Distributed vs Remote Teams: What's the difference?

published on 19 July 2023

The traditional office environment has experienced a profound transformation. The onset of technological advancements and the recent global health crisis has accelerated a shift towards more flexible work arrangements. In fact, studies predict that by 2025, nearly 22% of the American workforce will be working remotely—an 87% increase from pre-pandemic times.

With fewer people working from a main office, we have to consider if modern accounting firms need to have an office at all and if this is an opportunity for businesses to leverage hiring employees from other countries.

This brings us to the concept of distributed teams, a new way of working that's taking shape for the next generation.

Understanding distributed teams

Distributed teams are groups of people working together from many different places. These could be different cities, time zones, or even countries. The team might be made up of full-time workers, freelancers, contract workers, or outsourced accountants like a freelance accountant from Europe or an outsourced accountant from Asia. Everyone on the team shares the same goal.

One of the best things about this kind of team is that you can find and work with talented people from anywhere in the world. This means more diversity and more ideas. It can also save money because you don't need a big office for everyone. Plus, people often enjoy the flexibility and freedom to work from where they want, which can lead to more happiness and productivity.

On the other hand, this kind of team can be difficult to manage. When people work in different time zones or speak different languages, communication can be a challenge. It can also be harder to build trust when team members can't meet in person. Lastly, sharing sensitive information across different networks can increase the risk of security issues.

What's the difference to remote teams

Although similar, remote and distributed teams differ in key areas, crucial to know before adopting either model.

Physical location: For distributed teams, employees work from different global locations, potentially in various time zones. However, remote teams are those working away from an office, typically closer to each other or the company base, and may even have a hybrid model to occasionally use office space for meetings.

Office space: Distributed teams don't share a common workspace. Each member works from their chosen location, such as home, cafes, or co-working spaces, reducing company overheads. While remote teams also enjoy flexible locations, they often still use a central office for meetings or events and may have mandatory in-office hours.

Team building: Building emotional connections in distributed teams relies heavily on technology. They overcome geographical barriers through virtual team-building activities and regular video calls. Conversely, remote teams, due to proximity, can more easily maintain relationships and a sense of belonging through in-person meetings and company events.

Making the Right Choice

Deciding between distributed and remote teams is not a one-size-fits-all solution, as it is influenced by multiple factors such as:

  • The type of the project and its demands
  • The specialized skills and expertise required
  • The availability and cost of talent
  • The level of collaboration and coordination needed
  • The preference for flexibility and autonomy in work arrangements

Nevertheless, it's crucial to remember that this decision isn't an either-or situation. It's entirely possible to create a combination of both models.

For example, for specialized tasks, you might engage a freelance accountant as part of your distributed team while maintaining a remote team for general accounting responsibilities. This method can allow you to harness the advantages of both models and minimize their individual drawbacks.

Distributed teams provide many benefits for businesses and employees

Reduce overhead costs: One of the most significant benefits of having a distributed team is saving costs on rent, maintenance, and utilities for office spaces, significantly decrease. For example, companies in places with high rent like Manhattan or Chicago can save thousands by shifting to a distributed model.

Saved costs can be redirected towards technology, employee benefits, research and development, marketing, or social responsibility programs.

Access to worldwide talent: Letting organizations hire skilled workers globally without geographical limitations allows accounting and finance firms to hire contractors and freelancers from places with different regulations and benefits. This broadens the diversity and enhances innovation within the company.

Increased agility: A study by Slack Future Forum indicated that remote workers tend to be more productive due to reduced distractions, flexible schedules, saved commuting time, and better work-life balance. Also, the diverse workforce across multiple time zones enables a 24/7 workflow and quicker response to crises or opportunities, beneficial in customer support or emergency scenarios.

How can distributed teams increase productivity?

Research by the Slack Future Forum revealed that productivity tends to be higher amongst remote and distributed workers compared to those based in traditional offices.

The reasons for this productivity boost include:

Better work-life balance: Balancing personal obligations with work duties can reduce stress and improve overall well-being, which can positively influence productivity.

Flexible work hours: Distributed teams often have the liberty to choose their working hours, enabling them to work during their peak productivity periods or when they feel most energized.

Saved commuting time: The time remote employees save from not commuting can be utilized for work tasks or personal growth, which can lead to enhanced efficiency and job satisfaction.

Fewer distractions: Remote work settings provide autonomy to employees, cutting down on interruptions and ambient noise typical in traditional office environments, thereby allowing a better focus on tasks.

Personalized workspaces: Remote employees have the flexibility to tailor their workspaces to their needs, preferences, and comfort, creating an environment more conducive to productivity.

Moreover, the diverse viewpoints and experiences that distributed teams bring from around the world provide an added advantage. This diversity sparks innovation and creative problem-solving, enabling organizations to tackle challenges more effectively and seize new opportunities.

Managing distributed and remote teams effectively

Managing distributed and remote teams requires a different approach than traditional teams. Clear goals, roles, and expectations must be established for each team member. Tools like cloud-based accounting software facilitate collaboration and communication. Regular feedback, recognition, and rewards help motivate and engage team members, fostering a culture of trust, transparency, and accountability.

The main difference between distributed and remote teams lies in their geographical dispersion and organizational affiliation. Distributed teams are spread across different locations and may not belong to the same organization. In contrast, remote teams typically belong to the same organization and may be in the same city or region.

Given the diverse backgrounds of distributed team members, fostering an inclusive environment is critical. For remote teams, maintaining connection and motivation is key. Providing support and resources to cope with remote work challenges can boost team morale and productivity.

Embracing the Future of Work

With the traditional office concept changing, the average employee now works from home for 3.3 days per week when given a flexible schedule. Welcome to the era of distributed teams, a transformative way of operating for the next generation. It's time to navigate this new landscape effectively, keeping the unique benefits and challenges of both distributed and remote teams in mind. After all, embracing this change could unlock untapped potential and pave the way for a future where borders cease to limit business growth and innovation.

    🔗 Kevin Mitchell | LinkedIn
    🔗 Kevin Mitchell | LinkedIn

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