How Companies Benefit from Distributed Work

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During and after the COVID-19 crisis, I attended several virtual meetings during which business owners and leaders worried about their employees having become “spoiled” by working remotely during the stay-at-home period and about whether they’d have a hard time getting people back into their corporate locations to work.

Even though—as I’ve written in a previous article—few aspects of working from home during the coronavirus crisis could have felt much like a benefit to anyone, making the idea of quarantine-as-pampering laughable, none of these conversations gave me an appropriate opportunity to get on my soap box about moving FrogDog to a distributed workforce structure a few years back and share how I consider the transition one of the best decisions I’ve made as a business owner. (If you’d like to review a full set of articles on our transition to distributed work and our learning experiences to date, I’ve collected them here.)

Though no one working remotely during COVID-19 could have called it an idyllic experience, one destined to “spoil” a person, I do think many people who’ve long worked in corporate offices have seen via the crisis that centering knowledge workers in offices with set working hours makes little sense. The traditional corporate office with all-team working hours drags behind a time when equipment and materials required a centralized location from which employees could access them.

Now that everything has moved (or has started to move) to the cloud and high-speed Internet connections have become more standard, the traditional corporate office looks and functions like an expensive dinosaur. Working in one feels more like habit than necessity.

Further, research shows that working in a corporate office hinders rather than helps quality work. The benefits to companies of distributed workforces now fully outweigh the advantages of centralized corporate offices.

As companies rarely act from places of pure altruism, preferring to operate from dollars-and-cents perspectives, let’s enumerate the six top financial benefits of distributed workforces to companies.

Financial Benefit #1: Reduce the Spread of Illnesses across Your Workforce

Right after the COVID-19 stay-at-home orders lifted, allowing employees who could work from home to continue working from home reduced risks to their health.

Beyond COVID-19, allowing employees to work from wherever reduces the spread of everyday illnesses like colds, flus, and stomach bugs across workforces.

No one wants someone on their team or multiple people on their team to get sick—and this is true purely from a human-compassion standpoint.

More coldly, from the perspective of business productivity and output, sick employees have a quantifiable cost to every business. When an entire office or team goes down simultaneously or in quick succession due to a sickness passed around the office, it causes a quantifiable hit to a company’s productivity.

Financial Benefit #2: Hire the Best Employees for Your Business

When you don’t require everyone to work from centralized corporate offices, you can attract people not based on geography but based on their fit for the role and the company.

Finding the perfect fit of candidate and company poses so many challenges that limiting the pool to the geographic area within which people live and will commute from their homes to your corporate office unnecessarily eliminates too many possibilities.

Years later—in fact, nearly fifteen years later—I still reflect on a fantastic candidate who I could not hire. He lived (and couldn’t move from) Las Vegas and we’d set up corporate office in Houston. Today, neither of us would even have geography on the table for consideration.

The best employees are always the best financial decision. If you’ve ever looked at your workforce KPIs—turnover rates, recruitment costs, and productivity levels per employee—you might even have an exact number to associate with this distributed-workforce benefit for your company.

Financial Benefit #3: Decrease Office Overhead

I don’t know a single company with a traditional office that doesn’t have it as one of their most massive corporate expenses.

Imagine if you could wipe the physical-office expense item off your P&L statement and use the freed-up funds for investment, research and development, better salaries and benefits, increased staff levels, marketing, and beyond.

Even if you reduce your office space to a smaller footprint to accommodate in-person meetings, a centralized location for files that need to be kept in physical form, and maybe a workspace or two for people who might need one on occasion, you’ve saved a bundle.

Financial Benefit #4: Improve Job Satisfaction

Studies show that people who can work remotely have higher job and life satisfaction, experience greater feelings of autonomy and control over their work and their lives, and produce higher quality work more efficiently.

A study by Marie Antoinette Schall published in the Spring 2019 issue of the San Jose State University SJSU Scholar Works found that remote work increases job satisfaction levels and that the level of satisfaction increases with the amount of work done remotely.

“Engaging in remote work may benefit employees with providing a more autonomous work environment and, in parallel, mitigate work-family stressors,” the author writes. “In return, this may also benefit the employer by having a more satisfied workforce.”

An earlier study by Lonnie Golden, Julie Henley, and Susan Lambert, published in 2014 in the Journal of Social Research and Policy, found “that discretion over the timing of one’s work matters far more for happiness than does the duration of working time or income. Indeed, the associations found between job discretion and happiness are apparently independent of income and work duration, and the associations prove quite robust over most specifications and control variables.”

How does employee happiness and job satisfaction produce greater results? Keep reading.

Financial Benefit #5: Attract Top Job Candidates

As we all know, people with the most sought-after skill sets and professional experiences have their choice of workplaces, no matter what the economy.

High quality candidates want to feel growth in their careers, a key driver in their quest for companies where they can learn and grow from other colleagues and from professional-development opportunities. And everyone wants to work at companies with high employee job-satisfaction ratings—though only the highest quality candidates get first choice of where to work.

A 2018 Korn Ferry poll found that 33 percent of surveyed executives look for new work because they need a new challenge and 24 percent want to move to a new employer to find a better cultural fit.

If you have a well-designed distributed workforce, you will cover these key criteria quite easily. Distributed work provides autonomy, attracts top-notch staff to raise the overall team standard, and results in high levels of employee job satisfaction and happiness, as outlined above.

The resulting dividends in enlisting top recruits and reducing turnover will make a huge difference to your top and bottom lines.

Financial Benefit #6: Gain Overall Productivity and Improve Work Quality

Research shows that happier and more satisfied employees—like the kinds found to work in distributed workforce structures—have higher productivity.

In an extensive study of happiness and job satisfaction compared with productivity over a six-month period, a February 2020 study by Clement S. Bellet, Jan-Emannuel De Neve, and George Ward, published in a journal from Said Business School, found happy employees 13 percent more productive and reported finding “a strong causal effect of worker happiness on sales.”

In academic speak, that’s a big statement.

A Key Point: You Still Need a People-Centered Workplace

You can’t simply close the office and tell everyone to work from wherever and reap the six benefits outlined in this article.

You must set up everyone for success, including delineating expectations, thoughtfully restructuring your workflow and your processes, and giving employees the tools they need for effective and efficient efforts.

Further, you cannot assume that because people work from wherever, they are accessible whenever. You will destroy the advantages of a distributed-work structure if you require always-on behavior from your employees. Gradually, you may find your team moving toward asynchronous work, as the FrogDog team has. (Asynchronous work turned into the real game changer for us when it came to effectiveness, efficiency, and employee happiness. Stay tuned for an article covering that topic.)

I won’t pretend that any of these changes can happen overnight or that they should come as no-brainers for anyone. As with all major shifts, you need to think through how to implement them and you need to put programs in place to continually improve as you and your teams learn and adjust to the new work-world order.

Everyone has a different company and culture, and so your transition period will differ from ours by nature and necessity. However, I’ve always gained from the experiences of others when I’ve made big changes in life. Toward that end, I’ve created a series of articles on our experiences transitioning to and growing in a distributed-workforce structure to help anyone making the shift. You can find the ever-growing set of articles and resources via this link.

I’ve Gone Permanently OOO (Out of the Office)

When I try to imagine working in a traditional corporate office again, it feels like an entombment. I no longer understand how people can endure traditional offices for the traditional workday.

I don’t know how I stood it for as long as I did.

An open-plan office was the height of terrible, yet even after I had an office with a door, the distractions and time wasted in a corporate office shock me to recollect. Corporate offices make it impossible to structure work and setting to best suit maximum effectiveness.

And I have so much more clarity on my team when I can assess people on the quality of their efforts without the distraction of the amount of time they’ve spent in the office and how much they’ve spoken in meetings. (Yes, people truly do show up to a full day in the office to get nothing of value done all day.)

Throughout my years in a corporate office, I felt exhausted and stressed—and not in a place mentally or physically to do my best work. I didn’t produce the best strategic thinking or the best operational efforts. And I didn’t do the best job I could in managing or leading people as the head of the company or in bringing in new business to grow the company.

As I look back on it, I realize that I could have done a lot better on so many counts if I hadn’t felt constantly overwhelmed and overstretched—a feeling the office environment exacerbated.

Ridiculous.

I don’t know if we’ve finally reached a revolution in the way that corporations structure knowledge work, but I sure hope we have.