What are Virtual Teams? Definition, Advantages & Disadvantages [Full Guide]

Virtual teams are certainly not hot news. They existed for years, but the pandemic has “unleashed” their potential. Many companies that hadn’t previously considered hiring remote workers had their backs against the wall – they had to either adapt or die.

Not only did remote work emerge – companies that have offered virtual assistant services even before the COVID crisis thrived, as they were prepared for the new business environment, and were quick to react. But if there was someone who wasn’t surprised by the rise of virtual teams, it was us – the members of the IT industry.

But what are virtual teams – a utopia, or a dream come true? In this article, we will learn what exactly is a virtual team and is it the same as a remote team? And discuss the advantages and disadvantages of virtual teams.

1. What is a Virtual Team?

In one of our other articles, we have discussed what is a virtual team. It’s a team of people who work together on a project but are not located in the same place. They collaborate via project management software and use different communication channels (such as Slack, Skype, Google Chat, Microsoft Teams, etc.) to exchange messages.

Typically, a virtual team consists of people who work from different cities, countries, and even continents. The only condition for you to start your virtual team is to provide each employee with login credentials to an ERP/CRM and a chat system where staff members can work on the given tasks, comment, collaborate, check the progress, and complete assignments.

We often use virtual and remote teams as synonyms. But are they the same thing? Not necessary. Let’s see the difference between the two.

2. What is the difference between a Virtual and a Remote team?

While, in most cases, virtual teams are remote teams, there are some distinctive traits of each one. To start off, remote teams are usually part of the same organization. They usually report to the same manager who has at least 1 or 2 employees who are not working with their colleagues.

Virtual teams usually consist of people who are part of a project but work for different managers and can be a part of different organizations. As a result, you can hire an app development agency, marketing agency, etc. – and assign one person from each company to be part of your team. But the nuances are, in many cases, too small to notice. Thus we will use virtual and remote teams as the same term.

But let’s see the pros and cons of virtual teams and whether they can turn out to be a successful investment.

3. Advantages of Virtual Teams

Virtual teams can help companies of any size scale and improve results. In fact, a Harvard Business Review suggests remote workers add more value compared to their in-house counterparts. But what are the benefits of virtual teams? Let’s find out.

3.1. Employer Advantages

Whether you are an SMB or an enterprise,  you can find plenty of advantages when working with virtual teams. To put it simply – if remote work didn’t serve its purpose, then it would have been removed.

• Less overhead costs

Business owners can see significant reductions in running costs with the introduction of virtual or remote teams. The most obvious saving is on the cost of the office space. More people working remotely means that you don’t need as much space to accommodate your staff. Consequently, you will also see reductions in related overheads such as heating, electricity, and other utilities.  Furthermore, your employees in different countries may work under different pay scales and structures.

• Increased productivity

As we saw at the beginning of the paragraph, there is evidence that virtual teams are more productive. While it seems illogical in the first place, it actually makes a lot of sense. Long commute hours are taking their toll on employees, and as a result, they get easily tired. Another huge factor to consider is the reduced number of meetings and the less stressful environment.

• Worker Job Satisfaction

Virtual workspaces offer much more flexibility in terms of working hours. That leads to less stress and greater job satisfaction. The outcome is also positive – better employee retention.

• Talent Flexibility

By far, the biggest advantage of virtual and remote teams is access to the global talent pool. If you need to recruit a team member within a couple of days, you will unlock the hands of your hiring managers if you allow them to browse for talent not only locally but also worldwide. Last but not least – hiring virtual teams from abroad doesn’t require team members to apply for a work permit or a visa.

• Scalability

Virtual teams benefit scaling businesses greatly. Unlike traditional expansions when growing companies rent more office spaces or even change premises, hiring remote workers will not involve any additional costs other than personnel remuneration.

• Environmental Concerns

Virtual teams can significantly reduce carbon footprint since there will be fewer vehicles on the road and less traffic as a result. Also, becoming digital could mean you will need less paper, and less heating and air conditioning for these huge office facilities.

• Longer workday

Hiring remote workers can greatly benefit your business availability. Instead of being 9-to-5-bound, you can work 24/5 or even 24/7 with virtual teams. Since you can employ people from different continents, you can afford to have availability without paying overtime and sacrificing the night sleep hours of your in-house team. And if you make your calculations well, you can also get your virtual team to work during their productive hours, thanks to the time zone difference.

3.2. Employee Advantages

Employees can also benefit from the advantages of virtual teams. According to CNBC, 61% of remote workers do so out of preference. Since virtual teams emerged, more and more people have started to demand better work-life balance from their employers and also enjoy more benefits from fewer work-related expenses.

• Access to more well-paid job positions

One of the best advantages of virtual teams for employees is the vast choice of job opportunities available. Experts no longer have to live in the big city to apply for a job that can match their profile. As long as they are qualified for the position, they can send their CV and start working for a company located in a distant area.

• Less money spent on work-related costs

Employees can save a lot of money from transport costs, especially when the fuel prices are high. There’s also no need to pay for parking spaces or public transport cards. Not to mention that you can also save a lot of money from childcare and lunch meals.

• More free time available

Remote work puts an end to lengthy commutes. Instead of spending long hours traveling to work, employees can spend this time doing the chores or getting an extra hour of sleep – and as a result, they have more free time which they can spend with their families or enjoying their hobbies.

• Control over the schedule

Team members who work from home have greater control over their schedules. They can drop their kids at school or pick them up, set medical appointments, schedule a vehicle inspection, and perform other urgent or semi-urgent tasks. Then, they can simply compensate for the hours they have been absent.

4. The Disadvantages of Virtual Teams

Are virtual teams too good to be true? While positives certainly outweigh the negatives, there are some disadvantages of virtual teams that you should pay attention to before jumping to a conclusion.

4.1. Employer Disadvantages

Not every employer is keen on the idea of virtual teams. There are some “grey areas” that some business owners cannot accept, and we cannot blame them for that. Here are some of the virtual teams’ disadvantages for companies.

• Communication Problems

While working with virtual teams, one of the key suffering areas is face-to-face communication. A huge potential problem is the misunderstanding of a message. Many companies are taking measures by utilizing video conferencing software like Zoom and Microsoft Teams. Still, virtual meetings cannot fully replace personal meetings.

• Language Barriers

If you hire a multinational team based in many countries, you should all speak the same language. A worker may be excellent at their job but the value of being able to communicate with management and other colleagues is just as important.

•  Creating a company culture

Many huge brands rely on building a corporate culture. We have heard the phrase “I’m thinking the Apple Way”, or “The Microsoft Way,” etc. While you can build a culture in a remote team, you cannot fully replace big events like traditional team buildings and town hall meetings.

• Management Problems

Virtual teams work great on paper, but remote management can sometimes result in employees not understanding the instructions. It can result in either missing the deadlines or not following the project requirements. When teams are split, it’s hard to “think in the same direction.”

• Legal Issues

Employment laws vary in every country, as do taxes. Before hiring virtual teams, you need to consider if there is someone who can manage the payroll and all potential bureaucracy burden that comes along with the remote workers.

• Technical equipment obstacles

You need to pay attention to your virtual team’s workstations and Internet connections. If you have a team of 10 remote workers and even one person has a slow computer or unstable connection, it can impact the whole project negatively.

4.2. Employee Disadvantages

Many employees prefer working from home or the local cafeteria, which doesn’t mean it applies to everybody. Let’s see the disadvantages of virtual teams for employees.

• Technical Difficulties

Employees who work remotely should have a fast and reliable Internet service provider. On top of that, they should find a quiet place where they can join conference calls, and last but not least – they should be equipped with expensive hardware that enables them to do their tasks – like writing code, creating designs, opening big Excel sheets, etc.

• Social Issues

Social distancing took its toll on the mental health of all people. While pubs, restaurants, and other social amenities are open today, nothing can replace the workplace environment where people can tell jokes, make friends, and have some chat about the latest Netflix series.

• Distractions

Working from home can only work if there aren’t distractions that are negatively affecting productivity. For example, if you have a crying baby or loud neighbors, that could prevent you from focusing on your tasks and decrease productivity.

• Trust issues

Not seeing your colleagues might create trust issues among the virtual team members. Especially if the project is not advancing as planned, and that can cause internal group conflicts and make the atmosphere even tenser within the team.

Conclusion