Before rounds of layoffs resulting from COVID-19, companies worldwide have been struggling to grow their teams on time and at budget. Even with a temporary flux of available talent, conventional methods of hiring and building teams are no longer practical and companies must adapt to the “new work normal”. This is especially true for early-stage companies developing next-generation technology that find themselves competing for the same talent as thousands of other larger businesses with better-known brands.
Defining Remote-First
To combat many talent challenges, companies have been hiring remote workers and building operating infrastructure to support distributed teams. This business strategy referred to as “Remote-First” is described as “A team or company of remote workers, working from home or shared workspaces, utilizing processes and tools designed to operate seamlessly across time zones.”. Some remote-first companies are a hybrid of on-premise sites and remote workers working on distributed teams. Other remote-first companies like Splice Machine have no permanent office space and everyone works remotely. Doist has identified some common characteristics shared by Remote-First companies.
Common remote-first characteristics
Employees are empowered to work remotely.
Asynchronous communication is pervasive.
Process and tools support all time zones.
Meetings are rotated and staggered.
Communication is posted on public channels.
Decision making is transparent and inclusive.
Career advancement is not biased toward the office worker.
What’s Driving the Popularity of Remote-First Teams?
Demand For Talent
As the technology industry continues to advance at a rapid rate globally, the demand for talent, especially with niche expertise, is growing much faster than the supply of talent. This is forcing companies to rethink how they can attract the most qualified individuals to keep up with their growth plans while retaining their team of top performers. Offering people the flexibility to work from home is one of the best ways to solve several challenges employers face.
According to a survey published in November 2018 by Indeed, 47% of employees polled stated that a remote-work policy is important to them when looking for a new job. 40% said they would consider a pay cut for a job that allows them to work from anywhere. In 2016, TinyPulse conducted a survey of over 500 remote employees and found that they were happier, felt more valued, and were overwhelmingly more productive than their on-premise peers, resulting in lower turnover.
Better Work Tools
At the same time, the gig economy has surged as better, less expensive, and often free enterprise-grade communication tools make it possible to work from anywhere in the world. According to an Intuit May 2017 publication, the percentage of Americans in the gig economy was 34% in 2016 and is expected to grow to 43% by 2020. Attending a team meeting on video conference versus huddling up in a cramped conference room is becoming the norm. And since COVID-19, most people have experienced first-hand how accessible and easy this technology is to use.
Expensive Office Rental Rates
Cost of operations is another compelling reason why many companies of all sizes are embracing a remote-first distributed workforce model. Some of the largest technology companies are based in big cities like San Francisco, New York City, Seattle, London, Tokyo, and Munich that also have some of the highest corporate real estate costs in the world. In the top 25 tech cities, as defined by Cushman & Wakefield’s Tech Cities 2.0 report, the cost-per-square-foot for office space has risen 59% between 2000 and 2018, and from an average of $199 per square foot to $316. This exorbitant rise in cost has challenged companies like Dell and Aetna to look for alternative solutions. According to Global Talent Trends Report 2019, Dell’s flexible program has saved an average of $12 million annually since 2014 due to reduced office space requirements. 47% of Aetna's employees use flexible workspaces, saving Aetna 2.7 million square feet of office space and about $78 million annually.
A shortage of good talent, new and better communication tools, and costly office space are challenging companies to rethink how they operate. Even amid layoffs, there is always a demand for top talent and they are more apt to join a company that offers a flexible work option over a competitor with less flexibility.
Statistics Validate Remote-First Strategy
As the use of distributed teams continues to increase in popularity by companies of all sizes, statistics report high levels of communication, productivity, and employee loyalty at companies that have implemented remote-first business practices pre-pandemic. Companies like Automattic and InVision that started 100% distributed have hit the 1000+ employee mark world-wide and are demonstrating the model’s scalability and sustainability. The use of remote-first, partially-distributed teams is growing equally in big corporations like Dell, Aetna, Salesforce, Cisco, Adobe, and Rackspace. Publications like Standford’s two-year study show astonishing productivity boots when employees are given the flexibility to work from home.
Articles and tips on the topic of working remotely influenced by COVID-19’s social isolation mandates are growing at a rapid rate but there are few stories published by companies like Splice Machine who describe their move from an on-premise office space work model to a fully remote model before the pandemic.
Splice Machine transitioned from a traditional office environment to a fully remote work environment in August 2018. We recently decided to publish a series of 12 posts that outline our remote-first journey for people leaders who are building early-stage startups or are looking for ways to promote a more flexible workplace through remote-first policies and an ebook.
Our posts will include resources we referenced, trade-offs we weighed, and some samples of proposals, policies, programs, and tools we created that helped us become a remote-first, globally distributed company.
Watch for our next post which will describe the advantages remote working offers both early and later-stage companies. You may also view all of our posts on Splice Machine’s career page or download the Splice Machine Journey From Office to 100% Remote ebook that our posts are based on.
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