CREATING AND MANAGING A SUCCESSFUL REMOTE TEAM

Recruitment, Management, and Communication Tools

Tim Burgess, Co-Head, MSI Global Expansion Duncan MacIntosh, Co-Head, MSI Global Expansion

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CREATING AND MANAGING A SUCCESSFUL REMOTE TEAM Many employees today can and do work from anywhere, whether it’s a home office or table at Starbucks. Virtual workers and remote teams are fast becoming the norm, and companies that can master the recruitment, management, and communication tools needed to ensure their effectiveness reap significant benefits; these include both lower costs and the ability to hire workers based on ability, not location. That said, some organizations aren’t entirely sold on the idea, especially for employees involved with technical, sales, or creative work. In these instances, remote teams can seem to entail greater risk than officebased workers, which some believe are easier to manage and control.

Companies that can master the recruitment, management, and communication tools needed reap significant benefits

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VIRTUAL TEAM PROS AND CONS The key advantages and disadvantages of using remote teams are as follows:

ADVANTAGES

Cost Efficiency: As noted, using remote workers can cut costs, as less office space is needed. A remote team can be managed from one office, regardless of worker locations. Ease of Entry to Overseas Markets: Companies expanding overseas can use remote team members in host countries for marketing, sales, and other initial business activity. This lets them explore new markets without the need to establish branch offices right away. Local employment requirements can be met through outsourcing payroll to a third party. Access to a Wider Talent Pool: Hiring remote workers allows access to some of the most highly skilled talent in a given industry, as companies are no longer bound by geographical restrictions.

DISADVANTAGES

Training Effectiveness: Remote team members may not have the same training opportunities as office-based staff. Some types of training can be provided online (via webinars, for instance), but this cannot always replicate face-to-face interaction or enable real time learning from other team members. There may also be less reinforcement for successful techniques or methods, since most work is done independently. One solution is to offer periodic training in the home office or in specific geographical regions, where all team members can gather for a few days of face-to-face training and meetings.

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Need for Onsite Support: Even the most talented remote staff may not be able to resolve all issues by phone or online, and there may be a need at times for on-site customer service. This is particularly true for problems with hardware, servers, firewalls, and other network issues. For this reason, localized customer support may be necessary in some instances, in addition to the remote technical staff. Technology Threats: Remote team best practices must include measures to counter technology threats. Data security is a paramount concern for many tech oriented companies and remote staff should be monitored for potential data breaches or misuse of information. Training modules should cover this area in detail, with regular refreshers. Intellectual Property Protection: For some companies, another issue in using remote workers is the protection of intellectual property, particularly for those who have access to software, are developing new tools, or are not adequately protecting passwords or customer data. To counter this, companies must assess the breadth of information available to remote workers and put controls into place, including non-disclosure agreements that are signed and clarified before work begins. Companies must also clearly articulate all data security protocols as well as the consequences for any inappropriate use of confidential data or intellectual property.

As technical staff typically has the authentication codes and passwords needed to access sensitive customer data, encryption methods, and proprietary computer programs, stringent safeguards must be implemented to prevent intrusion or theft.

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COMPLIANCE ISSUES Companies that hire contractors or employees in other countries should be aware that this exposes them to compliance risks with regard to immigration, tax and employment laws, just as if the company had a local office and formal business presence in the country. Therefore, the benefits of using remote workers should be weighed against these considerations. Specific issues include hiring employees vs independent contractors, contractual obligations, permanent establishment, and taxation.

HIRING EMPLOYEES VS. INDEPENDENT CONTRACTORS Hiring an independent contractor as a remote team

misclassification more seriously now due to worker

member is not only easier than hiring a full-time

protection issues and lost tax revenues.

employee, but also a way to hire him or her on a trial basis before offering full time employment.

Companies should therefore base contractor hiring decisions on the type and scope of the individual’s

However, using contractors can create significant

role and the degree of autonomy in his or her

compliance risks around misclassification; what

position. Also, each work role should be evaluated

this means is that a contractor actually functions

and managed for compliance with local standards. If

(or is perceived to function) as an employee under

all work is performed remotely, then the company’s

the rules of his or her own country. There can be a

home country laws will probably not apply for

number of dire consequences associated with this

purposes of classification.

and an increasing number of countries are taking

FACTORS FOR CLASSIFICATION INCLUDE THE FOLLOWING οο

Work Role and Activity: Sales and marketing efforts can often be safely conducted by ontractors, but if contracts are being executed and revenue generated, this may be seen as an employee (vs. contractor) function.

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Method of Engagement: If the contractor is solicited through a third party freelancer network or agency, the risk of misclassification is low. Any contractor hired directly should function as a credible business to avoid being classified as an employee.

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Payment: How a worker is paid will also influence his or her classification, since most contractors will work on a project basis (as opposed to receiving a monthly salary). If a company begins paying the worker monthly and offers benefits and leave, there is a risk that the contractor may be classified as an employee.

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CONTRACTUAL OBLIGATIONS

Whether the worker is engaged under an employment contract or as an independent contractor, the terms of the agreement will be influenced by the company’s home country as well as the worker’s country of residence. There are several types of contract clauses that may not be enforceable in some countries, including: Confidentiality: Non-disclosure of trade secrets and protection of intellectual property must usually be spelled out in the contract. The key is to not make the provisions too onerous, or to unnecessarily restrict the worker. Non-compete: Some countries do not favor non-compete clauses and may limit the scope of a noncompete to a geographical region or a specific time frame. Notice and Termination for Employees: The employment laws of the worker’s own country or the country in which the work is performed may override any contractual notice periods or cause for termination. Severance: Severance payments are also statutory in some jurisdictions, and companies should be wary of any independent contractor seeking to be classified as an employee, as this may entitle him or her to severance payments that normally wouldn’t be permitted.

PERMANENT ESTABLISHMENT Permanent establishment (PE) can occur when an employee on foreign assignment conducts business activity that triggers corporate tax liability within the host country. While this may seem an unlikely result of using a remote team member to make sales or fix technical problems, many countries are increasing their scrutiny of business activities undertaken by local representatives, and even concluding that contracts executed virtually are sufficient to trigger PE status for the company. Although the bottom line test for PE has typically been revenue creation, there is movement toward a broader definition that could include remote workers in business functions such as consulting or marketing.

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TAXATION Companies and their local entities risk noncompliance with tax regulations when they employ workers in foreign countries. These risks include liability for both the employee and employer portions of unpaid statutory contributions, as well as unpaid taxes.

When formally employing a remote worker in the individual’s own country, running a remote payroll from the company’s home country may not be permitted under host country laws. In this instance, to avoid non compliance, a local entity or GEO solution may be needed to run payroll.

ARE REMOTE TEAMS WORTH THE EFFORT? HOW TO ASSESS. Utilizing a remote team only works if there are advantages for both the employer and employee. Core considerations for each are as follows:

EMPLOYERS

EMPLOYEES

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Flexibility – Life events such as pregnancy, family relocation, and vacations can be factored into one’s career path.

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Work schedules – Depending upon job requirements, remote workers may be able to schedule working hours around personal and family responsibilities.

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Less commuting – Most remote workers will be in a home office all or part of the time.

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Workers compensation and safety requirements – these will need to be adapted to the home office environment.

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Reduced stress and increased autonomy – this typically leads to greater productivity and work recognition.

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Ensuring time and project flexibility – using remote teams can allow companies to extend support hours or service more markets in real time. This approach can also improve efficiency. For example, a remote team in a different time zone can perform tasks overnight so that things are in place when the “home team” starts work the next day. Costs – Using remote workers cuts costs as there is less need for office space and less energy expended for data centers. Retention and turnover – Retention is improved and turnover costs are reduced as new remote workers can be added more quickly that officebased employees and are typically retained longer when location is not an issue.

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Wider talent pool – Companies can attract talent from anywhere and accommodate more age ranges.

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Monitoring – Remote workers may need to be monitored more closely to ensure productivity.

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SETTING UP A REMOTE TEAM To build an effective remote team and onboard the right workers, companies must first clarify expectations and establish modes of communication. This increases their likelihood of finding and attracting the type of worker they seek, and interviewing only those that are a good fit. While some companies look to former employees or contractors for the latter, a concerted networking approach often works best. Once a candidate has been identified, it is important to determine during the interview process whether he or she is a “self-starter” who can work independently and not require the social interaction of a typical work environment. He or she must also be trustworthy and reliable and have the ability to complete assignments and tasks. Failure to hire people with these traits often means more work for managers, as they will need to monitor them more closely. The method used to interview candidates for remote positions can also provide an indication of their work and communication habits and overall suitability. Most remote work requires both written and verbal communication, so using a combination of email, phone and video interview methods will reveal a candidate’s ability to respond and articulate in each format.

Even though you are working with a remote worker, you need not make the interview feel distant. The more methods of contact that you use, the higher likelihood you have of making the right hiring decision.

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MANAGING A REMOTE TEAM By combining technology with traditional management techniques, a remote team can be as or more effective than an in-office team working on a similar project. With the right team members, ongoing contact, and the appropriate project management and communications tools, a remote team can be a highly cost-efficient means of achieving business goals. That said, the first step toward effectively managing a remote team is defining its purpose. By doing this, management can ensure that all members are on the same page, with clear and identifiable goals.

According to the MindTools website, a team charter can be used to state a team’s mission, define roles and responsibilities, identify key resources, and establish how the team operates. It notes that team charters often use the SMART framework (Specific, Measurable, Attainable, Relevant, Time-bound) to set goals and objectives. Once this has been articulated, training can begin, which will require a different and perhaps more creative approach.

TRAINING To accommodate language and time zone differences, training methodologies can include the following:

Webinars/Video Training: Web-based training is essential for remote workers. It may include live webinars, recorded video sessions, and/or live video conferencing. For some, phone conferencing is not considered as engaging, given the sophistication of current online communication platforms. Periodic On-site Training Sessions: When a new remote team member is hired, a best practice is to bring the employee to the company’s headquarters for on-site training. This gives him or her exposure to co-workers, management, and the company culture and enables direct skills training. This could then be followed up with regular trainings each year that promote both team building and skill development. Individual Training: If a worker is located in an unusual time zone or assigned odd hours, he or she may require individual training via Skype, phone, or chat. This is an issue that should be discussed during the interview stage with a candidate, to ensure that he or she can be available for scheduled trainings or can be flexible with individual sessions. Schedule of Regular Voluntary Sessions: Companies with many remote workers engaged in the same basic role may wish to offer regular training and updates on a fixed schedule. Workers can elect to sign on at the scheduled time if they want to participate.

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MEETINGS

In addition to the above, all team members should meet together on a regular basis. This may be a challenge if there are considerable time differences, but times can be varied to accommodate everyone equally. Meetings should have an agenda that is sent in advance, followed by a summary of the discussion and decisions/action items for team members not in attendance. This helps to better monitor project progress and activity and to build a cohesive virtual team.

TRACKING PROGRESS AND PRODUCTIVITY Hiring and connecting virtual teams is only the beginning. Management’s primary tasks then consist of monitoring work output, overseeing quality and timelines, and tracking worker time and activity. A key concern for those considering the use of remote teams is that workers won’t be as productive without onsite supervision. However, virtual supervision can be just as effective, as there are many ways to monitor productivity.These include time tracking tools, message boards, and websites such as Slack.

It’s also helpful to set daily or weekly milestones for each worker, relative to his or her tasks, as well as overall team milestones. Beyond this, it may be necessary to check in on remote workers more frequently than office staff to offer support and clarify project direction. 10

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COMMUNICATION AND MESSAGING New and improved technologies have have been

used for team meetings and ongoing daily contact to

a catalyst for increased use of remote teams, both

create a “virtual” office online.

domestically and across international borders. It is now possible for a business to recruit, interview, onboard, and train new employees without ever meeting in person. These same tools can also be

There are three separate categories of tools available, and most have desktop notifications and/or mobile applications.

Skype: This very popular messaging and video chat program can be highly effective for remote teams. Mobile apps and ease of use mean a worker can receive instant messages throughout the work day. Slack: A newer tool in the world of virtual communication, Slack offers a platform with multiple channels that let members log on and stay connected while working remotely. In essence, Slack strives to provide a “virtual” office experience, and enables multiple employees to be involved in a single conversation. Google Hangout: This recent development by Google combines instant messaging, voice calls, and video chat that can be accessed by several team members at once.

TASKBOARDS Work projects and assignments are best managed through taskboards such as Trello or Basecamp. Team members involved in a specific project can post messages, send files, set timelines, and monitor progress. Taskboards also have notification apps that inform team members when there is a message or progress with a project.

FILE HOSTING Although it is possible to send files via Skype, email, or directly through a taskboard, some remote teams use Internet-based file hosting such as Dropbox, Google Docs, or Google Drive. These tools are designed for uploading, downloading, and editing any file type and can be customized for sharing with selected team members or management.

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PATH TO SUCCESS: ONGOING STEPS Establishing and managing a remote team requires continual adjustment and refinement. The most successful approach not only includes definining the team’s purpose and using the right tools, but giving team members the opportunity to provide feedback on how the process is working from their perspective. This can be done during team meetings and/or by using periodic surveys and reviews of communication, management support, and satisfaction with the virtual work environment. Beyond this, there is also the challenge of building a team culture and addressing the sense of isolation some experience when working remotely (which can lead to morale problems if not recognized). Management can address this and help build connections by taking a more personal approach, encouraging team members to share their experiences, and offering fun and informal virtual team events.

MAKING IT EASIER: GEO/OUTSOURCING Given the complexities of managing employment or contractor relationships in multiple foreign locations, some companies elect to use a GEO solution to handle the formal employment relationship. Doing so makes it easier to add and/or transfer employees and minimizes management’s administrative burden by ensuring compliance with all local employment laws, running the payroll, and fulfilling immigration requirements.

SUMMARY Greater use of remote teams is inevitable given the technology now available and companies’ increasing acceptance of this practice. However, a team’s success depends on several key factors: recruitment and training processes and use of the appropriate project management tools and techniques. As with any human resource initiative, there are also both costs and benefits to consider, both for the employer and the employee. 12

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BIOGRAPHIES

Tim Burgess Tim is co-head for MSI GEO Services and is co-founder of ShieldGEO. Tim is a subject matter expert for GEO, providing in-country solutions for employment, taxation, and immigration requirements around the world. He has co-built a global network of companies to assist multinational corporations with immediate global expansion needs through outsourced employment, including provision of payroll, tax, and work permits. Tim believes that businesses should have access to the global pool of workers and that highly skilled workers should be encouraged and supported in gaining international experience. He is a senior global HR practitioner and has been working on international assignments for over 20 years. He has lived and operated in multiple countries throughout his career. Tim holds a bachelor of science from the University of Sydney, and has dual Australian and British citizenship.

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Duncan MacIntosh Duncan is co-head for MSI GEO Services and is co-founder of ShieldGEO. He has has over 13 years’ experience in this field, and providing organizations with management solutions around the world. These include outsourced payroll, PEO, contractor management, work permit, taxation, human resource, coemployment, employee leasing, and taxation services. Duncan is responsible for international business development, sales, marketing, and client and partner management. Duncan believes that as the world becomes ever more global and the movement of labor across borders increasingly common, organizations require companies that can make the process simpler and more manageable. He understands that this is a difficult task, and that sourcing clear, simple advice and solutions in each country is of paramount importance. Over the years, his experience with a range of suppliers has demonstrated that those providing expert advice and solutions in each specific country were worth their weight in gold. This led him to set up Contractor Taxation, with co-founder Tim Burgess, to provide a single point of contact for companies wishing to access the best providers in each country.

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