7 Advantages and Disadvantages of Virtual Teams

While remote work has been growing in popularity for years, the Covid 19 pandemic really drove it into the mainstream in record time. Suddenly millions more people around the world were forced to reckon with the wide range of advantages and disadvantages of virtual teams in the workplace. But in the process, a tremendous amount […]

by Dilyan Dimitrov

March 29, 2024

10 min read

Advantages and disadvantages of virtual teams.

While remote work has been growing in popularity for years, the Covid 19 pandemic really drove it into the mainstream in record time. Suddenly millions more people around the world were forced to reckon with the wide range of advantages and disadvantages of virtual teams in the workplace.

But in the process, a tremendous amount was learned. Today, the technology and processes for managing virtual teams are better than they have ever been. But there are still real challenges. For managers, the complex challenges of virtual teams require a rethinking of many old practices.

For members of these virtual teams, this new reality demands a new approach to work that embraces the advantages this style offers. In other words, managers and team members alike need to understand the advantages and disadvantages offered by virtual work and adapt to them.

Challenges of virtual teams

The fundamental challenge presented by virtual teams is that traditionally in-person activities like meetings, team building activities, and even social time in the office are all radically different when done virtually.

For example, a common challenge for virtual teams is communication. This may come from working in different time zones, resulting in precious few hours a day when real-time communication is possible. This may also stem from the differences between virtual and in-person communication, where misunderstandings can easily become more common and building rapport difficult.

Those communication issues tie into another common challenge of virtual teams: collaboration. Working together effectively over distance, let alone in different time zones, simply doesn’t come naturally to most. It requires extra effort and coordination that not all managers are ready to provide.

Finally, teams working on projects where security is particularly important may find the challenge of ensuring secure connections from so many locations particularly daunting. But when taking a full view of the unique challenges of virtual teams, effective communication is without a doubt the greatest one in most instances.

7 Advantages of Virtual Teams

While it’s true that many challenges exist for managing virtual teams, the advantages offered are also undeniable.

Advantages and Disadvantages of remote work.

1. You can access talent from anywhere

Perhaps the single most transformative advantage virtual teams have brought organizations around the world is access to a truly global talent pool. This makes it far easier for businesses to access less common skills that may not be sufficiently available where they are located. The flexibility that benefit offers can ensure organizational leaders have more options when it comes to scaling.

For prospective team members, this reality of virtual work likewise increases the number of potential employers by an order of magnitude. On the whole, by globalizing the labor force to a greater extent, virtual work helps improve overall efficiency by matching more of the right people to the right positions.

2. Work trade-offs across time zones can improve productivity

While working in different time zones can certainly be a disadvantage for many teams, in some cases it offers an advantage. 

To understand why, let’s take the example of an important presentation. It’s due at the end of the workday on Friday, but a late addition to the slide deck means the main team won’t have time to complete it. In this case, having some team members in a different time zone can enable work to happen while other team members are off, ensuring everything is done by the deadline.

This and other cases like it can really help limit the delays caused by work handoffs. The key is optimizing your operational processes around these realities, potentially transforming them from disadvantages to advantages.

3. Fewer meetings

When everyone on your team is working together in the same space, the temptation to gather everyone together to discuss or share something can be strong. This often results in far too many meetings that realistically could have just been emails.

The realities of virtual meetings: needing to schedule them in advance, people working from different time zones not being available, the time needed to get everyone set up and ready to go, etc. often help managers and other leaders appreciate the value of minimizing them. As a result, virtual teams tend to have fewer and more focused meetings.

For team members who value focused work time, avoiding all the distractions and context-switching these meetings often bring can be a major boost to productivity. It can also help improve team morale because the meetings you do have feel more productive and important, rather than a waste of time.

Virtual meeting room.

4. Reduced costs

Virtual teams are able to reduce costs in a wide variety of ways. One relates to the first point on this list. By accessing talent in a wider variety of locations, organizations are more likely to find the right candidate for a lower salary. Of course this doesn’t necessarily mean the team members lose out because again, they can also access higher paid positions outside of their geographic area.

Fully virtual teams also carry huge savings by avoiding the need to invest in a physical office space. Sure in some instances organizations may help finance the purchase of home office equipment like monitors or chairs, but this is usually a far cry from what’s needed to finance a physical office.

Not needing to commute to that office can also in effect reduce costs by giving virtual team members greater flexibility and simply more time to get important work done. The improved retention (discussed in greater detail below) that virtual teams offer also translates into major cost savings. 

5. Improved flexibility

As we just alluded to, virtual work generally offers far better flexibility for employees and employers alike. From making it easier to do a load of laundry in the afternoon to the aforementioned ability to hire globally, removing work from a single physical location makes that work far more flexible.

Not needing to work from an office also means employees can work from other locations if needed. Let’s say they have to take care of a sick child or family member, they still may be able to do their job without necessarily needing to take days off to handle that task if they would prefer not to.

Virtual work also enables each employee to craft their own ideal work space. Instead of struggling with the reality that everyone in the office may have their own preferred level of noise, temperature, etc. everyone can simply set up their workspace in the way that works best for them.

6. Better retention rates

The better work-life balance mentioned in advantage number 5 also has another important benefit: improved retention. Is it any wonder more and more employees are demanding jobs that at least offer hybrid working options if not fully remote ones? The data is clear: employees prefer the flexibility remote and hybrid work offers.

But while offering that flexibility has its costs, as we’ll discuss shortly, improved retention rates come as a massive benefit. Considering the 6-9 months and 1-2x the position’s annual salary that it takes to hire for a position, improving your retention rate even marginally can quickly add up.

Poor retention also affects productivity, as newer employees take time to get used to their position and reach their full potential there. That productivity hit alone costs US businesses an estimated $1.8 trillion per year.

7. Improved scalability

While this has been mentioned under a few other advantages, it’s important enough to warrant its own point. When it comes to scalability, not only does working with virtual teams enable you to hire talent more easily, they also make it easier to move team members when needed.

For example, if you want to move some programmers based in one city to a new team, instead of needing them to physically relocate they can simply join that team and work virtually. This added flexibility makes it easier to scale both as an organization and to scale up individual teams or projects far more easily.

7 Disadvantages of Virtual Teams

Even with the combined weight of all those advantages, the disadvantages of virtual working are still substantial and worth investigating. These are the top 7 that you should keep an eye out for.

Advantages vs disadvantages of remote work.

1. Difficulty building a culture

So many of the most common management challenges can be traced back to one single root cause: bad cultures. A poor working culture can take even the most capable or promising team members and sap them of their potential. But when it comes to building a culture that does the opposite, virtual work presents unique challenges.

First is that a lot of culture building comes down to simply seeing what others are doing. When not working together in a physical office, that happens far less often. Absent this kind of guidance, team members can easily drift and fail to integrate into any coherent culture at all, hurting productivity and even retention.

2. Potential inefficiencies

The challenges presented by time zones were mentioned previously, but these kinds of issues present major issues for virtual teams. Often, poor marketing operations and processes will leave team members blocked on work because they lack information on prioritization or simply information they need to complete a task.

The result is hours of wasted time alongside frustration as people wait helplessly to get what they need to complete their work. For new hires, things can be even more difficult as it may prove more difficult to learn who does what, meaning they may not even know where to turn when a question has them blocked on their work.

3. Increased technological costs

It should come as no surprise that virtual teams are particularly reliant on software for nearly everything they do. This can translate into higher costs for developing custom software, or simply using off-the-shelf solutions for things like video conferencing, cloud computing, or extra security features.

These costs can also come from purchasing physical technology like laptops, cameras, monitors, etc. to ensure team members can meet, discuss, and work effectively from a distance.

4. Security risks

The reality is that when all employees access your company’s digital assets from company computers in the company’s office, it’s far easier to ensure the security of those systems. There are simply fewer variables your security teams need to worry about. 

But virtual work means more people accessing sensitive information from more places using more devices. This poses enormous challenges for making sure sensitive information is kept secure. That said, there are software solutions designed to help mitigate these risks through practices like two-factor authentication and end-to-end encryption, but you need to work to ensure these are set up and properly used.

5. Difficulties managing people

Managing virtual teams requires a completely different approach to managing in-person teams. You may have a manager who excels at bringing their team together and getting them to operate effectively in an office only to see them flounder when trying to do the same thing remotely.

Effective virtual team management requires shifting from traditional command-and-control styles of management to more modern ideas of servant leadership. Here, managers focus more on empowering team members, giving them the information, tools, and other support they need and then trusting them to get the job done.

6. Reduced collaboration

The best teams out there are made up of individuals who together are greater than the sum of their parts because of how they collaborate. But it’s easy to neglect collaboration when actually working together requires extra steps like setting up a Zoom call. 

Individuals can end up feeling and acting isolated simply because they worry about bothering their coworkers because they can’t easily see whether they’re in deep-work mode or might be up for discussing a project. Losing these visual cues along with the challenges of building a collaboration-focused culture make this a major challenge for virtual teams.

Reduced collaboration

7. Legal complications

While the ability to hire people from around the world is a major asset for virtual teams, that capability also brings its own complications. Often, hiring team members in various locations means having to navigate local labor, tax, and other laws. Doing this once can be difficult, but multiply it by several or even dozens of team members and your organization’s legal department can quickly find themselves overwhelmed.

This challenge can be alleviated by hiring people as freelancers or private contractors, but even those relationships can require some legal work to set up.

How to Improve Remote Employees Management

With all of these advantages and disadvantages of virtual teams understood, what can you do to lean into the advantages and alleviate the disadvantages?

Provide Managers with the Right Training

Start with managers. It’s vital to ensure the people managing virtual teams are knowledgeable about the unique challenges they can expect. For example, you may want to offer training or coaching around topics like servant leadership, building an effective remote culture, and optimizing processes around remote work.

Effective management will help build effective cultures and effective cultures will get you most of the way towards the kind of virtual team performance you want. In fact, this investment in managers alone should help address more than half of the disadvantages listed here, highlighting why it’s so vital.

Consider Agile Methodologies

One effective way of encouraging virtual team members to be more autonomous, proactive, and empowered is by using Agile methodologies like Scrum, Kanban, or a hybrid approach. The Agile principles behind these methods are an excellent way to build the right kind of team culture and mindset that really drives effective virtual teams.

The kinds of visualization tools that these Agile approaches utilize are also excellent for virtual teams. They enable team members to quickly see what’s happening at a glance while providing a single place to keep all the important information required to complete a task. This helps prevent the kind of blockages that can often translate into costly delays.

Don’t Forget About Other Departments

Next, ensure you build alignment and visibility for your organization’s security and legal teams. Their input on how you go about building and using virtual teams shouldn’t be an afterthought. After all, you don’t want to find some fantastic hires only to later learn that their location means dramatically higher costs or security risks.

Don’t Forget Why You’re Going Virtual

Lastly, it’s important to be clear-eyed about why you want to use virtual teams in the first place. If your reasons are more about cost-savings, then you should build your remote employee management strategy around optimizing for that factor. If it’s about productivity or scalability, you should likewise ensure every step of building and managing your teams is focused around achieving those objectives.

A reader who loves writing, a marketer who loves tech, a nerd who loves sports. Dilyan, our resident writer, half-jokes that his days are filled with everything you can think of - except free time. He joined our team several years into his copywriting career - and he seems to feel at home here. Because, as he puts it, “there’s always cake at the office”.  If he doesn’t have his nose buried in a book, you can typically find Dilyan writing his latest piece, tinkering with his PC, or off swimming/cycling somewhere.