Growing Pains

Culture
growing-pains

Remote teams can work together pretty easily on a small scale. Let some people work from home, hire someone out-of-state – it's really no issue. But what things do you have to consider when your organization grows?

While many remote-first companies followed a certain schematic in the past – mid-sized teams, medium growth and limited access to outside investment – it's definitely not the norm anymore. With GitLab scheduled to IPO in 2020 with over 800 employees, and Zapier with over 250 global employees, there are new data points for scaled remote teams.

How communication changes

Slack spaces already get messy in smaller teams. With a few dozen to 100+ employees scattered around the world however, it can become unbearable and messy enough, that it blocks any type of work to be done.

We've written about this a ton of times before, and Slack can definitely be used right and wrong, but in a scaling organization it's just not a way to organize information for hundreds of employees.

A quick look at the GitLab Employee Handbook about Communication shows us some key aspects on how communication could work out in a global 800+ employee organization:

  • Day-to-Day communication is in text-form
  • E-Mail becomes a major way of communication, as it's a great medium to discuss longer items
  • Slack only for informal communication – avoiding private conversations
  • On all mediums, there are strongly enforced rules that avoid distractions
  • Documentations, including the handbook itself, are the main way to find information
  • There are a variety of regular and irregular calls, but they are mostly optional and recorded

The gist: To get information and solve issues, you should not rely on others and their immediate response. Having globally accessible knowledge available as part of documentations is crucial.

Communication is best done text-first, with long-form asynchronous mediums preferred – in other words: E-mail.

How to structure a multinationally distributed organization

If you're hiring international remote workers today, you know that it's fairly simple. There are a handful of ways you can hire and pay your employees quite cheaply.

  • Send them money, and have them act as contractors in their own county
  • Set up a legal entity in each country you hire in
  • Use a global employment service

While these are all suitable for growing organizations, it can make sense to streamline them at some point as things grow for a range of reasons.

While hiring your employees as contractors is largely favourable and quite straightforward, it's also somewhat unattractive for candidates and could be dangerous. You're shifting the effort to your employees and need to comply with local labour laws and might often run into difficulties in different jurisdictions. This leads to a lot of added work on all sides. In some countries and states, it can also be difficult to receive common employee benefits, such as health care or a good pension fund. Since this must be covered by the employees, the gross salary goes a shorter way.

Setting up a legal entity is favourable if multiple employees reside in the same country, but it also forces the entity to obey the local tax systems and local labour laws. Bigger corporations often do this if the amount of employees in a certain country or states become larger. This is usually connected with larger costs and time investment, so it may not be attractive to smaller teams.

Using global employment services if particularly attractive for smaller teams. Hiring itself becomes as easy as doing it locally, and there's no added effort for the employee or company. As a company grows, this becomes costly, with service fees often ranging at around 5% of the total employee's salary. It definitely makes sense to transition to other models at some point.

Why flat hierarchies might not work

"Flat Hierarchies" is often a keyword in job adverts of startups and growing teams. The idea is quite attractive: Instead of a long line of managers, connections of non-managing employees to executives is short and direct. Each employee has a say in the direction of the company, and ideas from "bottom-to-up" are usually welcome, sometimes even expected.

On the other hand, looking at some of the remote companies out there, direct hierarchies still seem to work best – even if they seem dated in today's time.

Looking back at GitLab's Handbook, this time in the leadership section, there seem to be strict distinctions between managers and non-management employees, with each managers having between 5-10 reportees. There are couple reasons for that:

  • Managers are responsible for their reportees. If something is wrong, a remote employee needs to know who they canping and talk to
  • 1-on-1s are a great way to stay in-the-loop in a remote team, and a direct manager is a great person to conduct these (related: our premium post on conducting great 1-on-1s)
  • It's simply the best proven choice when it comes to retention and employee satisfaction

Remote-First is key

So, how can we ensure that our small remote team is set to scale into a big company? The solution is to act remote-first.

If everyone – including management and executive team – act or are remote, it's much easier to catch issues and blockers early on. On the other hand, if the setup is more on the hybrid side, it can be difficult to see these issues as an outsider.

Important: As we have described in previous posts, remote-first is not the same as all-remote. It's perfectly fine for a remote-first company to have office locations and local employees. The difference is the mindset, which is difficult to evaluate. Let's think about it using a few key points:

  • Are you expecting new hires to be near an office by default, or are they remote by default?
  • Is scheduling and timing locked to a HQ? How are meetings planned?
  • Let's look at meeting etiquette: Are local employees set in a meeting room, or do they join on their own clients? In the first part, you're putting remote employees at a disadvantage.
  • Are any conversations and decisions unaccessible by remote employees?
  • How many late nights / early mornings do your remote employees have to work to comply with HQ times?

Remote-First is built into a company's DNA, and is usually part of the company thinking from the first day. If you have remote workers today, but wouldn't classify your organization as "remote-first", it's going to be very hard to scale long-term.

Transforming an organization is probably a post in itself – for now, why don't you reach out to us?

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