MaRS Library Virtual teams: Benefits and disadvantages
Read the highlights
- Virtual teams have inherent benefits and disadvantages—navigating these can enable startups to provide top services while remaining flexible and responsive to customer needs.
- Benefits include affordable expertise (particularly with HR, finance, marketing), flexible support, and access to a full suite of services.
- Disadvantages include challenges with virtual teams can lie in communication, poor leadership/management and incompetent team members.
A virtual team is a collection of independently employed individuals who work together to provide business solutions to external clients. For startups, using virtual teams can be a way to provide top products and services while remaining flexible for customers and responsive to their needs. Yet startups need to be aware of the benefits and disadvantages of virtual teams.
The context for virtual teams
Organizations that deliver the services of a virtual team hire the most suitably qualified people available, with varying levels and areas of experience. This framework can be complemented by hiring virtual employees in multiple geographic locations to support customers from different regions.
A virtual team will typically include members who work primarily from home and may have a small centralized office where meetings and group projects can be planned and implemented.
In the area of human resources, there are many disciplines that require specific skills, training and experience, including:
- Training and development
- Performance management
- Employee relations
- Industrial relations for unionized organizations
- Executive coaching and leadership
Often, the challenge for startups and other small companies is having the resources to hire an employee with as much of this expertise as possible at the lowest possible investment. Finding all of this in one individual at the experience level required can be daunting. The virtual team can provide the answer in fields such as human resources, finance and marketing.
Virtual teams: Benefits
Virtual teams are growing in popularity for a number of reasons, including the following benefits:
- Affordability: With virtual teams, companies pay:
- Only for the level of support that they require
- Much lower costs than they would for professional consulting organizations and headhunters that have large infrastructures and professional fees to support
- No overhead costs for the associated services (e.g., computer, office space, communication between virtual and in-house staff, benefits)
- Flexible support: Companies identify the requirements (e.g., junior recruiter, senior compensation analyst) and virtual teams fill the need. Companies can set the length of the service according to their needs
- Full suite of services: Virtual teams offer access to multiple disciplines in different geographic regions
Virtual teams: Disadvantages
Understanding the disadvantages that are inherent in virtual teams can enable the combined team (i.e., your staff and the virtual team) to become more successful and efficient, particularly by avoiding the many mistakes that can lead to failure. These challenges can lie in the areas of:
- Communication: Not working in the same physical location can present communication challenges—leverage technology to reduce this problem (e.g., video conferencing, project management software, phone discussions, detailed email updates)
- Poor leadership or management: It is essential that the leader of a virtual team have the ability to manage many initiatives and virtual employees while providing a clear vision for the team
- Incompetent team members: One weak team member can adversely affect the virtual team concept. Recruiting the right team members plays a critical role in the success of the virtual team
Implement virtual teams effectively and net the benefits
If implemented effectively, a virtual team nets many benefits for your startup and can be the ideal solution for many of the business needs of a small organization. While a new field, organizations that deliver these types of business services are finding themselves in an innovative and growing niche.
Summary: Using virtual teams has inherent benefits and disadvantages; successfully navigating these can enable startups to provide top products and services while remaining flexible and responsive to customer needs.
- Designing sales compensation plans for your startup.
- How to incorporate competencies in your startup’s recruitment process.
- Case study: Craigslist—Product design with customers in mind.
- Offer of employment and employment contracts: What startups need to know.
- The Pay Equity Act: Pay equity legislation and Ontario startups.