What Are Distributed Teams? Benefits, Challenges, and Best Practices
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Hiring brilliant individuals and building high-performing teams has always required thinking outside the box. And in the era of remote work, that includes hiring outside state and national borders.
Global, distributed teams unlock an unprecedented level of flexibility and diversity for their organizations. Companies like Automattic, Zapier, and GitHub prefer distributed teams because it lets them hire the best (not just the closest) talent, gain multicultural perspectives, and keep their business up and running 24/7 with team members spread across time zones.
The shift from centralized to distributed teams isn’t effortless, but its pros outweigh its cons – especially as remote work becomes more commonplace and international hiring becomes more straightforward.
What are distributed teams?
A distributed team is a group of people working together from various locations. Members of a distributed team can work from home, a coworking space, or their local coffee shop. They can also reside in the same country or around the world.
Remote work was already becoming more popular in the 21st century, thanks to the increase in internet-enabled work. According to Owl Labs, in2018, 16% of companies operated with distributed teams. Of course, the pandemic accelerated the shift to remote work: 70% of full-time workers worked from home during the pandemic, and 77% of them wish to continue doing so even when it’s no longer necessary.
What are fully distributed teams?
Fully distributed teams have no official headquarters or office spaces. They operate on a remote-first model, meaning they support employees who reside on all corners of the globe.
Fully distributed companies are gaining traction because they offer culture, benefits, and compensation comparable to in-person work without a daily commute or the high cost of office space. Plus, distributed companies can employ individuals worldwide–not just employees centralized in a handful of high-cost-of-living locations.
Distributed teams vs. remote-friendly teams: what's the difference?
Employees can choose whether to work onsite or offsite in a remote-friendly company. Although a remote team resembles a distributed team because its members can work from various locations, remote employees have a central or local office they can work from (full-time or part-time).
Distributed teams, on the other hand, rarely have headquarters, and the nature of their offices is entirely virtual. Also, unlike remote teams with employees working from home but in the same city, a distributed team has its members spread all across the globe, in different countries, and even different time zones.
Distributed teams vs. hybrid teams: what's the difference?
Once we entered the post-pandemic era, many companies returned to their offices for a few days out of the week (and work remotely the rest of the time).
Hybrid work allows companies to organize their workforce according to their business needs. Some businesses elect to have specific teams come into the office on certain days of the week. Others ask all employees to come in once a week and work wherever they want the other days. The combinations are endless.
The crucial difference between hybrid and distributed teams is that distributed teams don’t have a dedicated office space and include team members from different cities, states, or even countries.
How do you set up a distributed team for success?
Distributed teams thrive on transparent processes and robust tech stacks. Since employees don’t spend their days in the same office, they need tools and processes enabling a seamless workflow and communication. Fortunately, most work tools have updates to support distributed teams.
Consider offering a work from home stipend
A work-from-home stipend is a one-time or monthly allowance employees use to purchase the equipment they need to be productive and comfortable while working from home. The necessary equipment depends on each person’s role, but common expenses include:
- a laptop or desktop computer
- headphones (with a microphone for virtual meetings)
- a quality camera
- a stable internet connection
Invest in a robust tech stack
Aside from high-quality hardware, companies need the right software to meet internal and external communication needs and efficient project management. Your exact needs will vary, but most companies need some combination of:
- Project management tools: These tools help teams assign accountability, break projects down into manageable tasks, and keep deadlines in view. At Deel, we use a combination of Notion and Jira.
- Document creation and management: These tools help you create and organize documents, spreadsheets, and slide decks. The go-to tools are Google Suite and Microsoft 365.
- File sharing and storage: Dropbox is a widely used program suitable for storing, backing up, and sharing files. Zoho, Sync, and Cloud are also great options.
- Team communication and collaboration: Real-time messaging tools such as Slack enable collaboration from around the globe. Slack is quick and customizable, and offers plenty of integrations you won’t find in email.
- Video conferencing platforms: Video calls facilitate face-to-face interactions (although you should use them sparingly, so distributed teams have time and energy to get work done). We use Zoom or Google Meet for our video meetings.
- A cloud-based phone system: Before, companies had landlines used for internal and external communication. Although they still exist, most businesses today can use a cloud-based phone system that transmits data and your voice over the internet. That data is then hosted in the cloud, allowing users to access it and share it using computers, laptops, tablets, smartphones, and even office landlines. It is convenient for distributed teams because it allows their members to work anywhere.
- Cybersecurity tools: Remote works unlocks additional security concerns since files pass between personal devices worldwide via the cloud. Password management tools like 1Password and data security tools will help lock down your sensitive information.
- Additional tools: Each team will need tools specific to their line of work, so this list is just the beginning.
What are the advantages of distributed teams?
Distributed teams enjoy more flexibility and diversity than their location-restricted counterparts. Let’s dive into the benefits:
Freedom from the typical 9-5
Before remote work, employees had to be productive under rigid schedules and overbearing supervision. They also had to waste energy on commutes and force the rest of their life–like their families and physical wellness–to fall second to their work schedule.
Employees working in distributed teams can work wherever they want and still deliver excellent results. Although remote work initially awakened many concerns, with companies worrying about employee performance outside the office, a Stanford study on WFH productivity indicates a slight increase in performance thanks to the flexibility of remote work.
A responsible and dedicated employee is the same with or without supervision. Most employees have been more productive once the remote work model entered our lives when the pandemic hit.
Better coverage across time-zones and languages
Distributed companies have around-the-clock and multilingual coverage, which greatly benefits sales and customer support teams. The benefits of multilingual hiring include content translation and servicing customers who don’t speak your company’s primary language.
Distributed work allows employees to prioritize their work over commuting and spend on-the-clock hours getting it done. They also feel more liberated to take breaks whenever they need and design their schedule however works for them, which boosts productivity.
Access to the most talented individuals regardless of borders
Chances are, the most qualified person for an open role doesn’t live within a few miles of your company’s office. And chances are even slimmer that’s the case for every single position at your company.
The distributed work model opens the door for talented individuals from across the globe to join your team.
Cost savings on real estate
A distributed team saves costs because the company doesn’t have to invest in office real estate and furnishing.
According to Zippia's research, the average North American employee needs between 150 and 175 square feet of office space. For a growing team, that’s a significant amount of space.
And if you want to draw from the deepest pool of talent, you’ll have to rent that space in cities with a high cost of real estate. CommercialEdge's National Office Report from April 2021 shows Manhattan office space was the priciest in the nation, with an average listing rate of $85.82 per square foot, per year. That’s $12,750-14,875 per employee, per year–on top of their salary, benefits, and other expenses.
Speaking of other expenses, in-office companies must also cover utility and maintenance costs and purchase equipment, furniture, and office supplies.
United Stationers released a study that shows offices with 1-4 employees spend over $1,800 per employee for office supplies, furniture, tech equipment, janitorial, and break-room products.
Companies worldwide prioritize diversity nowadays because diverse perspectives and experiences lead to better performance and business results. Also, of course, hiring a diverse workforce is the right thing to do: it’s a necessary step to reverse long-standing advantages that certain groups have over others. And hiring team members from around the world is an unbeatable step toward achieving diversity in the workforce.
What are the challenges of running a distributed team?
Of course, assembling and running a distributed team isn’t effortless. Some of the major advantages of distributed teams include:
Working across time zones
Some teams may struggle with working effectively across time zones, especially if you’re transitioning from an in-office setting, where everyone is available and working simultaneously.
The key is to shift to asynchronous communication, which de-prioritizes (often unfocused and unproductive) live communication for non-live communication. Asynchronous communication also gives people the time to communicate more clearly and thoroughly clearer and more thoroughly.
Check out our post on how to communicate with a remote team effectively to learn more.
The absence of in-person interaction
The lack of in-person interaction is a challenge for distributed teams because, sometimes, it is hard to determine whether you agree with someone without face-to-face communication.
However, audio and video conferencing platforms can fill those gaps. Aside from allowing team members to share ideas, doubts, and feedback, these tools can help create the bond between employees by organizing virtual team building and informal chats.
Keeping track of tasks
The absence of in-person communication could also harm efficiency. It’s easier for direct reports to spend time on low-priority tasks or even waste entire days because they can’t walk to their manager’s desk and double-check what they should do.
However, just like in-person teams, you can achieve productivity through clear communication, accountability, and expectations. Task management solutions such as Trello ensure everyone is up to date with projects and deadlines and working on the most critical tasks.
How to run your distributed team
1. Set clear availability expectations
When team members work in different time zones, it's hard to determine whether someone is available. Sure, they may appear “online,” but they might be using their computer and not available to answer questions. And even during their working hours, they may be taking a break.
Use tools like Google calendars to set working hours and, as much as possible, encourage your team to respect those hours.
2. Provide robust onboarding for new hires
The first day at a new job is a less stressful experience. New hires on distributed might feel particularly overwhelmed because they need to virtually familiarize themselves with the team, tools, and processes.
That's why your job as a manager is to ensure the onboarding goes as smoothly as possible.
Start by organizing a welcome meeting, allowing new employees to introduce themselves and meet coworkers. Also, assign them an onboarding buddy to introduce them to the position and team culture, and answer their questions.
Learn more about how to onboard remote employees.
3. Be result-oriented
People opt to join a distributed team because it allows them to work whenever they feel most productive. Of course, they will probably take more breaks or log odd hours, but that's what working in a distributed team is all about.
So, stop worrying whether your remote workers work within a particular time frame. Instead, focus on results. Maybe their working habits appear odd or imperfect to you, but getting the job done is all that matters.
4. Show appreciation
We all work to make money, but paychecks are not the only thing that motivates people. Positive feedback and public praise go a long way, especially in distributed teams with fewer casual, positive interactions.
Avoid the trap of only sharing negative feedback. Make a point to recognize when your team performs well or has a strong idea. Likewise, share public praise on Slack or wherever your virtual team works if your employees are comfortable with it.
5. Create opportunities for team bonding
Distributed teams don't have the chance to grab a beer or eat lunch together. At least in person. But don’t let this stop you: online gatherings are an excellent option for teams hungry to get to know one another and bond in an informal setting.
A distributed team can organize surprise birthday parties or after-work happy hours (but be careful not to infringe on your employee’s time too much). Online tools like TeamBuilding offer tons of online team-building events your distributed team may enjoy.
Can distributed teams use an agile framework?
Companies with software development teams have a unique concern: how do agile development teams approach distributed work? In 2018, over 90% of software developers from all around the globe based their work on Agile principles and values.
Just like regular teams, agile teams can make remote work with the right tools and processes. Atlassian has a detailed article on remote work for agile teams, and their toolkit facilitates the kind of remote communication and collaboration necessary.
Build your distributed team with Deel's international hiring tool
The prerequisite for a successful distributed team is a proper hiring process.
Building an international team can be time-consuming, especially when compliance is involved. There are different local labor laws, taxes, and mandatory employee benefits for each country to keep up with. Luckily, Deel handles all of that for you.
Deel lets you hire anyone, anywhere in the world, within minutes. Plus, you can rest assured legal experts vet your contracts to be completely compliant, so your new hires are set up to work correctly in no time.
Want to learn how it all works? Book a demo today to find out.