Do Virtual Teams Make Good Business Sense? - dummies

Do Virtual Teams Make Good Business Sense?

By Tara Powers

In order to implement a virtual team in your organization, you want to ensure that you’ve contemplated some important considerations. Virtual teams can be a small part of your business or they can be integral to all of your business functions. You can begin with a pilot virtual team or decide to leverage your technical investment and go all in on virtual teams. You may be a startup who wants to build an exclusively virtual workforce or you may be from an established organization trying to modernize its recruitment and hiring. Whatever you decide, virtual teams must fit your business, culture, and management philosophies, and of course, they must be cost effective.

Keep in mind that not all benefits of using virtual teams are financial. Many additional benefits create a strong business case including recruiting experienced employees, retaining your star employees, and helping you meet your sustainability goals. People who work on a virtual team have also reported that it has reduced stress and conflict among team members, increased productivity and engagement levels, and improved overall job satisfaction. Furthermore, team members get the opportunity to build collaborative relationships with others located in different demographic areas or even different countries.

At the end of the day, incorporating a virtual team model in your company can build your reputation and street cred as a Best Places to Work on online feedback sites like Glassdoor. Site like these are one of the first places potential new hires will go to find out what it’s like to work for you and your leaders.

A virtual team is an iterative model, which means that it’s meant to be adapted and improved over time. Don’t expect seamless collaboration right off the bat. If having a virtual team is new to your organization, just know that it will take time, persistence, and patience, but the benefits are significant and the results are proven.

These sections take a look at where you may incorporate virtual teams in your business and evaluate not only the cost savings virtual teams offer, but also the additional benefits to your business.

Finding a place for virtual teams

Based on strong research that show virtual teams are a good business decision, you may be considering offering remote work options to your full-time employees. Here are additional ways you can incorporate virtual employees for special projects:

  • Just-in-time project need: You may have a project with a definite end date and you’re in need of specialized skills to supplement your full-time team. Places like and can help you find someone quickly on a contract basis.
  • New product launch: Say that you’re launching a new product line and your goal is to be the first to market. Bringing together a team of virtual freelancers or contract workers can help you get to market quickly without having to hire full-time staff.
  • Seasonal staffing: If your staffing needs change throughout the year, you may consider hiring virtual workers to support your busy season. Doing so enables you to scale your business at certain times of the year with remote workers and decrease staffing numbers as needed.

Each of these examples can save you time, money, and stress associated with recruiting, hiring, and onboarding full-time employees. However, the decision should be based on your business need. Ask yourself these questions:

  • What is the opportunity or challenge in the marketplace that I’m trying to address?
  • What are my clients asking for or complaining about?
  • Are these opportunities or challenges well suited for virtual or remote work (for example, customer service outsourcing)?
  • Do I have the resources internally to handle these issues?
  • Does my current staff have the knowledge, skills, and abilities to handle these issues or opportunities?

These questions can get you started thinking about what options to use for remote workers. After you’re clear about your needs and direction, you can start creating your business model and game plan.

Counting the real ROI savings

Global Workplace Analytics has spent years developing research-based models and calculators to estimate the impact and return on investment of different workplace strategies, including telecommuting. Public companies, governmental agencies, and private sector employers have utilized its savings calculator to support the business case for virtual and remote work.

Based on 2017 Global Workplace Analytics data, it estimates that more than 3.9 million employees telecommuted part time or full time and collectively saved employers $44 billion a year, or an average of $11,000 per half-time telecommuter. That’s an impressive number. But what’s even more staggering is that if everyone who wanted to work remotely could do so even half of the time (85 percent of all employees), the savings to employers could total approximately $689 billion per year. That’s a whole heck of a lot of money. Here are where some of the cost savings come from:

  • Productivity savings: The largest cost savings is from an increase in productivity. Productivity goes up significantly because people aren’t distracted, they get more done in less time, and they can work a flexible schedule that suits them. This equates to $27.5 million per year in terms of savings.
  • Real estate savings: The second largest cost savings is from real estate, which has saved an estimated $7.6 billion a year for employers.
  • Sick time/absenteeism savings: When people aren’t in the office spreading germs around, less people get sick. Even if your employee has a mild cold, she can still complete her work from home. Less sick time equates to $5.1 billion in savings for the employer. Furthermore, you don’t have to shut down for snow days, floods, or other natural disasters, extending cost savings.
  • Reduction in turnover costs: With the flexibility that a remote work option provides, employees stay with their employer longer, which equates to $1.5 billion of savings in turnover cost.
  • Commuter savings: People who work full time on a virtual team can save more than $4,000 a year in commuting costs including auto maintenance, food, clothing, and dry cleaning. Don’t forget the time people save by not having to commute to work every day. The average employee gains back the equivalent of 11 days per year, which is more than two weeks of work that she spends otherwise sitting in her car. How can you put a price tag on that?
  • Meeting efficiency: Working remotely certainly reduces your travel time to get to meetings. How many times have you been in a meeting and you’re waiting for someone to come from another office because she’s stuck in traffic, her car breaks down, or she was in an accident? The amount of time saved starting and ending meetings on time certainly equates to dollars saved when you consider the salary you pay every person in the meeting to be there.
  • Reduction in parking expenses: Parking in many U.S. cities is expensive. This continues to be a complaint in every crowded city I work in — there is nowhere to park. Working remotely eliminates this issue and the expense associated with it.

Thousands of companies around the globe have made 100 percent virtual and 50/50 virtual work for them. Most companies that believe in virtual teams and a distributed workforce are mystified by the need for an ROI measurement, stating simply that productivity in virtual teams is measured by results. That said, many organizations are looking to making a business case for going virtual.

Winning the recruitment and retention war

Going remote expands your access to a global talent pool and can help you fill capability gaps that you can’t find in your local market. It allows you to recruit anyone from anywhere in the world and fill open position more quickly. Most Millennials seek out flexible work options and offering remote work opportunities provides a level of flexibility that makes employees more satisfied. And guess what? Happier employees stay longer at your company.

Remote workers are able to spend more time with their family and friends and improve relationships with the people they love. They can care for a sick child or aging parent while still checking in with their team and completing work, volunteer at their child’s school, or participate in their community. Their quality of life overall improves because they’re able to balance a multitude of responsibilities with more ease including family, friends, aging parents, pets, groceries, health and wellness, house projects, cleaning, and so on.

Impacting the environment

Virtual work allows you to expand your business without expanding your footprint. Companies use less electricity in their buildings and purchase less food, snacks, and supplies. Embracing remote work also saves on gas and reduces pollution by getting more cars off the road.

In its State of Telecommuting 2017 report, Global Workplace Analytics found that telecommuters have saved more than 7.8 billion vehicle miles and avoided 530 million vehicle trips, which means less wear and tear on roads. The lack of vehicles on the road has helped avoid three million tons of greenhouse gasses, reduce oil consumption and dependence on foreign oil, and circumvent traffic accidents with a total environmental impact and savings of $1.5 billion.

Another important positive social impact is that virtual work enables disabled people, seniors, or people with special needs to work out of an accommodating home office. It also provides people who are living in remote or depressed areas of the country to find work as long as they have access to a reliable Internet connection.