Difference Between Remote and Distributed Teams and How They Work

Explore the nuances of remote and distributed teams – understand the dynamics, challenges, and benefits. Discover effective collaboration beyond physical offices.

January 27, 2024

Remote vs distributed teams differences
Shashank Kothari
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The landscape of modern work is constantly evolving. Gone are the days of a one-size-fits-all approach to office life. Today, we see different work settings - distributed, remote, hybrid teams, etc. Forget the old-school notion of everyone clocking in at the same office – now we have teams spanning the globe or working from their homes.

Distributed teams are the jet-setters of collaboration, scattered worldwide, operating without a central hub. The team does not necessarily have headquarters they are working for. Meanwhile, in remote teams, most team members have a central office where they must work full-time or part-time. This office is most of the time where the leaders are working from. That is where they stay to oversee the affairs of the company.

Understanding the difference between distributed teams and remote teams is essential if you are a CEO looking to optimize your workforce and adapt to the changing work sector. It is also crucial for employees to be sure of what they are up for. Here, we will explore the differences between remote and distributed teams, discuss their unique characteristics, and highlight the importance of communication and best practices for each approach.

What Is Remote Work?

Remote work, also known as telecommuting, is the practice of employees performing their job duties from a location other than a central office operated by the employer. This arrangement allows you to work from any setting, such as your home, co-working spaces, or other remote locations, using digital tools like Google Docs and Skype to communicate and collaborate with your teams. 

According to a Gallup poll, 56% of workers work remotely all or part of the time, which is expected to continue. The rise of cloud technologies like Amazon Web Services (AWS), Microsoft Azure, Google Cloud Platform (GCP), etc., and improved communication tools has facilitated the widespread adoption of remote work, offering benefits such as better work-life balance, higher productivity, and cost savings for both employees and employers.

To effectively manage remote teams, it is essential to establish some practices, such as setting up virtual introductory calls, providing the necessary support and tools for remote hires, like Slack and Microsoft Teams, and maintaining regular communication to ensure their inclusion and success. Also, adapting management styles to accommodate remote work and leveraging team-tracking solutions like Toggl and Asana can help enhance productivity and accountability.

So, What Are the Differences Between Remote Teams and Distributed Teams?

Below are the main differences between remote teams and distributed teams:

  1. Remote teams include workers who choose to work outside of a company’s office space. While distributed teams have members located in different parts of the world.
  2. Remote is a blend of onsite and offsite teams. One or more members work at an onsite facility others can work remotely, but they must all meet once in a while at the central hub. Distributed teams do not operate from a central location, everything is done remotely, and they never have to meet physically.
  3. Remote team members must be close to the central hub since they must meet occasionally. Distributed team members don't have to stay close. You can have a Marketing Manager living in India overseeing a Content Editor who lives in Croatia.

What Is a Remote Team?

A remote team is a group of employees who primarily work from home or other remote locations that stay around and communicate with the company via digital mediums such as email, telephone, or video conferencing. Sometimes, they may be required to come to the office once in a while. Remote teams are not centered in one physical location. 

Check out Automattic, the company behind WordPress, which is big on remote teams. According to them, their remote teams must meet once or twice a year and work together. This is the main difference between a remote and distributed team: the latter do not need to meet for any reason. 

Pros and Cons of Remote Teams

Many companies are already embracing remote because it has many advantages. It also has some disadvantages. 

Pros of Remote Teams

Benefits of remote teams to employees and employers.
Benefits of remote teams to employees and employers. Source: Actitime

There are many benefits of a remote team, some of them are:

  • Better work-life balance. Remote teams allow you to get more flexibility in managing personal and professional responsibilities. This will lead to improved work-life balance.
  • Higher productivity. Many studies have shown that remote workers often experience increased productivity. For example, a University of Chicago research paper found that, on average, remote work productivity was over 7% higher than in-office productivity. This is attributed to fewer workplace distractions and the ability to work during their most productive hours.
  • Cost savings. For businesses, remote teams can lead to significant cost savings on office space, utilities, and other overhead expenses.
  • Flexibility. Remote teams offer the freedom to work from any location, not just limited to home, which leads to increased job satisfaction and reduced commuting stress.
  • Improved inclusivity. Remote teams help companies embrace diversity and inclusion by hiring people from different geographic and cultural backgrounds. This leads to a more diverse and global workforce.
  • Performance and engagement. Studies like this one, published in the Journal of Business and Psychology, have shown that remote teams exhibit more robust autonomy and higher engagement, leading to improved performance and quality of work.
  • Retention and profitability. A remote team contributes to higher employee retention and profitability, with organizations saving on average $11,000 per year per part-time telecommuter.

Cons of Remote Teams

 Drawbacks of remote teams.
Drawbacks of remote teams. Source: Bordio

The cons of remote teams include the following:

  • Social isolation. Being in a remote team can lead to feelings of loneliness and isolation. This is especially true if you are an extrovert who thrives on social interactions.
  • Distractions at home. Working from home has many distractions, such as household noise, family interruptions, and difficulty separating work and personal life, impacting focus and productivity.
  • Tribal knowledge and lack of documentation. Being in a remote team can result in a lack of access to informal information and knowledge sharing in traditional office settings. This can lead to challenges in understanding company culture and processes.
  • Higher rates of depression. Research like this one that SHRM reports has shown that remote workers tend to experience higher rates of mental health issues, such as depression, due to factors like constant interruptions, difficulty in balancing work and family responsibilities and feeling disconnected from colleagues.
  • Limited work environment distinctions. The lack of physical separation between work and personal space can lead to difficulties in establishing boundaries. This can potentially cause work-related stress to spill over into personal time.

What Is a Distributed Team?

Distributed teams involve people working together from different geographical locations rather than at a centralized office. Each team member operates remotely, using technologies like messaging apps and file-sharing platforms to collaborate. This setup offers flexibility, allowing you to contribute from various places. Communication relies heavily on digital tools like video calls and messaging. Unlike remote teams, distributed teams do not have a central hub where they may meet. This means that everything is done from remote locations. The team can come from different locations around the world – Asia, America, Africa, etc. – all in one team, aiming for the same goal. Compared to most remote teams that require their members to stay around the central office.

While it provides freedom, challenges can arise due to time zone differences and potential miscommunication. Successful collaboration in distributed teams demands effective use of technology, clear objectives, and strong communication skills. Adaptation and embracing virtual collaboration tools are crucial for productivity and cohesion in this work model.

Pros and Cons of Distributed Teams

Just like remote, distributed teams have a lot of benefits and drawbacks. Most of these pros and cons are the same. For example, both offer flexibility, cost savings on office space, etc. However, both can lead to social isolation, and members can get distracted at home.  Below are some standout pros and cons of distributed teams:

Pros of Distributed Teams

 Benefits of remote teams to employees and employers.‍
Benefits of distributed teams to employees and employers. Source: Actitime
  • Better talent accessibility. Distributed teams open the door for talent from diverse backgrounds, knowledge, and experiences. This brings different ideas and ways of thinking to the table. A McKinsey and Company study found that companies with higher ethnic and racial diversity had a 35% increase in financial performance. This shows that it has better talent accessibility.
  • Boosted creativity. Distributed teams result from diverse perspectives and ideas from team members in different locations. The varied backgrounds and experiences contribute to innovative problem-solving and unique solutions, fostering a rich, creative environment. This diversity enhances the team's ability to tackle challenges with fresh and imaginative approaches.
  • Diverse perspectives. Distributed teams have members from different backgrounds and locations. This diversity fosters a range of viewpoints, ideas, and approaches, enriching problem-solving and creativity. By incorporating varied experiences, the team can make well-informed decisions and generate innovative solutions, contributing to overall success and adaptability.

Cons of Distributed Teams

  • Communication challenges. This arises due to the physical separation of team members. Without face-to-face interaction, there can be delays or misunderstandings in conveying information. Overcoming time zone differences, reliance on digital tools, and potential for misinterpretation can hinder seamless communication, impacting collaboration and cohesion within the team.
  • Time zone differences. In distributed teams, coordinating work across varying global time zones is challenging. Scheduling meetings, collaboration, and timely communication become complex, potentially leading to delays and difficulties in real-time interaction. This obstacle can hinder the smooth flow of work and hinder team coordination.
  • Team cohesion. This is the difficulty of building strong interpersonal relationships when team members are physically distant. Limited face-to-face interaction may lead to a sense of isolation, impacting trust, collaboration, and the overall sense of unity within the team, potentially affecting productivity and morale.

How to Manage Remote and Distributed Teams Effectively

For a CEO, managing remote and distributed teams requires different techniques. Here's how to manage both teams effectively:

How to Manage Remote Teams Effectively

How to effectively manage your remote team.‍
The best ways to manage your remote team effectively. Source: ClarionTech

1. Foster Shared Leadership

Encourage shared leadership within the team to improve creativity and innovation. According to a study by Deloitte, companies with shared leadership are 1.5 times more likely to be innovative. This goes to show how crucial this is.

2. Make Use of the Best Communication Practices

Prioritize communication to ensure all team members are working efficiently. Also, leveraging telecommunication technologies to stay connected and work together. A study by Buffer found that 98% of remote workers prefer to communicate with their team via video conferencing. So, this shows that video conferencing is one of the best communication practices - make use of it.

3. Set Clear Expectations

Establish clear goals, responsibilities, and performance metrics for each team member to ensure everyone is aligned and accountable. Also, offer some kind of feedback on the goals or responsibilities you set. This is because a study by Gallup found that employees who receive regular feedback and goal-setting are 3.5 times more likely to be engaged at work.

4. Build a Strong Team Culture

A study by Harvard Business Review found that remote workers who feel connected to their colleagues are likelier to report high job satisfaction. So, how can you make your remote team connect more? Prioritize team bonding activities like remote cooking or baking classes and online board games or card games. Also, conduct regular check-ins to foster camaraderie and collaboration. 

5. Respect Work-Life Balance

Encourage work-life balance and maintain a healthy work-life balance to prevent burnout and maintain well-being. You can do this by setting clear boundaries for work hours and encouraging regular breaks and time away from screens. A study by Owl Labs found that remote workers who feel supported in their work-life balance are 29% more likely to be happy in their jobs. A happy employee is a productive employee.

How to Manage Distributed Teams Effectively

How to effectively manage your distributed team.‍
The best ways to manage your distributed team effectively. Source: Miro

1. Implement End-to-End Spend Management

End-to-end spend management is a process that enables companies to manage expenses from start to finish, including procurement, invoicing, and payment. It helps distributed teams by providing real-time reporting, approval automation, and data insights to authorized users, ensuring reduced processing costs, higher employee productivity, and greater compliance with T&E policies

You can keep up with your company's decentralized teams by implementing end-to-end spend management tools like Coupa, SAP Concur, Oracle Fusion Cloud, etc. This allows your employees to access corporate funds while offering greater control and visibility over spending.

2. Prioritize Communication and Collaboration

This is crucial for maintaining team cohesion and productivity. To achieve this, you can implement strategies such as having a sophisticated onboarding process, using the right tools, scheduling regular meetings, establishing clear roles and expectations, practicing asynchronous collaboration, capitalizing on synchronous meetings, and training managers. 

According to a study by Harvard Business Review, effective communication is the most crucial factor in a successful distributed team. When you prioritize communication and collaboration, you will overcome the challenges of managing distributed teams and improve overall performance, engagement, and job satisfaction.

3. Encourage Autonomy and Productivity

When you encourage autonomy and productivity in distributed teams, you maintain team cohesion. Working from home increases productivity by 13%, highlighting the potential for increased efficiency within distributed teams. To achieve this, you can implement strategies such as prioritizing asynchronous communication, establishing clear roles and expectations, practicing macro-level management, and providing clear and detailed briefs. 

By prioritizing autonomy and productivity, your company will overcome the challenges of managing distributed teams and improve overall performance, engagement, and job satisfaction.

4. Utilize Clear and Detailed Briefs

Making use of clear and detailed briefs involves providing comprehensive guidance for project or content creation. It ensures all team members understand the objectives and requirements. This practice helps you prevent low-quality output and burnout due to unclear expectations. You can implement this by structuring content briefs, including project background, goals, target audience, and deliverables, and breaking down project briefs into manageable sections to aid comprehension and efficiency.

How to Choose Between Distributed Teams or Remote Teams

As an employer or a freelancer, when you want to choose between distributed teams and remote teams, consider the following factors:

Nature of the Work

For collaborative projects, distributed teams are suitable. In contrast, remote teams work well for tasks requiring focus and little interaction.

Team Model and Work Dynamics

Determine what team model will support the objective you want to achieve and how members will work together, and from where they will work.

Business Culture and Growth

Consider which option best suits your business culture and how the option you choose will help your business grow. For example, a global tech company emphasizing diversity and innovation suits distributed teams. A  regional marketing agency emphasizing collaboration and client-centric solutions suits remote teams.

Project Management and Leadership

Evaluate how you will manage projects and/or workers, who you need in leadership roles, and how you will communicate.

Access to Talent and Reduced Costs

Distributed teams offer increased access to talent and reduced costs, while remote teams provide increased flexibility for employees.

Communication and Collaboration

Distributed teams require proper systems and tools to ensure everyone works efficiently, and frequent meetings to maintain progress on projects and enhance collaboration.

Project Suitability

Distributed teams are best suited for small, creative projects, while remote teams work well for large projects that allow members to work remotely, such as programming, software/product development, engineering, or marketing functions.

Trends and Future of Work

The future of work is leaning towards distributed teams, with a rise in fully remote workers and the distributed workforce model being reported as one of the biggest work trends.

Be careful when you are considering these factors. You can make an informed decision on whether to opt for a distributed or remote team based on your specific needs.

The Future of Work: Remote or Distributed?

The future of work is rapidly changing, with remote and distributed teams becoming increasingly popular. According to a study by Upwork, approximately 22% of the workforce will work remotely by 2025. The pandemic accelerated this trend, with up to 25% more workers than previously working remotely. Remote work offers unique opportunities for businesses, including cost savings, increased access to talent, and greater flexibility for employees.

Distributed teams, on the other hand, are best suited for small, creative projects. In contrast, remote teams work well for large projects that allow members to work remotely, such as programming, software/product development, engineering, or marketing functions. The shift to remote work has significantly impacted work culture, challenging traditional norms and encouraging more flexible, results-driven approaches. 

As the future of work unfolds, you must adapt your management styles and communication methods to cater to a distributed or remote workforce. The future of work will likely be a hybrid model. This will allow employees to work both in the office and remotely. By embracing remote and distributed teams, businesses can stay ahead of the curve and reap the benefits of a more flexible and diverse workforce.

Shashank Kothari
F4P Contributor

My goal is to empower readers with insightful blogs that explore future trends, provide practical guidance, and spark curiosity. Together, let's navigate the path to personal and professional growth in an ever-changing world.

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