Virtual teams expected to grow: Survey

Cost-cutting, mobile approach works in tough times but HR has a few challenges
By Sarah Dobson
|Canadian HR Reporter|Last Updated: 05/07/2012

Eleven years ago, Gillian Kerr set up a virtual company with no office space and no full-time employees — though she did have some contractors on the payroll. Real World Systems (RWS) did consulting work for the Ontario government, which included work in Qatar.

Face-time is highly valued in the Middle East, said Kerr, who is now a subject matter expert at RWS in Toronto, so she spent most of her days in meetings there. But after hours, she would send all her notes to her team back home — since bringing in skilled talent is so expensive — and by the next day, everything was set up in a document, ready to be presented.

“It was unbelievably efficient,” she said.

With a tough economy and an accompanying focus on cost-cutting, more than one-half (57 per cent) of companies are planning on using more virtual teams — defined as “employees from different functions of an organization distributed across disparate locations and between companies” — according to a survey by Chronos Consulting in Houston.

At present, 23 per cent of the 83 respondents in the United States and Canada use virtual teams while 44 per cent use a combination of virtual teams, outsourcing and contractors.

And almost three-quarters (72 per cent) said they do so because of cost savings.

“A lot of (employers) are starting to use virtual teams, primarily from the perspective of cost-cutting, because of the downsizing we’ve been seeing for last two or three years, pretty much globally,” said ImaadMahfooz, managing principal of Chronos.

By hiring workers in less costly markets, there are lower labour costs, benefits administration, travel expenses, real estate costs and taxes, he said.

Kerr definitely saw very low overhead with her virtual company, as the only location expense was telecommunications.

“One of the advantages is we got very skilled at moving in quickly and working with people from almost any location, and we got to pull in people who were terrific team members and it didn’t matter where they were located.”

Multinational organizations growing rapidly in emerging markets such as China and Brazil also explain the rising interest in virtual teams, found Chronos, along with a global abundance of talent, demand for new skill sets, a more distributed and diverse workforce and more project-oriented work.

And then there are the newer technologies.

“Because of enabling technologies through web access, through Skype, through virtual conferencing, it’s become a lot easier to conduct business virtually,” said Mahfooz. “So technologies are expediting the enablement and utilization of virtual teams.”

There are plenty of business drivers for virtual teams, said Jon Wagner, president of VirtualeTeams in Brechin, Ont., such as time savings, greater productivity and innovation, faster decision-making, improved employee satisfaction and reduced turnover.

HR faces a few challenges

However, the use of virtual teams can pose challenges for HR. One-third of respondents to the survey said HR has to do more work with virtual teams while 28 per cent said there’s less work and 34 per cent said it’s the same. The top three challenges for HR are: the need for additional training or guidance; communication issues (especially cross-cultural); and time zone and distance issues.

It’s a balancing act for HR in managing budgets and ensuring the sustainability and growth of their companies, said Mahfooz.

“It’s tricky because it’s got some huge upside potential but it could also, quite frankly, come back to bite a company.”

HR’s role in building and supporting virtual teams is extensive, said Wagner. It includes selecting the right people, understanding the skills and capabilities required in this environment, enabling policies and procedures, providing shared work spaces and working with other departments such as IT and operations.

“HR has such a role in all this,” he said.

Take it slow, get it right

Considering the various challenges, it’s a good idea to approach virtual teams in a scalable, proof-of-concept pilot fashion, said Mahfooz.

“Start off small, do this in one area, utilize it, see the benefits, take the lessons learned and then incorporate them and scale up as needed.”

There are more than a few ways to ensure virtual teams work out, according to Kerr. For one, check to make sure team members understand what is being asked of them. Not being able to see faces and check in with people at a cubicle can make for a narrower bandwidth of communication, she said.

“It’s a bit more formal process to make sure you’re really understanding them,” said Kerr. “If you work virtually, every person in the team has to take responsibility for understanding and being understood.”

In addition, everyone should meet virtually, if possible, so no one is at a disadvantage. It’s also important for managers to have separate phone conversations with team members outside of conference calls, said Kerr, to mimic casual conversations in an office hallway.

“In group meetings, there’s so much posturing and power stuff going on, it’s often not a great place to get the conversations.”

And with large, complicated projects, it’s important to have short-term deliverables by checking in to make sure everyone is on track, instead of wasting six months by being off-base.

“To make a large project successful often takes a ton of management and co-ordination which is very expensive and it’s not very good for virtual teams,” she said. “The approach you want to take is to decompose the project into small modules that can be handled by teams of one to three people.”

There are several commonalities or differentiators that make for a strong virtual team, according to Wagner. These include:

• having a shared purpose or vision the team clearly understands

• developing measurable accountability and deliverables

• building and maintaining trust

• providing timely feedback

• making cultural diversity an advantage

• developing team norms and operating agreements

• making the technology work collaboratively.

Systematic, effective communication is also crucial, he said.

“Team members need to have an easy way of passing information in an organized way,” he said. “If they don’t, how do you share information on a timely basis?”

Also important is orienting new team members, especially those who may be working alone.

“When you onboard a new member of a virtual team, they can’t just walk around and shake hands. You have to be very systematic about, ‘How do we bring this person on and help them feel part of the team and not just an isolated person?’” said Wagner.

However, virtual teams are not for everyone, he said.

“There are some people who could not work effectively in that environment. Like anything else, it’s a skill,” he said.

You just can’t predict who’s going to excel, said Kerr.

“We’d hire experienced consultants, the resumé looks wonderful, people think they’re great, and they couldn’t do one simple project virtually. They couldn’t feel grounded if they weren’t seeing people, they couldn’t manage their time.”

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