Lessons from Running a Virtual Company
Before the pandemic shutdown in March 2020, when I told anyone I ran a virtual company, they almost always declared how their office could never operate virtually, implying that our remote status made us less of a “real” company. I suspect today that many of those same people not only can now imagine their company going virtual but, in fact, hope to work remotely themselves.
More than 15 years ago, my company opened as a virtual office by necessity—my business partner and I lived in different cities—but we have never regretted our decision. We are in a small, service-oriented industry and have grown from a two-person operation to remotely managing more than 30 employees in nine states. A virtual office might not work for everyone, but it fits our needs and can work for a lot of companies that are now weighing the pros and cons of someday returning to a brick-and-mortar existence.
Why go virtual?
There is no shortage of articles about the financial costs and benefits of traditional brick-and-mortar companies—a shared physical space is still the norm for most businesses. Finding information about the advantages and “how-tos” of virtual offices can be more difficult. As someone who has started and grown a successful business in a virtual setting for more than 15 years, here is what I have identified as some of the gains awaiting a virtual office and workforce:
- It’s less expensive to operate in a virtual setting, allowing us to pass savings on to customers and employees. Reducing overhead costs is the most obvious argument for going virtual. Most recognize the impact of rent and utility expenses, but custodial costs are no less real, not to mention items such as coffee, snacks, decorations and the like that add up over time. As a matter of logic and fact, avoiding substantial overhead expenses can be the difference between survival and closure of a new business. But even well-established companies see meaningful benefits from reducing unnecessary costs. When facility expenses are removed, savings can result in more competitive pricing for customers and better compensation for valued staff, with funds left over for increased profitability, as well. At our company, customers know they are being charged fair prices, and our staff appreciate (and stick around because of) the savings that we put into salaries, bonuses, and charitable giving benefits. Everyone wins from this type of facility cost avoidance.
- There are fewer staff conflicts. One somewhat surprising byproduct of a virtual office is a lack of employee disagreements. When your people are not physically with each other each day, there isn’t an opportunity to get upset about little things like a yogurt missing from the fridge or no one ever refilling the printer paper. This is not to say there are never any employee conflicts, but staff members tend to focus on their work rather than personality conflicts—and what employer doesn’t want that? If anything, our challenge is to be diligent about encouraging meaningful interaction among staff to foster the healthy relationships needed to promote collaboration and collegiality.
- Your hiring pool expands exponentially. Enlarging our hiring pool beyond the geographic footprint of a physical region is a huge and, admittedly, unanticipated benefit of our virtual organization. In fact, when it comes to selecting staff, the world is our oyster—while most brick-and-mortar facilities are limited to candidates within a reasonable proximity/commute to the work site. We must acknowledge that the interview process—in which we may offer someone an important job without ever shaking their hand—requires some getting used to, but in our experience more and more professional candidates see online interviewing as the norm rather than the exception. An added bonus: Our new hires never ask about moving costs.
- Freedom from a physical office supports an employee’s “whole person.” Being a virtual company is more than just checking off the box that allows your employees to work from home. It is about creating a culture that enables our business to flourish, yet simultaneously offers the flexibility needed for our staff to manage a reasonable work-life balance. When we started our company, my business partner and I each had small children and wanted to take them to school and attend their extracurricular events, as well as lower our commuting stress and generally free ourselves from some of the drudgeries of office life (dry cleaning, eating out, etc.). If we wanted such a culture for ourselves, why wouldn’t we also want that for our employees if we could help it? Well, we could help it and did, and our staff retention rate shows that the team appreciates it. Note, however, that if working in such a climate doesn’t start at the top, it won’t work. Employees will never relax or take advantage of a flexible work culture if they are worried the boss won’t understand if they aren’t at their desk when the phone rings. The leader (who is more than a boss) often sets the tone for a work culture, and this doesn’t change in a virtual setting.
How to make it happen
As you can imagine, operating in a virtual setting isn’t as easy as just telling your employees to start working from home. Strategies we’ve employed and lessons we’ve learned include:
- Hire good staff, then trust them. Sure, this should be the way any company operates, but trust issues really come into play when you can’t see your staff working on a moment-by-moment basis. Our position is that if you hire people you can’t trust to work from home without being monitored, then it is likely that a virtual office isn’t realistic for your company (and we might argue, you hire the wrong people). Trust means not having to use tracking software to ensure that your staff are getting the job done. Trust means engaging your people in meaningful work so that they know that their efforts are about making a difference rather than just completing a timesheet. Trust means giving staff a voice in the company’s decisions and choices. Does this mean trust always works? No, but the return on your investment in staff is much higher when there is trust. It also makes work more meaningful and life more worthwhile to have colleagues who are people you trust rather than just strangers who work for you.
- Use tools to foster communication and collaboration. One of the biggest perceived concerns about a virtual company is the barriers to collaboration that might arise when people aren’t literally sitting around the same table to take on a task. One of the (admittedly few) silver linings of the pandemic is that everyone pretty much now knows that staff can collaborate just as well in remote settings as long as they have access to the right tools. Like any company—virtual or not—we use shared drives and calendars, as well as online project and task management tools, to accomplish our duties. We also rely on instant messaging and community software to ensure open lines of communications (even though we trust, and encourage, our team to turn them off when they are heads down on a task).
- Do a good job explaining to potential staff how a virtual company works. Not all job applicants will understand what it means to work for a virtual company. We have had candidates withdraw job applications after considering the likelihood of them being happy and successful working from home—we understand, it is okay, and we are thankful that they figured it out before they accepted a position. The hiring process should describe your company to potential employees, and we’ve found it especially important to explain how we operate virtually with folks given that not everyone is inherently familiar with the details of working for a virtual company. The most frequent question we get asked during interviews is what a typical day looks like and how employees communicate and collaborate with each other. Being able to respond accurately helps us hire people who will succeed in our environment.
- Lean in. Whether running a virtual or brick-and-mortar office, the bottom line is still the bottom line, and we lean into running a business just like any other successful business owners must. But establishing a climate that supports the bottom line and the staff can also work. We lean into that, as well. We love our virtual setting and continuously search for ways to improve it. As such, we actively remind our people that it is okay to take a break to walk their dog—10 minutes of exercise is good for them, their dog, and their outlook when they get back to the job (and no different than 10 minutes chatting around the proverbial water cooler). We encourage this virtual culture in team meetings, on calls, and in written employee policies, all so that it is evident that we mean it—and, for good measure, our management team models this behavior, as well, just to be clear that it is accepted and expected.
Running a virtual company isn’t always easy, but neither is running a brick-and-mortar office. As more and more Americans gained experience working at home during the pandemic, I sense that the idea of remote work is better understood than it used to be. A virtual office may not be appropriate for every industry, company, leader, or employee—but our experience shows that a virtual setting significantly reduces costs and creates savings for clients and the company, increases the talent pool for hiring, reduces staff conflict, and enables a work-life balance that helps us retain a group of hard-working people who truly value the flexibility and opportunities offered by our virtual company home.