What is a distributed workforce?

Managing teams across multiple locations has become the new normal for many businesses, with research showing that nine out of ten organizations now plan to combine remote and on-site work.

But what exactly is a distributed workforce, and how does it differ from other flexible work arrangements? Whether you're exploring this model for the first time or looking to optimize your existing distributed team, understanding the fundamentals is crucial. This guide covers everything from the basic definition to practical management strategies, plus real examples of companies thriving with distributed teams.

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What is a distributed workforce?

So, what exactly is a distributed workforce? Simply put, it's employees and contractors working for the same company from different locations—no central office required. This setup typically includes:

• on-site teams at one or more office locations

• remote employees who work from home, coworking spaces, or are traveling

• digital nomads

What is a distributed employee?

A distributed employee is anyone who works as part of a team but isn't tied to a central office. They can work from:

• Home offices: Their personal workspace

• Coworking spaces: Shared professional environments

• International locations: Different countries entirely

The key difference? Unlike traditional remote workers who are exceptions in office-based companies, distributed employees are part of an intentionally decentralized structure.

What's the difference between a "distributed" and "remote" workforce?

Here's where it gets confusing—"distributed" and "remote" aren't the same thing, though they're often used interchangeably. The key differences:

• Remote work: Individual employees working away from a central office

• Distributed workforce: An entire company structure built without a central headquarters

• Organizational design: Distributed companies are intentionally decentralized from the ground up

Think of remote as a work style, while distributed describes how the entire organization operates (see distributed work).

Examples of distributed workforces

Real companies are thriving with distributed models:

• Oyster: No central office, with employees working across multiple continents

• GitLab: Over 1,300 team members in 65+ countries

• Zapier: Fully distributed since 2011, spanning multiple time zones

These companies prove that distributed workforces aren't just possible—they can be incredibly successful.

Benefits of a distributed workforce

Why are more companies going distributed? The benefits are compelling:

• Wider talent access: Companies can hire the best person globally, not just locally, and many have adapted their processes by moving recruiting events online, though research suggests only about one-third have fully reimagined hiring from the ground up for a remote-first world.

• Increased diversity: Natural diversity leads to more innovative solutions

• Lower overhead costs: Companies can save on expensive office leases and utilities, as research shows a decrease in growth in unit office building costs is associated with an increase in remote workers.

• Better retention: Employees value flexibility and work-life balance

• 24/7 productivity: With teams working across time zones effectively, companies can see a positive impact on the bottom line, as an increase in remote work is associated with an increase in TFP growth.

How to manage a distributed workforce

Managing distributed teams requires a different playbook. Here are the essentials:

• Focus on results: Instead of tracking hours, measure outcomes. This is especially relevant as data shows the average weekly hours teleworkers spend working from home are decreasing, shifting the focus to productivity and results.

• Invest in communication: Use video calls, messaging, and project management tools

• Build trust intentionally: Regular check-ins and transparent processes

• Maintain culture virtually: Online team events and social interactions

• Ensure fair compensation: Compliant, equitable pay and benefits globally

Building your distributed workforce globally

A distributed workforce is more than a trend—it's a strategic approach to building a resilient, global team. By embracing this model, you can unlock new talent markets and create a more inclusive work environment.

If you're ready to hire the best talent no matter where they live, Oyster makes it simple. Start hiring globally with a platform that handles compliance, payroll, and benefits, so you can focus on building your team.

FAQs

What is another word for distributed workforce?

Common alternatives include "globally-dispersed teams," "location-independent workforce," or "decentralized organization."

What does distributed working mean?

Distributed working means being part of a company intentionally designed to operate without a central office, giving employees location flexibility.

How is distributed work different from hybrid work?

Distributed companies have no central office, while hybrid models still require employees to work from a physical office on certain days.

Disclaimer: This article and all information in it is provided for general informational purposes only. It does not, and is not intended to, constitute legal or tax advice. You should consult with a qualified legal or tax professional for advice regarding any legal or tax matter and prior to acting (or refraining from acting) on the basis of any information provided on this website.