What Is a Distributed Workforce? Strategies, Benefits and Challenges

A distributed workforce simply means a business has employees spread across multiple locations instead of having everyone work under one roof. For example, some employees may work from company headquarters while others work from satellite offices, coworking spaces, or their home offices.

Having a distributed work environment has its advantages, but also its challenges. However, businesses are eager to make distributed work environments work.

When managed successfully, a distributed workforce provides benefits ranging from lower overhead and increased diversity to working with some of the most talented people for a given skill set. Here’s an overview of a distributed workforce model and what you can expect:

• Distributed workforce vs. remote work
• What makes up a distributed workforce
• Benefits
• Potential challenges
• 5 management strategies
• Scaling your distributed team

Difference between distributed workforce vs. remote work

The difference between a distributed workforce and remote work is that in a distributed workforce, a company’s workforce is spread out across different locations. The workforce model is used as a strategy for meeting a company’s goals. For example, people may work in a corporate headquarters, yet customer service may be located in cities across several time zones to provide 24/7 support. And development teams may be located in satellite offices outside of expensive cities with shrinking talent pools, so that the business can hire top talent within budget.

Remote work is a way an individual works and is based on the idea that an individual does not need to work in a specific location to complete his work.

What makes up a distributed workforce

A distributed workforce is made up of the same people you’d have in a traditional workforce, and often more. For example, your distributed workforce can include employees working from the company headquarters, an engineering team working from a satellite office, salespeople working from co-working spaces, and independent professionals working from their individual locations. So, a distributed workforce can also include remote workers.

When COVID-19 forced the world into quarantine, most businesses had a distributed workforce nearly overnight. Although some offices are opening back up, businesses are holding onto their distributed workforce model. They learned that the location flexibility provides the company and their workers several competitive advantages, which we’ll dive into next.

Benefits of a distributed workforce

Businesses adopt a distributed workforce to achieve company-wide goals because the model provides benefits that only come from having a workforce that is geographically dispersed.

Increase cost savings

A distributed workforce can save costs in several direct and indirect ways. You’ll learn about some of the indirect savings in a moment. Where you gain direct savings is in how the model enables you to:

• Reduce the business’s main office footprint.
• Open satellite offices in smaller towns, where the cost of operations may be lower.
• Hire skilled talent located outside of expensive and competitive cities.

Reduce IT costs by moving applications from onsite to the cloud.

Function with greater speed and agility

For decades, nimble tech startups fast-tracked productivity by building teams in different time zones to create a 24-hour workflow. As one team ended their work day, they handed work off to the next team starting their day.

Since talent doesn’t have to work from a main office, you can also expand your workforce to include on-demand professionals. Businesses of all sizes are working faster and getting bigger projects done by having access to the skills they need, when they need them. It’s how CompuVision tripled their productivity and saved 70%.

Hire from a larger pool of top talent

Let’s say you’re looking for a Microsoft Power BI developer—there are only so many in your city, right? And if competition is fierce, you may be looking for help longer than you want. Likewise, if you’re located in a small town and serve a global audience, you may be hard pressed finding marketing and creative professionals who understand the cultural nuances of your customers half a world away.

But when you’re not limited by where someone works, you can search for talent beyond your locale. This can help you secure the right help faster and within budget.

Expand the diversity of your candidates’ backgrounds

Having a talent pool that stretches far beyond your office enables you to bring people with different backgrounds, experiences, and cultures into your hiring pipeline. This may help you make good on the company’s diversity, equity, and inclusion (DE&I) commitments. And multiple studies show that the more diverse a team, the greater the team’s ability to innovate, solve problems, and connect with customers.

A McKinsey analysis of how diversity matters found executive teams with greater gender diversity were 25% more likely to see higher profitability than those with lower diversity. Those with higher ethnic diversity had a 36% greater chance of profitability.

Source: McKinsey and Company

Support employee mental health/wellness

For those working remotely, avoiding daily commutes and having flexible work hours may relieve a lot of stress. Aside from attending scheduled meetings, distributed workers usually have the freedom to work outside of typical office hours and are trusted to manage their day. This allows them time to take care of personal responsibilities and to just be human. For example, they could go to the doctor or take a walk during the day without pressure, because they can make up that work time in the evening.

Increase employee retention

No business can afford to lose valuable talent, which is why employee retention continues ranking as a top priority for companies across all industries. One way businesses are keeping top talent is by answering the widespread demand for work-life flexibility. This includes working remotely, having flexible hours, and living where they want to—instead of having to live within commuting distance to a major city center. If your distributed model enables people to work remotely, you accommodate their desire for freedom without losing them.

The Great Resignation survey by Upwork shows how important flexibility is for professionals today. 17% of remote workers say they’d consider looking for another job if they have to go back to the office. Another 20% are unsure, which may signal that they’re open to consider leaving their job.

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Potential challenges of a distributed workforce

The potential challenges of a distributed workforce may span from operations to human resources. These are a few of the top challenges businesses may encounter and ways to overcome them.

Communication

Communicating across a distributed team requires planned intention. It’s helpful to establish clear policies outlining the ideal frequency and best channels for different types of communication. For example, you may have a rule that, unless it’s an emergency, no one is expected to respond to communications that are sent after work hours, to respect people’s personal time. Or that challenging conversations are done via video chat. Or that documents are shared through a shared drive rather than attached to emails.

Company culture

Maintaining culture over computer screens requires consistent effort. For instance, you can’t present a plaque to an employee for a job well done, but you could publicly recognize them through a group Slack channel then ship a keepsake to them.

It’s important to facilitate opportunities for non-work related conversations too. For example, many teams at Upwork host regular get-togethers online where they talk about anything but work. Workers enjoy it because they learn about each other beyond their role at work, which aids in building stronger relationships and a more unified team.

Engagement

You can increase engagement by ensuring each person feels valued, heard, and supported. Ways to do this include encouraging time off to avoid burnout and scheduling regular one-on-ones and making sure workers feel safe speaking candidly about anything.

Remember that it’s common to feel isolated when working remotely. Think of ways you can translate in-office activities like a birthday cake in the breakroom to something virtual, such as sending a digital birthday card signed by everyone on the team.

Examples of companies with a distributed workforce

When the world was forced to work from home during the pandemic, companies across all industries realized the benefits of a distributed workforce. And a large number put workflows and tools in place to support remote work long-term. So, when offices began opening back up, they seized the opportunity to either transition to, or increase their scope of, a distributed workforce model. Some of these companies include:

• Target
• Vistaprint
• Nationwide Insurance
• Stripe
• Github
• Ford Motor Company
• Zapier
• Verizon
• Lincoln Financial Group
• Airable
• Siemens
• HubSpot
• Dropbox
• Lambda School
• Capital One

5 strategies for effectively managing a distributed workforce

The fundamentals of managing a distributed workforce are similar to managing an onsite team, but with more deliberate actions. If you want to keep a distributed workforce aligned and engaged, you may see better results by keeping these tips in mind:

1. Communicate clearly and use multiple tools
2. Schedule regular check-ins
3. Demonstrate transparency and accountability
4. Prioritize engagement
5. Bring your team together, however possible

1. Communicate clearly and use multiple tools

Effective communication requires clarity and consistency. Before a distributed team begins work, it’s critical that you communicate expectations, responsibilities, and objectives so that each person knows their responsibilities, and what other team members are expected to do.

Source: “Remote Work Revolution: Succeeding from Anywhere” by Tsedal Neeley

Also consider diversifying your communication tools to increase understanding, improve efficiency, and avoid tech burnout—like Zoom fatigue.

Remote work expert, Tsedal Neeley, suggests picking the appropriate level of lean vs. rich media and synchronous vs. asynchronous communication channels. Synchronous communication takes place in real time, like a video call. Asynchronous doesn’t require immediate response, like email.

This may sound complicated, but you subconsciously do this already—probably several times a day. For example, if you’re doing something straightforward like verifying you received a file, you may send a confirmation via Slack (lean, asynchronous). If a situation involves less straightforward communication, such as a group brainstorming session, then you’d probably opt for a video chat (rich, synchronous).

Source: “Remote Work Revolution: Succeeding from Anywhere” by Tsedal Neeley

When working with independent talent, communication is even more important. Independent professionals are used to jumping into projects and ramping up quickly, but they may not be privy to information shared during internal meetings and nuances of the business, such as who to reach out to for questions, expectation levels, and workflows.

A few ways to improve communication with independent talent include:

• Before beginning work, have a detailed discussion of the deliverables they’ll produce and delivery deadlines. If possible, offer samples of previous work, so they understand what’s expected.
• Agree on a way both of you will communicate so there aren’t any misunderstandings. For example, your workday may not fully overlap with the independent professional’s workday, so you two may decide on having a 24-hour response time for emails.
• Explain how their work may contribute to a larger project and how the project may relate to the broader mission of your organization. This added context allows them to share in your vision and tailor their work to your needs. They also feel included, which may increase their willingness to offer suggestions and new perspectives on a project.
  

2. Schedule regular check-ins

You can stay ahead of potential issues by scheduling regular one-on-one conversations with each team member. These could be quick 15-minute chats where you ask how the person is doing, answer questions about their work lined up for the week, and see where they may need support. It’s also a time for you to give constructive feedback.

Conducting regular 1:1s does take time, especially when you have a larger team. But these check-ins can save you time in the long run because it lets you handle concerns before it potentially affects the team member’s work and work life.

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3. Demonstrate transparency and accountability

Whenever possible, don’t just talk about the tasks at hand. Regularly sharing information about what's happening with other projects, goals, and successes within the team, the department, and the business. Having such knowledge provides everyone a bigger picture view of how their work contributes to larger business goals, and may help them feel a greater connection with the business overall.

When your team brings up concerns, show them that you’re actively addressing them by being completely transparent about the feedback you receive and the steps you’re taking to resolve them. This level of openness requires being vulnerable, which may not be easy at first. But the more you listen and respond openly to your team’s needs, the more united and compassionate they’ll all be with you and each other.

4. Prioritize engagement

Creating opportunities for connection aids in supporting a person’s mental wellness, increasing worker satisfaction, and maintaining company culture. One of the most elemental ways of improving someone’s engagement is by recognizing their efforts. Consider regularly thanking individuals for their work during 1:1s and publicly acknowledging a person’s or group’s efforts during team meetings.

Many teams boost engagement by having team meetings via video chat and asking people to turn on their video camera when possible. Seeing a face and body language is usually more powerful than just hearing a voice over the phone and it encourages attendees to be present and focused on the meeting.

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You could also keep meetings fun with different themes from time to time. Although virtual may not be as effective as in-person, there are ways to deepen understanding and connection between team members who’ve never met in-person. For more, check out celebration ideas for virtual teams.

5. Bring your team together when possible

Sometimes, nothing beats interacting in-person. Conversation flows more naturally, you can observe body language, and you have more chances to learn about each other personally. Even remote-first companies, where everyone works from their own location, often arrange in-person gatherings.

When you can’t meet face-to-face, you can create regular team and company-wide gatherings to help everyone feel they’re part of the same mission. Upwork hosts monthly “all hands” video conferences for the entire company, where we discuss organization-wide priorities, share updates and accomplishments, and publicly acknowledge individuals for a job well done. If appropriate, consider including independent professionals and contractors. It shows they’re valued and may improve work relationships between all team members.

Scale your distributed workforce with Upwork

A distributed workforce frees workers and businesses from the limitations that come with being tied to a single location. Chess.com CEO, Erik Allebest, built a leading online chess platform and mobile app with a distributed, global team.

When he needs help and hiring isn’t an option, he maintains agility and productivity with on-demand professionals found through Upwork. He finds that remote, on-demand talent is a complementary strategy for growth when working as a distributed team.

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