While many large employers continue to shun work-from-home arrangements, startups are taking advantage of remote work to gain greater access to talent.
Less than half of America’s workforce telecommutes, according to a Gallup survey. While 43% of employees work remotely at least part of the time, only 22% work remotely full-time. Some larger companies have even scaled back work-from-home arrangements—including IBM, which required thousands of remote employees to return to a corporate office in 2017.
But startups may be more inclined to hire remote workers to gain access to skilled employees who otherwise wouldn’t consider an unestablished company.
Remote working has enabled Plex, a video streaming and aggregation service with about 95 employees, to source talent internationally, according to chief product officer and co-founder Scott Olechowski. More than 90% of Plex’s workforce is remote, with employees in over 20 countries and all over the U.S.
“We were actually able to get this amazing talent and amazing passion and do it for less,” he said, because remote working also reduced the need for office space.
Pinpoint Predictive, on the other hand, has almost all their employees working at their headquarters in the Bay Area.
“I believe that having the clearest and most direct face-to-face communication is especially important in our field,” Avi Tuschman, founder and CEO of Pinpoint Predictive, said in an email. “Pioneering a new area of data analytics demands complex R&D efforts, close collaborations between teams and the deliberate use of clear terms and specifications.”
Andrew Scheuermann,the CEO and cofounder of Arch, which digitizes machines for manufacturers, said his company’s flexible work-from-home policy has pushed the company to “manage by goals as opposed to managing by time.”
When his employees are working in the office, Scheuermann said, there’s a temptation to judge their productivity according to how many hours they’re putting in. When employees are working from home, it’s easier to focus on how well they’re meeting their goals.
Some other reasons companies hire remote employees:
Retention. According to a study by Nicholas Bloom, a professor of economics at the Stanford Graduate School of Business, remote workers are less likely to quit than people in the office. This may be linked to the flexibility remote work offers. Millennials, especially those with children, value the ability to work from home, with 64% of millennials working at jobs with “flexible locations.”
Productivity. Bloom’s study also showed a 13% increase in performance, because remote workers tend to work longer hours. In response to these findings, Ctrip, a Chinese travel agency where the experiment was conducted, decided to provide an option to work from home to their employees.
Lower costs. Hiring remote workers limits the overhead costs such as office space.
Workforce Diversity.Employers say hiring remote workers brings new perspectives to their companies. “Getting folks from all walks of life together to work on something is fun,” Plex’s Olechowski said.
Some reasons companies don’t hire remote employees:
Helping employees stay motivated. Some companies worry that their workers would be easily distracted at home without in-person oversight.
Manageability.Managing large teams remotely may be more difficult than managing a few employees remotely. Olechowski said managing all the different time zones his employees live in can be difficult, but Slack and flexible schedules can mitigate that problem.
Innovation. Pixar’s founder, Ed Catmull, wrote a book called “Creativity Inc.” that discussed many different elements of Pixar’s company culture. While Catmull does not come out against remote work and mentions some examples of people working from home, he also highlights the valuable “Braintrust” meetings the company has to assess the movies they make. He says these meetings are their “primary delivery system for straight talk.” While there are ways to hold these kinds of meetings for remote teams either through video calls or periodic gatherings, some companies prefer constant in-person communication to inspire innovation.
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