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Remote vs. distributed: What the differences are and why distributed is the future of work

Distributed work is here to stay. Is your HR team ready?
October 22, 2021
Oyster Team
Remote vs. distributed: What the differences are and why distributed is the future of work

Work in the 21st century has drastically evolved. Previously, it was all about working, building valuable connections, and planning for post-retirement life.

Today, people leaders must tackle inclusion, diversity, work-life balance and now have to decide between running distributed or remote teams. 

If you’ve already hopped on either of the trains, you’ll agree that it can be challenging for those coming from a traditional work environment or addictive for those who caught on early.

And the employees seem to love it. 

According to a recent YouGov poll, 80% of American adults who started working from home during the pandemic are reluctant about going back to the traditional work setting. 

In this post, we’re diving into definitions, benefits, considerations of both forms, and why we think distributed is the future of work. 

Let’s start with remote companies

Remote companies are either fully or partially remote. Sometimes, they also require people to work from one of a set number of locations. (Think: Those Indeed job ads that are tagged remote but require the applicant to live within a specific area or time zone?)

However, a central theme here is that most team members have the main office they work at full-time or part-time. 

Quote that says "In remote companies, most team members work out of the main office on a full- or part-time basis.


For example, a company might have 10 employees who show up to the office every day and another 15 who work remotely from a neighboring state or province. Or, they might be required to commute to the office now and then.  

Simply put, remote in remote companies means some employees work away from the office or other team members. 

Consider remote teams as the older version of the modern workplace where most employees work out of the headquarters (HQ) while a handful of remote employees telecommute every now and then. 

But it did and still has its benefits. 

What are the benefits of having a remote company?

Remote companies have several benefits, such as: 

Cost-effectiveness

Going remote can be financially beneficial to both employer and employee. Employees save money on commuting, lunch, snacks, and others. And employers save on office rent and setup as they can use a smaller space than what they would have to use if everyone worked from the office. 

Better work-life balance

Today’s hyper-busy world means juggling work with everyday life can be challenging for employees. Remote work affords employees better control of their time. This can lead to increased job satisfaction and less stress at work and home. 

Increased productivity

Remote work means fewer office distractions, such as the occasional water-cooler chat, gossip, getting dragged into unimportant meetings, and interruptions from co-workers. Employees are more productive and can focus on their tasks. 

Now, let’s step away from the benefits. Do we feel that companies can do better with their remote team setup? Yes.

How? By taking note of the following considerations.

What considerations should be made with a remote company? 

Graphic that outlines considerations when looking to go remote

Companies need to consider the following if they are looking to go remote. 

Scheduling issues

Managers often design schedules with “headquarters” in mind. This can be challenging for remote team members in different time zones as they bear the burden of staying connected at inconvenient times for meetings. 

Limits on how diverse a remote team can be

Expecting remote employees to commute to the office occasionally puts limits on where the company can hire from. No matter how qualified an applicant might be or how inclusive the company’s hiring policy is, an applicant in a distant time zone (think of someone in Nigeria applying for a role in Canada) will most likely not stand a chance of getting hired. 

Meeting fatigue

In remote setups, everything is a meeting, unlike a traditional work setting where employees can communicate via Slack or physically at the coffee room or photocopy machine. This inevitably leads to Zoom overload, meeting fatigue, and a drop in productivity. 

Risk of misalignment on expectations or goals

It can be tricky for people leaders to get all members of the remote team on the same page, especially if some work onsite and others don’t. Now and then, there may be confusion over expectations or business goals. The time spent clarifying and realigning the team ends up eating into precious work time. 

Remote workers get fewer raises and promotions

People who work from home sometimes suffer from a lack of face time with their colleagues and team leaders. And this negatively impacts the perception of the value they bring to the business and, ultimately, their career. Being in the office allows employees to build connections and show their skills—which helps with career progression. 

Examples of companies with remote teams

While it’s thrilling to watch the recent enthusiasm about remote work, it’s business as usual for some companies. Their employees have always been remote. 

Here are three highly successful remote companies—and you’re likely familiar with them.  

Basecamp

Basecamp is one of the oldest remote companies. While they operate an HQ from Chicago, employees are free to live and work from anywhere. The company is also thriving—its product is used by more than 16 million people worldwide. 

Sticker Mule 

Sticker Mule is a thriving remote company with employees across 17 countries. They run their corporate HQ from New York, with two other office locations across the United States. Sticker Mule boasts of an impressive client list— Google, Netflix, GitHub, and Microsoft. 

Lessonly

Lessonly is another remote company that gets it right. Their focus on making sure remote workers feel welcome, regardless of location, is a significant reason they make remote work

Now, let’s explain more about distributed companies 

People leaders use remote work and distributed work interchangeably. But here’s what sets both concepts apart. 

“Remote” implies that workers are not at the center of the action. The Latin roots of the word “remote” mean “removed” or “far apart.” 

While with a distributed company, the employees work from wherever they are productive and comfortable. Distributed companies are distributed, literally. 

For example, you could be a Product Marketing Manager living in Toronto, managing a Content Strategist based in Kenya, a Graphic Illustrator who lives in Bali, and a Product Specialist working out of Denver. 

The company might operate a hub for certain in-person activities (such as team bonding sessions), but the team doesn’t see this space as an office. 

This approach makes sure distributed teams leave no one out of the loop. It also results in teams that are more collaborative, efficient, diverse, and empathetic. 

Before moving on, it’s worth adding that a distributed company is not:

  • A company with multiple locations

  • A company where employees have official work-from-home days
  • 
A company that hires freelancers, outsourcing firms, or independent contractors


What are the benefits of having a distributed company?

Companies and people leaders switch to a distributed workforce for various reasons, but it’s often a combination of all or some of the following factors:

Improves communication

The very nature of distributed teams means async communication is the norm. With reduced reliance on the pressure of constant real-time communication, responses or messages are high-quality, thoughtful, and productive. This creates a more inclusive and supportive environment for employees, regardless of location or time zone. 

Graphic that says having async communication as the norm in distributed companies creates a more inclusive environment

Improves collaboration and documentation

Async communication also has other benefits. A proper async communications culture means a people leader must make sure documents, goals, playbooks, and processes are easily accessible by every team member. Ease of discoverability skyrockets collaboration levels, and in turn, the productivity of the workforce. 

Employee satisfaction increases

Clear-cut communication channels, processes, and improved collaboration normally equate to one thing—a happy workforce. Plus, the intentional approach to team bonding and socializing that’s a fixture of most distributed teams contributes to the overall satisfaction. 

No sacred cows

Unlike remote teams, members of a distributed workforce all get the same benefits and perks no matter their location. Employees also don’t have to worry about their manager overlooking them for a promotion due to lack of visibility. The focus on strong collaboration and communication makes sure that never happens. 

Improves diversity 

Perhaps the most significant benefit of running distributed teams in today’s world is it allows a company to build a diverse workforce. Geographic boundaries or location don’t matter. Instead, companies are focused on the value the employee brings to the table. This results-based approach creates better working environments. 

What considerations should be made with a distributed company?

Graphic that outlines considerations when looking to switch to a distributed company

Despite all the benefits, there are certain drawbacks people leaders need to watch out for. 

The risk of fragmented communication

Async communication is excellent. But it also means team members share messages, documents, and tasks across various digital tools. If the team leader doesn’t organize these workflows properly, context gets lost as employees transfer conversations from one tool to another. 

Or, even worse, it could get buried under a pile of irrelevant messages. (Ever tried looking for a file in your “general” Slack channel?)

Legal compliance issues

Hiring full-time employees mean you must follow local employment and tax laws. Even if you have only one staff member in a country, any local rules and policies apply to your company. Ignore this, and you run the risk of sanctions by the regulatory body. 

But it doesn’t end there. If you need potential employees to sign intellectual property (IP) agreements, you need to be conversant with local IP laws. 

This is where platforms such as Oyster step in. They can help make sure your employment contracts are compliant, no matter the country. 

Examples of distributed companies

Here are three examples of distributed teams that are shining the light on the way forward for distributed work: 

Automattic

Automattic has always been a distributed team. The team behind WordPress, Tumblr, and WooCommerce have over 1,000 employees across 77 cities. According to Matt Mullenweg, co-founder of Automattic, employees are measured by what they produce and not the number of hours worked. 

GitLab

GitLab is famous for its Remote Manifesto, where they describe how they make distributed work successful for their workforce. Asides from the apparent productivity and employee flexibility benefits, GitLab sees distributed work empowers its employees.   

Doist

Doist is the poster company of distributed teams. Not only is the company run by a distributed team of over 60 people in 25 countries, but they build tools and resources for distributed teams. Their products—Twist and Todoist—are used by millions of individuals across the world. 

Distributed work is here to stay

Distributed work is not a fad. It’s here to stay. 

Benefits such as improved productivity, satisfied employees, diverse teams, and better collaboration are hard to ignore. Improvements in technology also mean boundary-less connectivity and collaboration are much easier than before. 

That said, people leaders need to watch out for compliance minefields such as tax and payroll. But one thing is sure; it’s only a matter of time before distributed work becomes the default work mode for most companies.

Distributed work is the future. Check out this blog post where we look at the top performance challenges of distributed teams and how to overcome them.

About Oyster

Oyster is a distributed HR platform designed to enable visionary HR leaders to find, hire, pay, manage, develop and take care of a thriving distributed workforce. It lets growing companies give valued international team members the experience they deserve, without the usual headaches or the expense.

Oyster enables hiring anywhere in the world—with reliable, compliant payroll as well as great local benefits and perks.

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