Jason Fried was in Chicago and David Heinemeier Hansson was still in his native Denmark when the two first started building what would become their most important product.

“David was in college at the time and he only had 10 hours a week. It took four months of time developing the product … but it worked out. We built Basecamp remotely,” Fried says.

Basecamp is a project management tool that’s accessible via any browser and, as such, is well-suited for helping remote teams work cooperatively wherever they may be. In that sense, Fried and Hansson built the tool they needed to work together productively.

Today, everyone in their 50-person company uses Basecamp; 70 percent of them work remotely. Fried says the formula works because his team has the right tools and systems for finishing tasks wherever they are, including the Basecamp software he and Hansson built.

Are you interested in creating a remote workforce environment for your small business? You’ll first want to understand the trade-offs of a remote workforce vs. a traditional on-site workforce. Here’s what Fried and other owners say about the benefits, the drawbacks, and the key questions to ask before deciding to hire a distributed team.

The Future Office: Anywhere

Develop a strategy to address the remote working trend if you don’t already have one. Half the U.S. workforce holds a job deemed compatible for remote work while 20 to 25 percent of the workforce telecommutes often.

Overall, 3.7 million employees — or 2.8 percent of the workforce — work remotely at least half the time, but a staggering 80 to 90 percent of those surveyed say they would prefer to work remotely at least part time.

For his part, Fried says 36 of Basecamp’s 50 workers are located outside of the company’s Chicago headquarters. He expects the majority of future hires to also be remote.

“Most companies want to hire great people, obviously, but they’re limited to a 20, 30, or 40 mile radius from where their office is,” Fried says. “Structuring as a remote team allows us to hire the best people in the world.”

3 Key Considerations

While that sounds ideal, assembling a high-performing remote team takes work. Here are some key questions to ponder before starting down the path:

  1. Can the type of work your company does be completed remotely? Some jobs require physical proximity.
  2. How will you stay engaged with and manage employees who are mostly expected to manage themselves? Even companies that excel at the remote model build in some amount of face time with remote workers.
  3. What type of employees will you hire remotely, and what will they expect from you?

While the combination of broadband internet and fast computers has made it possible to perform dozens of work tasks remotely, success is often the result of a variety of factors — starting with hiring well.

Remote Workers: Untethered, But Not Undisciplined

Some industries are better suited to remote work. Software development is a good example. At Yesware, which makes software for salespeople, product manager Becky Champlin manages a team of four remote engineers: one in England, one in France, one in Minnesota, and a fourth located within driving distance of the company’s Boston headquarters.

“Engineering is the perfect job to be remote … and my engineers that are in London and in France, they can do their job anywhere they have Internet,” Champlin says, noting that her team is highly experienced.

She wouldn’t be as quick to hire a young engineer for a remote position. Why? Physical proximity counts when it comes to training and mentoring, and most of Yesware’s most senior engineering team — the people Champlin would most want new coders to learn from — are located at HQ.

Entrepreneur Wade Foster has a list of attributes that he calls the “defining characteristics of a top-notch remote worker.” Excellent writers and self-starters who don’t need a task list to find something meaningful to do tend to make for the best candidates.

Could your team also work remotely?

Figure out if most of the work can be done via a computer or mobile device. Accounting, software design, writing, customer service, and data entry are typical of the knowledge work that’s generally performed online or on the phone.

Most of it can be done anywhere, but only if you have the right people using the right tools.

Closing the Distance Gap With the Right Tools

“Screen sharing using WebEx, coordinating to-do lists using Basecamp, real-time chatting using instant messages, downloading the latest files using Dropbox — these activities all flow from innovations pioneered in the last 15 years,” Fried and business partner Hansson write in Remote: Office Not Required, their own field guide for distributed teams.

Champlin prefers video chats using conferencing software from BlueJeans. Others like Slack, a wildly popular collaboration platform that operates as part email and part chatroom, and which includes mechanisms for storing everything from spreadsheets to videos.

“I may be sitting one room apart [from my business partner] having a discussion, but we will intentionally move it online — into the appropriate Slack channel — so that there is a shared record and so that anyone can participate,” says Travis Kimmel, cofounder of GitPrime, a 10-person team of remote workers who make productivity tools for software developers. You need to have a similar process in place for keeping your distributed team fully informed.

Working Solo Doesn’t Mean Working Alone

Remote teams aren’t necessarily cheaper to assemble or maintain. For example, Yesware’s Champlin pays to get her remote engineers to HQ for regular visits. Buffer, a small business that makes social media marketing tools, spends 5.2 percent of its monthly revenue to bring its remote team together at least once a year. Only salaries (65.6 percent) and servers (6.7 percent) cost more.

So if travel eats the savings that would realized by foregoing an office space, why have a remote team? Fried says there’s a “penalty” to working in the same office.

“You’re distracting each other a lot more often in that setup,” Fried says. Rather than spending money on extra furniture or other unnecessary accouterments at HQ, Basecamp invests in technology for keeping its remote team running smoothly. Today the business is growing as fast as it ever has, adding more than 7,000 new Basecamp clients every week.

Fishing In the Ocean Rather Than a Pond

Say you run a mail order bakery and need a customer service team to handle complaints. Would you rather pay for an office space and hire a local team bound to an expensive telephone system? Or would you rather hire enthusiastic workers from around the globe who have the basic technology to do the job right in their home office?

Common sense says the latter.

Then again, if you’re in the software industry like Yesware, you may have no choice but to develop a remote infrastructure. Your recruiting success could depend on it. “In Boston, there’s such a high demand for software engineers that we have to offer all kinds of perks. One of those perks is being flexible,” Champlin says. She also believes that millennial job candidates have “come to expect” a work-at-home arrangement in an offer.

Fried says he’s seen similar demands from Silicon Valley workers that hop from gig to gig. He’d rather fish for talent elsewhere.

“One of our best programmers has been living in four cities since he started working for us. One of our best designers lives in a small town in Oklahoma. One is in a small town in upstate New York. They’re all great, and we wouldn’t have been able to hire any of them if the rule was that they had to live in Chicago,” Fried says.

Also, as a remote-friendly small business, Basecamp was better positioned to help a talented individual whose location would almost certainly disqualify him from working for a larger rival.

“One of the best people on our customer service team lives on a fifth-generation family farm in Tennessee,” Fried says. “When we hired him, he didn’t live on that farm. When he got our job he was then able to move. The job actually enabled him to do something in life that a typical job — one where he’d commute into a city — would disable him from doing. We think that’s awesome.”

Do you want to learn more about managing workers wherever they’re located? Sign up for the weekly Small Biz Ahead Newsletter, where we provide you with the latest information on getting the best from your employees. Sign up now.

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