Learn why tech firms hire remote workers and how they make it a successful arrangement.
- Remote work is becoming more popular among employees in all industries.
- High-growth companies including Sketch, InVision, Zapier and Clevertech have even built purely remote workforces.
- Facebook, Amazon, Apple, Netflix and Google hire most of the top talent in the San Francisco Bay Area, making it difficult for startups to compete.
- To attract and retain exceptional talent, Silicon Valley startups must embrace the remote work model and shift their focus from local to national (and even global) talent.
It might be fair to call the current remote work trend a renaissance – nearly three-quarters of business teams will have some remote members by 2028, according to an Upwork report. And these days, 52% of the global workforce works remotely at least once a week. It's tempting to think that going remote will save money, but that's not the case. Often, innovative, high-growth technology companies hire remote workers to access the best talent. It's hard to innovate as a technology business if you don't hire top 2% engineers, and usually, you'll need some portion of the team to have domain expertise. But if you limit hires to only a few cities, you probably won't find the best talent.
While it's still advantageous to create a tech company and raise capital in the San Francisco Bay Area, scaling a team there is especially challenging. Facebook, Amazon, Apple, Netflix, Google (FAANG) and others hire many of the best engineers, making it increasingly difficult for other tech companies to compete for that talent. In response, companies like Zapier began looking for alternative ways to appeal to talent. In 2017, Zapier began paying $10,000 in moving costs to employees who wanted to relocate somewhere with a more manageable cost of living. The goal was to appeal to new recruits and decrease the risk that employees leave for a FAANG or similar company. Zapier was already totally remote, made up of nearly 200 employees in 17 countries; after announcing its "delocation" package, Zapier saw a significant increase in job applications.
Companies are no longer limited to the talent in their hometowns. If the search parameters are expanded beyond local areas, then companies can easily recruit the "10x" employees – individuals who can do the work of 10 people. The tech is there to allow distributed teams to seamlessly collaborate with one another. Now's the time to tap into the remote work movement.
The rise of the remote team
Tech companies such as Sketch, InVision, Zapier, Clevertech, Fiverr and Toptal have all proven that it's possible to foster and sustain success with a completely remote setup. Doing so, however, requires rethinking company processes such as communication protocols and learning to build a strong company without the continuous face-to-face interactions that traditional workforces are used to. How will collaboration work if employees can't bump into each other at the watercooler or stop by someone's desk for a quick chat?
Tech, fortunately, can help address many of these concerns. Tools such as Slack and Zoom are designed for easy collaboration and can somewhat replace the organic interactions that occur when workers are all in the same place, helping teams feel like a cohesive unit even when employees are scattered across the globe.
How to make remote work effective
At Moovweb, quarterly on-site events at our San Francisco headquarters help remote workers feel plugged in to the culture and invested in the company's goals. We also use messaging and video conference apps in various ways to connect our workforce that spans three continents. For example, we hold virtual happy hours where remote and San Francisco-based employees chat via video to get to know one another, and some remote employees are using video conference software to simulate an office setting. We also have a video conference "robot" that remote employees can use to awkwardly creep up on teammates who ignore their Slack messages.
Moovweb Director of Platform Engineering Paul Dunham's team is fully remote. At first, the team started the day with a video conference to sync up. Over time, that meeting got longer and longer, and they got in the habit of leaving the video conference open all day on their computers after that morning conference. This helps the team feel less isolated and allows them to participate in the easy, impromptu communications that people are used to in office settings.
Not all of the challenges presented by remote workers can be solved by tech, however. For a remote team to succeed, everyone must agree to be flexible and responsive. When you're operating across multiple time zones, employees often have to jump on a call or troubleshoot a problem outside normal working hours. Time differences can be accommodated with split shifts or night shifts, but regardless, some early morning or late-night work is inevitable.
For example, Moovweb Head of Engineering Mark Brocato is an American ex-pat running the Moovweb office in Tallinn, Estonia, and he uses split shifts to his advantage. Mark wakes up late, codes until 5 p.m. his time, spends time with family, and then comes back to work at night to coordinate with the other locations – notably, the San Francisco office.
The primary benefits of going remote
Successfully managing a remote team takes some effort and requires rethinking typical office culture and processes. But the returns can far outweigh the effort. There are two main ways that building a remote team can benefit your company.
1. It helps you recruit the best talent in the world
When you're not limited to the workers in your ZIP code, you can expand your search to find the best fit for the job and your company. This makes it much easier to land the coveted 10x workers. The Pareto Effect states that 20% of individuals produce between 80% and 98% of the output. This effect applies across all industries; it's been found to be true for scientific discoveries, entrepreneurial pursuits and overall productivity.
It's clear that FAANG companies believe in the Pareto Effect by the way they pay top 2% engineers. By expanding your talent hunt globally, you can recruit more of these high-octane stars. However, going remote won't necessarily save startups money as exceptional talent requires exceptional pay. Remote top talents may earn slightly less than those who work in Silicon Valley due to the cost of living differences, but the cost difference is spent flying teams out to headquarters several times a year. For startups, going remote is mainly about accessing the best talent.
Fortune 1000 companies worldwide are restructuring their offices around employees' de facto preferences. About 80% to 90% of the U.S. workforce reports that they would like to work remotely at least part-time, and studies show that workers' desks are vacant at least half of the time.
The gig economy, coupled with tech tools that enable collaboration, and the hyper-competitive recruiting market found in heavy tech locations, all combine to create an opportunity for companies seeking exceptional talent. Remote workforces are here to stay.
2. It helps you supercharge your business's growth
Let's say your company has a goal of doubling its revenue each year for the first three to five years after launching its product. This is a top 2% outcome, so you'll need top 2% workers to achieve that goal. However, you will be competing with other technology products across the nation or globe. So, if your most critical input is talent, how can you compete with global products with a local workforce?
You can't. You will see a shortage of possible candidates in any local market if you require the top 1% to 2% talent, especially if you require specialized (e.g., domain knowledge) skills for any key functions. Hiring only local employees will become a barrier to success. Scaling at unnatural speeds requires you to tap into the national and even global pool of talent.
To support Moovweb's tremendous growth while maintaining our bar for top talent, we shifted all but 20% of our team out of the San Francisco Bay Area. Going remote was a key enabler for our rapid growth. The money we've saved on San Francisco office costs goes toward salaries, marketing, recruiting and other business functions that actually translate to revenue growth.
In addition to saving money, your employees will save time because they won't have to commute. Commute time is a beast, especially in big cities. The average commute in the U.S. is now nearly an hour a day. That translates to five hours of dead time each week. Remote teams, however, don't have to commute, giving them back an hour a day they can use to complete the work needed to create the innovative products and solutions that will lead to your company's growth. Moreover, the top 1% to 2% of workers acutely understand the value of their time and know that even an hour spent commuting is not the best way for the world to see the impact of their talent. They'd rather spend that time working or with family or friends.
Remote work is the future, and tech tools are making it easier than ever for companies to find success with a decentralized model. Workers benefit, but so do the companies employing them. With a larger talent pool to draw from, you can attract top talent for less and reach new revenue heights.