New research published in Remote’s 2023 Remote Workforce Report examines how the rise of distributed remote workforces is transforming the operations of businesses globally, as well as the lives of their employees. Remote, a leader in building, managing and supporting global distributed workforces, commissioned the survey of 1,581 HR and business decision makers, employees, and contractors globally.
While debates over remote work rage on, a new class of companies has quietly started to emerge: those building permanently distributed workforces including people from multiple locations (often, multiple countries). The report reveals that businesses who now operate in a distributed working model see significant benefits in talent attraction and retention.
These include:
- 60% of decision makers surveyed say that the number of high-quality applicants per open position has increased since switching to a distributed model.
- A majority of distributed companies (69%) says employee retention has increased, and more than half (57%) say a distributed workforce makes it easier to recruit and retain talent.
- More than half (58%) of respondents who work in-country and 72% of respondents who work distributed internationally say productivity has increased following the introduction of a distributed workforce model.
Respondents noted that while distributed working models lead to some savings, like office space, they were not primarily motivated by short-term cost efficiencies. In fact, while 53% say headcount costs have increased, the data indicates it’s not because of the workers — it’s because businesses are overspending on office space and legal fees to open new entities abroad. Yet more than half (55%) still would rather hire the best person for the job even if they live in a different country, thanks to the significant benefits that distributed work offers.
Commenting on the research, CEO and Co-Founder of Remote, Job van der Voort, said:“This report demonstrates that distributed work is not only life-changing for individuals; it’s a superior operating model for businesses that drives efficiencies, productivity, retention, and quality of hiring pools. With these undeniable competitive advantages, we are already starting to see more distributed companies emerging as leaders in the global economy.”
Decision makers more optimistic about remote work than employees
In the summer of 2022, both employees and employers were confident about the growth of remote work over the next five years. Today, decision makers are still optimistic about the growth of remote work as an enabler for distributed workforces, but employees are less sure. The research shows that two-thirds (66%) of decision-makers believe that distributed workforces will be more common than local-only teams in the future.
Employees are more divided, with 43% saying their company will become more geographically dispersed in the future, while 45% believe their company will become more local. Employees are split largely based on their current circumstances — those who already work fully or partially remotely tend to believe remote work will continue to grow, while their in-office counterparts do not.
Younger generations see bright future for distributed workforces
There is also a significant difference in perspective across generations: 48% of Generation Z, 47% of Millennials and 39% of Generation X say that their company will become more geographically distributed. This compares to only 18% of Boomers who feel the same way.
This perception could be related to the fact that younger generations are generally more open to new working models. In fact, 80% of Generation Z are interested in working in a country other than where their company is headquartered, compared to 74% of Millennials, 61% of Generation X and only 40% of Boomers. Among people belonging to the Baby Boomer generation, more than a fifth (21%) said they don’t see any advantages in being able to work from anywhere, compared to 95% of younger generations. Of Generation Z, 42% would leave their current job for a remote work opportunity.
Keeping distributed teams engaged remains a challenge
While the research shows clear benefits of distributed workforce models, it notes there are still barriers to overcome for businesses and their staff alike. Both groups named “keeping employee engagement high” as one of their top challenges (31% of decision-makers and 34% of employees.) With employee engagement tied to employee experience, this demonstrates the need for distributed employers to ensure their teams feel empowered, supported, and able to thrive in their roles — regardless of where they’re logging in from.