Do remote companies have a competitive advantage?
In a remote company, there’s no central office, and all employees work from home (or remotely). Vestd is a prime example.
In recent years, faster internet connections and a wider array of remote working tools have made it feasible to run a company entirely remotely, and this type of startup offers a lot of advantages compared to a traditional office-based business.
The global pandemic also caused an increase in the number of companies operating remotely as people were forced to work from home.
Despite the restrictions imposed due to the pandemic being lifted, many companies have decided to stick to homeworking, citing the benefits that it offers. Others have adopted a hybrid approach.
While there are huge benefits to running a totally remote or remote-first business, it offers its own set of unique challenges too.
Before deciding how you want your startup to be run, you’ll need to weigh up both the advantages and disadvantages and consider how it affects your new business.
The advantages of remote working for companies
1. Reduced costs
One of the things that prevent a lot of startups from growing early on is the overhead costs they face.
Like the cost of renting office space, which can be extortionate, especially if you want to establish your startup in a major city like London - usually top of the list of the most expensive cities in the world.
You’ll also need to consider utilities such as electricity and high-speed internet as well as furniture and computers. When starting a new company, keeping costs low is essential at the beginning.
If your team can operate remotely, you won't need to pay for office space or utilities. You may not need to buy much in the way of equipment at all.
Unless you're hiring - not every new starter will have the equipment they need prior to joining, particularly if they're switching from an office-based role to join your business.
That's why a lot of remote companies have a 'work from home budget' for company laptops, desks, chairs, etc. Some will also subsidise utility bills or the cost of high-speed internet too.
Take a look at our top tips for welcoming new starters (remotely).
Aside from that, the only other expenses remote startups need to cover is software; tools like Trello, Slack, Zoom and Google Workspace.
2. Wider talent pool
The battle for talent in the UK is fierce. And the skills gap is widening.
Remote startups have access to a wider talent pool and can hire anyone from anywhere. Many remote companies cast an even wider net, hiring people from overseas.
Having access to a wider talent pool makes it much easier to find the perfect fit for your startup. You’ll be able to find a better selection of people with the talent and experience that you need to beat the competition.
This does mean you’ll have more applications to sift through, but if the end result is a better match, then it’s worth it.
Of course, there are local laws and tax implications to think about when hiring talent from outside of the UK. But most importantly, you need to make sure that the same training materials, employee benefits and opportunities are accessible to all (where possible).
And even if some of your employees are not based in the UK, you can still reward them with a slice of the pie.
3. Better work-life balance
Keeping employees happy, motivated and engaged is crucial if you want a high level of productivity and a low employee turnover.
Remote workers are often happier and more productive, as they have more freedom over their work-life balance and spend less of their day commuting to work.
Remote work also allows for greater flexibility with schedules, as employees don’t need to stick to working when the office is open.
For people with families and busy lives, remote work offers a much better alternative, and your employees will be more likely to be happy and focused on their work as a result.
So it comes as no surprise that the option to work remotely or flexibly is a top priority for Brits. By giving employees that option, your startup can stand out from the crowd, while many remain out of touch with their employees' wants and needs.
While there are undoubtedly benefits to running a remote company, there are some downsides too...
The disadvantages of remote working for companies
1. Not all employees are suited to remote work
Some people find the transition from traditional work to remote work difficult. It’s true that being away from an office full of your co-workers can sometimes feel isolating or lonely. It takes practice to develop the ability to manage your own time effectively.
Some people might not be suited to remote work, and that can mean that transitioning from traditional startup to remote is difficult. This also means that you’ll need to be selective in your hiring process.
Ensure that each candidate is aware that it’s a remote position and try to hire people who have previous experience in a remote team. Finding the right people is critical if you want your startup to have a competitive advantage.
2. Company culture can be harder to build
All companies have a culture, but some are stronger and more effective than others. A strong culture means that all employees are on the same page and working towards the same goals.
So it's important to foster a positive culture if you want people to stick around and your startup to be successful.
Culture normally develops over time as employees communicate and influence each other with their behaviour - this comes more naturally in an office.
So, it’s important to find employees that fit into the existing culture. Team exercises and regular communication are also important for developing the right culture in your startup.
But while building a culture this way can be challenging, it's not impossible. Make sure your core values accurately reflect your company's mission and culture. Start from scratch if you must and regularly remind the team about what you're all working towards.
Employee share schemes are great incentives that align teams behind a common goal with the promise of a share in the company's future success - creating a sense of ownership and camaraderie.
Download our free guide to learn more or book a free consultation with one of our equity consultants.
We organise in-person team retreats every once in a while to build upon existing connections and create opportunities for shared moments that will later become fond memories.
3. Communication can be challenging
(But again, not impossible). With a fully remote team, you need to ensure that communication is excellent to prevent things from being overlooked.
Different time zones and not being able to communicate face to face can lead to breakdowns in communication. This can quickly lead to issues and cause your startup to fall behind unless resolved.
Communication tools such as Slack and Zoom are a huge help, but hiccups happen. It’s important to foster a culture of transparency in your startup and ensure that all communication is clear and precise.
And that you respect people's schedules to avoid disrupting focus time and their home life. For example, you shouldn’t expect employees to be online outside of working hours, but you can make sure that everyone’s working hours and contact methods are noted down.
Although it will always be a debate over whether a remote team can be a competitive advantage for a startup, it’s clear that there are a lot of potential benefits.
As more companies choose to try out the remote working model, more information will become available on how much it can impact success. Until then, you can try both and find out what works best for your business model.
Learn about setting up a remote team from scratch and how we transitioned to remote working at Vestd.