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The pros and cons of running a distributed team.

Photo of Greg Harvey
Mon, 2013-01-14 17:13By greg

Over a series of blog posts we’d like to explain how we go about running a distributed company, why we chose this model, what we found works, what didn’t, and how it is really possible to be a global business of home workers. In our case our entire workforce is home-based - this may not be possible for your business. For example, home-based nuclear waste processing is less than ideal. But even the most geographically tied businesses will have people with functions which do not need to be carried out in an office, who could function perfectly adequately from their homes, and everyone would be better for it.

We believe distributed teams are the future for many professions - those for which everyone being in the same place at once is not strictly necessary. Thinking logically, in this day and age why would you rent a large space, heat it, fill it with expensive equipment, pay extra tax for having it, install a telephone line, Internet, desks, chairs, then oblige everyone who works for you to come to that space, every day, without fail, by car, train, bus? Why would you do that, when there *is* a viable alternative - let people stay where they are! Send them a computer and a VOIP telephone, let them expense a portion of their household utility bills - and that is much *much* cheaper, both environmentally and economically.

WFH Cat.jpg

Image: by Susy Morris released under the Creative Commons Attribution 2.0 Generic license.

It’s not just trendy web companies or quick-and-dirty start-ups who are realising this and acting on it. And it’s not just the tech sector either - I can think of estate agents with no shop and retailers with no warehouse. I used to work for Dow Jones, the US-based media giant, and they were busily getting all their support personnel to work from home 5 years ago. They’ve since expanded that out to sales personnel, researchers, analysts, anyone who can reasonably work effectively from anywhere quiet with an Internet connection, and unless there has been some change of policy I presume they continue to do so. The Dow Jones senior management looked at this years ago, and while they had to accept certain personnel must be on site: server technicians, maintenance staff, printers, the obvious, wherever it is not strictly necessary to be based in an office, they decided, people should be able to work from home.

There’s nothing altruistic about this. The company benefits in numerous ways:

Broader pool of talent

This is pretty obvious really. If we had an office in Manchester, we’d be restricted to hiring developers who know Drupal within a 1 hour maximum commute time of Manchester. Sure, there are lots of good people around, but that seriously narrows our pool when the distributed model allows us to hire the World. I’m in a little village just outside Uzes in the south of France, my colleague Pascal is in Lyon, a few hours north, Mig is in Australia, Koen in Spain, Jamie in Cardiff, Steve in Leeds, Salva in London (for now) etc.

Lower salaries

That sounds cold, but if people work from home, you can pay them less, plain and simple. They don’t have to spend £1,000 a month commuting. They don’t go to Starbucks for lunch and spend £7 on a bad sandwich and a massive coffee they can’t finish. They are significantly better off, financially, just by not having to commute and be held to ransom by city coffee shops and sandwich vendors, plus working from home is a perk to most which is worth something in and of itself. We combine it with flexitime, so parents can help out with school runs, those activity-inclined can spend 2 hours at the gym of a lunchtime, if you need to nip out and do a quick shop because you’ve got friends coming over at seven, never a problem.

Lower fixed costs

Offices are very expensive things! Once you’ve factored in rent, taxes (business rates), utilities, furniture, refreshments, cleaners, the bill goes up and up. Sure, we pay back our people a percentage of their own utility bills, and we pay for an Internet connection for them, so that costs us, pessimistically, £1,500 a month (it doesn’t, it’s way less than that with 12 people) - but that’s a long way shy of an office. You can at least triple that for a modest one. We spend the money we save allowing our people to go to industry events at the company’s expense, to meet up and have big get-togethers for team building and a bit of a holiday, and other things like this, so in the end we probably spend about the same amount of money, perhaps a little less, but that all goes towards the next point...

WFH Commute.jpg

Image: by Elliot Fraser, released under the Creative Commons Attribution 2.0 Generic license.

Staff retention

Aside from the obvious benefit of being able to do lots of nice things with the money we save, which is one of the reasons people like working at Code Enigma and are less inclined to leave, no longer is it the case that if someone moves house they necessarily have to look for a new job. We have people who have moved country while working for Code Enigma. We’ve had people go travelling and continue to work. As long as they’re organised and disciplined about where play ends and work starts, there’s no problem with that. So when our people move around, they don’t leave the company. They just live somewhere else. OK, so what of the cons? A fair question, of course there are some - nothing’s perfect:

Personal Problems

Some people don’t get on with the whole work-from-home thing. It can be pretty lonely. While we get together as often as possible, and many of our people have friends and partners and lives outside of work to keep them occupied, it’s a fact that sometimes you just need the human contact of getting out and meeting other people. (We’ve introduced a number of measures to help mitigate this, which we’ll cover in a later post on this blog.)

Working Environment

It’s really important people are physically able to work from home. By that I mean they have a dedicated, quiet space they can comfortably work in. Some people don’t, and you might not find out about it until it’s too late. We learned the hard way about certain health and safety issues (again, more about that and how to mitigate it in a later post) - just because people aren’t in your office, doesn’t make you any less responsible for their wellbeing as they work. When Code Enigma formed we really had no choice but to adopt a distributed model, with the original directors being strung out across the UK and France, but we certainly have no regrets. We’ve learned a lot along the way, but it’s really working for us and we can see how our model can grow with us as Code Enigma continues to take on more people.

Watch this space for the following posts, which we will release every few weeks or so over the next few months: The Technology - the tools we use to make distributed working a pleasure People, people, people - the HR and health and safety challenges of a distributed team Arms around the world - how to go about hiring in foreign countries