want to bring transparency and fluidity to the market.

Our marketplace successfully connects remote companies with qualified professionals and agencies that are equipped to execute on any given project.

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Originally published at on February 9, 2021.




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Anthony Back

Anthony Back

Interested in fintech, crypto, ecommerce, cybersecurity and the future of work.

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