A distributed workforce refers to a company’s employees who work remotely from various locations around the globe.
A distributed workforce, or dispersed workforce, is not restricted to one physical office space and may include employees working on-site, from home, or in coworking spaces.
A distributed workforce doesn’t require a business to have one centralized location and allows employees to work together from anywhere worldwide through web-based communication and collaboration tools.
A distributed workforce model provides employees the flexibility to work where and when they want and enables employers to engage a broader talent pool with diverse skills, cultures, and perspectives.
Distributed workforce vs. remote workforce
While the terms distributed workforce and remote workforce are often used interchangeably, there are a few key differences between them:
Distributed work
Distributed work involves a team that does not have one centrally located office. Employees typically live and work in various locations and time zones from home, local branch offices, or flexible workspaces. Team members typically work asynchronously and collaborate through web-based tools like Zoom, Slack, and Asana.
Remote work
While distributed work often involves remote work, a remote workforce typically refers to employees who work in the same location or time zone but can work from home rather than from a centralized office. Employees may go into the office to meet with teams or clients but can also work remotely as needed.
Companies that allow remote work also often use asynchronous, web-based tools for seamless communication and collaboration among their remote employees.
Benefits of a distributed workforce for businesses
A distributed workforce presents several opportunities for businesses to attract diverse and highly skilled talent, tap into new markets, and allow for more flexibility in the workplace.
The key benefits a distributed workforce provides employers include the following:
Reduced costs
Businesses with a distributed workforce eliminate the need for physical office space and can save on property costs. Employers with distributed employees can also save on other overhead expenses, such as utilities, office furniture, and office supplies.
Companies offering employees the flexibility to work from anywhere may also have lower turnover rates, leading to further savings on recruitment, international onboarding, and training.
Seamless scaling
When employers have a distributed workforce policy in place, they’re not limited to local borders when engaging new talent and growing their team. As a result, they can scale their workforce across multiple locations while reducing associated costs and delays related to establishing physical office spaces.
Higher productivity
Distributed employees are often more productive because they have the flexibility to work during the hours that work best for them and can better manage their time.
According to a Standford study, 77% of those surveyed working remotely at least a few times each month showed increased productivity. Companies can also operate longer hours with employees working during different peak periods worldwide.
Larger talent pool
A distributed workforce allows businesses to tap into a larger pool of diverse, highly skilled employees worldwide. An employer can search for the most qualified candidates for the job without being limited to one location. Employees bring more skill sets, backgrounds, and perspectives that can lead to more growth opportunities.
Challenges of a distributed workforce for businesses
Although there are many benefits to a distributed workforce, having employees located in multiple locations also poses several challenges for businesses.
Management difficulties
A key challenge of a distributed workforce is managing employees spread across multiple locations. Building and maintaining strong working relationships with employees in different physical locations or time zones is difficult. Distributed teams may encounter communication challenges, less collaboration, and decreased productivity if management is poor.
Read also: How to Build and Manage an International Workforce
Poor engagement
The distributed workforce model can also make it difficult to keep employees engaged. Employees who work remotely or in different locations than their team members may feel isolated from their coworkers and removed from the company culture.
Cybersecurity threats
A distributed workforce increases the risk of company data breaches and other cybersecurity threats. Distributed employees might work from locations with insecure internet connections and risk their devices getting hacked, lost, or stolen. Employees may also use their personal devices to access sensitive company data, increasing vulnerabilities to malware and phishing attacks.
Noncompliance risks
Employment laws vary worldwide, and companies hiring international employees must navigate the labor laws in each jurisdiction they have talent. Engaging employees across borders puts more strain on HR, legal, and finance teams to ensure compliance with local employment, payroll, tax, and statutory benefits regulations.
Best practices for managing a distributed workforce
As companies navigate the new opportunities and challenges of building distributed teams, the following tips can help employers effectively manage a distributed workforce.
Set clear expectations
Communicate goals, objectives, and responsibilities with distributed team members and establish expectations and policies for effective communication. Ensure employees have the resources they need to succeed through training, accomplish their daily work, ask for help, and receive technical and HR support.
Communicate often
Encourage regular communication between team members to maintain an engaged and productive distributed workforce. Schedule frequent team meetings to discuss the current status of projects, team goals, accomplishments, and challenges. Ensure your team has the right asynchronous tools to communicate and collaborate effectively across various time zones.
Hire the right people
Seek employees who demonstrate an ability to adapt to different work environments and cultures. Distributed employees must also be able to work independently, be self-motivated, and be reliable in meeting deadlines. Consider candidates with previous distributed work experience and those who share the company’s mission, vision, and values.
Leverage technology
Utilize technology to administer personalized guidance to employees, help them complete tasks, and provide transparency across teams. Examples include video conferencing and chat tools to facilitate communication as well as project management software and cloud-based tools that allow employees to access resources from anywhere.
Ask for feedback
Regularly ask your team for input to understand what’s working well and what changes can improve the distributed work culture and increase employee productivity. Provide employees with opportunities to safely vocalize their thoughts and ideas, and let them know you value their feedback to foster employee engagement and retention.
Partner up
Businesses that want to scale and take advantage of a distributed international workforce can benefit from partnering with a global HR expert like an employer of record (EOR).
An EOR serves as the full legal employer of your distributed workforce, handling tasks like onboarding, payroll, benefits administration, and other HR responsibilities on your behalf while you manage day-to-day operations.
With an EOR by your side, you can forgo entity establishment, mitigate risk, and engage talent around the world—quickly and compliantly.
Learn more about how Velocity Global’s EOR solution makes it simple to compliantly hire, pay, and manage anyone in more than 185 countries.
