Not all that long ago, the vast majority of businesses were organized around the same model. Most employees reported to work at a central location or branch office, and companies recruited talent locally and, in some cases, paid to relocate top performers from distant locations. That was in “the good old days,” when the idea of spending your entire career with the same company was a viable prospect. With the exception of the lifetime employment expectation, that model is still widely used in many industries, but it’s fast giving way to a distributed workforce model, and with good reason.

For the past decade or so, the economy has been undergoing “a basic transformation in what matters and how value is created,” according to James Ware, executive director of the Future of Work Institute, a research and advisory firm that helps companies create flexible workplaces. As the economy has moved toward a more knowledge-based model, talent has become the primary source of economic value in many industries. That is driving changes in where people work, how they communicate and the way that work gets done. “There are two things we know without question about the future of work,” Ware writes in a recent white paper. “It will require significantly more collaboration, and it will be dramatically more distributed.”

Runzheimer International, a firm that specializes in employee mobility management to help organizations reduce expenses, increase agility, and improve employee satisfaction, cites important benefits flowing from distributed workforces in several areas:

  • Real estate. If “distributed” also means virtual, far less corporate real estate is required, equating to greater profitability for the enterprise, lower fixed costs and enhanced ability to make changes quickly.
  • Customer relationships. If “distributed” means employees can live closer to customers without needing to have a corporate office nearby, then face-to-face conversations can happen more often and more quickly.
  • Reduced travel and entertainment expenses. Having employees in closer physical proximity to clients or using technology instead of face-to-face meetings can lower T&E costs significantly.
  • Talent acquisition. Since people can work productively almost anywhere, employers with distributed workforces are not constrained by geography when it comes to finding the best talent. The recruiting net can be cast widely and the best candidate selected.
  • Disaster readiness. Organizations that are distributed gain far greater ability to be ready to serve clients when a disruption occurs in a specific location.

In addition, a distributed workforce offers specific advantages to small and medium-sized businesses, including a potentially lower cost of entry and greater agility than larger firms that have significant resources wrapped up in real estate.

“Distribution can be an advantage in itself, given that face-to-face client interactions and other activities that are directly influenced by geographical footprint can be delegated easily,” says Dmitry Valyanov, president of Bitrix Software, a developer of communications platforms that help SMBs connect with customers, partners and employees.

One of the most notable aspects of a distributed workforce is “completely mundane,” Valyanov says. “Many professionals don’t leave work even when they leave the office, and these technologies allow them to leave the office a bit more often.” Collaboration platforms equipped with social interaction tools such as blogs, forums and videoconferencing help keep teams together, focused and productive, despite the lack of physical presence. “Interaction is more virtual than personal, but the quality of interaction can actually be higher,” he adds.

In an increasingly global marketplace, a distributed workforce frees a business from the conventional constraints of time zones and work schedules, allowing work to be done seven days a week, 24 hours a day if necessary. Workers freed from the hassle of commuting and the distractions of the office environment benefit from an improved work-life balance and tend to be more productive, according to a survey by oDesk, a company that connects businesses and independent professionals and provides a virtual workspace. Half the employers it surveyed reported growing their businesses’ revenue, size or service offerings by using remote workers, some by as much as 50 percent.

While a distributed workforce offers many advantages, there are challenges involved with implementing this approach. A major concern is the possible loss of shared knowledge and corporate culture from reduced face-to-face interaction in the physical realm. However, this and other obstacles can be overcome through the creative use of technology, collaborative processes and the right management techniques. These are discussed in greater detail in this issue of Productivity@Work.