Remote Leadership Report


How leaders are navigating the rapid rise of a remote workforce

Terminal remote leadership report

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Introduction

As the workforce suddenly and unexpectedly went remote this year, leaders and organizations across the world are currently experiencing an unprecedented upheaval of traditional working norms. And it’s clear there’s no going back to status quo.

Remote may take many forms in the future, but it’s clear that accommodating remote employees is no longer just a ‘contingency plan’ and instead must be adapted as a long-term strategic mindset of leaders.

While there’s been considerable research into remote work pre-COVID, there’s a gap in the bigger picture data necessary for understanding how leaders are handling the switch to remote — a perspective which will guide us all in adapting and succeeding in a remote-centric future.

To gain an understanding of how leaders today are navigating these shifts, we surveyed 400 HR and engineering leaders. What follows is a comprehensive look at remote work challenges, frustrations, and, most importantly, insights into how to build that critical, future-ready remote strategy.

The data tells us, the short-term shift has given leaders confidence in remote, but they will need to embrace key skill gaps for remote organizational effectiveness — from learning how to recruit remotely and grow a healthy culture across distances, to creating remote-specific benefits, L&D programs and new methods for kindling the fire of innovation among their teams.

We hope you find this report useful in understanding the remote work ecosystem and how we can all take steps to grow into the high-performing remote organizations that we’re capable of becoming post-pandemic.

Onwards and upwards,
Clay Kellogg

Key insights

COVID-19 has accelerated the shift to remote.

Prior to the pandemic, almost 60% of companies restricted remote work in some capacity, either not allowing employees to work from home, limiting days, or only granting approval when given a good reason. But now, half of leaders anticipate increasing the number of employees working permanently remote in the next 2 years, with 81% reporting that C-19 has boosted their confidence in going remote long-term.

Few leaders have a long-term remote strategy in place.
Leaders are focused on short-term productivity, not burnout or loneliness.
Leaders favor trust over productivity trackers — but many still employ “big brother” tech.
Remote culture is a major pain point.
Remote work yields unexpected benefits.
Companies will need to create intentional L+D opportunities to win candidates.
Leaders aren’t looking beyond their zip codes to find new talent.
> external forces

COVID-19 has accelerated the shift to remote.

It goes without saying: the pandemic has transformed the workplace forever. Overnight, companies were forced to shut office doors and support a suddenly remote workforce.

And despite challenges, leaders have found that remote can work.

Prior to COVID-19, nearly 60% of engineering and HR leaders reported some restrictions around their team’s ability to work from home. Now, half of these same leaders anticipate increasing the number of remote employees in the next two years, with 25% saying their remote workforce may double during that time.

But these predictions don’t come without concern over the future — nearly half of leaders are concerned or very concerned about the negative impact of remote work on their teams.

> pre-COVID

How companies handled “working remotely” before the pandemic

> perceptions of success

LEADERS BENCHMARK THE SUCCESS OF SHORT-TERM WORK-FROM-HOME

Functional leaders may feel more strain: 22% of leaders in the C-suite think their team is stronger than ever operating remotely, compared to just 11% among Director level employees.
> confidence boost

HOW COVID-19 HAS CHANGED LEADERS’ PERSPECTIVES ON REMOTE WORK

Remote work isn’t going away: Half of leaders anticipate increasing the proportion of their employees working permanently remote in the coming 2 years, and 1 in 4 say the number of employees working permanently remote will double during that time.
> pros of remote work

LEADERS SAY REMOTE HAS IMPROVED PROACTIVE COMMUNICATION AND EMPLOYEE HAPPINESS

Enterprise sees communication boost: Leaders at larger companies say they’ve been communicating more proactively (47%) compared to 33% among companies with 100 or fewer employees
> cons of remote work

TOP CONCERNS FROM LEADERS DEMONSTRATE NEED FOR PROACTIVE COMMUNICATION AND CULTURE-BUILDING

> future challenges

LEADERS SHARE CONCERNS OVER FUTURE NEGATIVE IMPACTS ON COMPANY CULTURE, EMPLOYEE ONBOARDING/RETENTION, AND BUSINESS REVENUE

Success breeds confidence: 43% of those who think their company navigated the shift to WFH very successfully are “unconcerned” about negative impacts.
> experience

Remote management is a new skillset for leaders.

Most leaders are tackling the challenges of remote work for the first time, with 77% of leaders reporting that they’ve never managed a fully remote team, and 89% having never managed a partially remote team. Remote hiring is also uncharted territory. More than half of employers (54%) have never hired an employee in another country, and 43% have not hired someone without meeting them in person.

Leaders at rising startups (Seed/Series A-B) report greater experience in remote hiring and management, with more experience hiring an employee without meeting them, hiring an employee in another location, or managing a partially remote team.

> remote track record

EXPERIENCE HIRING AND MANAGING REMOTE EMPLOYEES

Experience drives success: 62% of those who feel they navigated the short-term switch to WFH “very successfully” had experience managing a partially remote team prior to COVID-19.
> pre-COVID

RISING START-UPS REPORT GREATER FAMILIARITY WITH THE WORLD OF REMOTE

> remote work planning

Leaders say a remote strategy is critical—but few have one in place.

Only 19% of business leaders report having a remote work strategy in place prior to COVID-19 — the rest are in the process of trying to build one. For those that do say they have a strategy, most lack critical components, such as remote onboarding (included in only 33% of existing plans).

Of the plans already in place, most are focused on addressing business needs, such as employee productivity (covered in 63% of plans ) versus supporting a positive employee experience. Only 21% of plans addressed employee burnout and 32% of plans addressed isolation, even though over a quarter of leaders reported concerns about these specific issues.

> long-term outlook

LEADERS SHARE THEIR STAGE OF PLANNING FOR A REMOTE FUTURE

The future is unclear: 95% of leaders think they navigated remote work during COVID well, but fewer than 1 in 3 have a long-term remote strategy
> plan in place

WHEN LEADERS DEVELOPED LONG-TERM REMOTE STRATEGIES

Startups lead the way: Rising startups are the most likely to have a remote strategy at 44% (compared to 29% of mid- and late-stage and 27% of public companies). 27% of public companies report they are only thinking through the end of 2020 for now.
> what’s inside

A BREAKDOWN OF WHAT’S ADDRESSED IN EXISTING REMOTE STRATEGIES

In their infancy: 61% of remote work strategies are less than a year old.
> challenges of remote

Remote culture is a major pain point.

Only 27% of leaders say they have a strong and thriving remote culture today. Even among the 42% of leaders who say their culture is ‘okay for now,’ they admit it’s not optimized for the long-term. One leader told us she worries how her team “will maintain a strong culture and feel like they are part of a team, rather than a collection of individuals.”

Leaders say simple fixes won’t cut it. 59% say that a Zoom happy hour doesn’t count as company culture. Instead, 44% of respondents felt that proactive communication and transparency were the keys to a successful remote culture.

> team strength

HOW COMPANIES PERCEIVE THEIR CURRENT REMOTE CULTURE

> creating culture

A RANKING OF WHAT LEADERS BELIEVE IS CRITICAL TO CULTURE

C-Suite favors clear goal-setting: 50% of C-suite leaders say establish a culture of proactive communications with clear goals and expectations compared to 38% of Directors.
> measurement

HOW LEADERS ARE MEASURING CULTURE AT THEIR ORGANIZATIONS

Startups prioritize communication: 67% of rising startups say the culture of proactive communications is most important, much higher than mid-stage 41%, late-stage 45%, and public companies 35%.
> remote benefits + programs

Employers still figuring out how to translate traditional benefits to remote.

Developing remote benefits appears to be a work in progress. 64% of leaders have developed productivity tools for their remote employees, but less than half are offering mental and physical health resources. 44% of leaders don’t currently have an onboarding process specifically developed for remote employees and nearly 1 in 3 leaders admit their learning and development program for remote employees is worse than in-person programs, or they don’t have one at all.

What’s more, nearly 1 in 3 leaders (29%) lack a plan for replacing traditional in-office benefits or perks for remote employees, such as home office stipends or expensed meals.

> benefits for remote employees

WHAT LEADERS HAVE DEVELOPED SPECIFICALLY FOR REMOTE EMPLOYEES

Good onboarding = success. Leaders who feel their transition to short-term WFH was “very successful” are 28% more likely to have a remote-specific onboarding process.
> learning + development

LEADERS RANK THE EFFECTIVENESS OF THEIR REMOTE LEARNING AND DEVELOPMENT PROGRAMS

Larger companies, more benefits: Large companies (501+ employees) are more likely than companies with 100 or fewer employees to have almost all of the benefits addressed by leaders.
Engineering leaders favor housing support: 21% of engineering leaders are in support of the employer paying a portion of rent/mortgage, compared to 9% among HR leaders.
> remote-specific perks

REMOTE BENEFITS THAT WILL REPLACE TRADITIONAL IN-OFFICE BENEFITS OR PERKS

No plan in place: Nearly 1 in 3 leaders (29%) lack a plan for replacing traditional in-office benefits or perks for remote employees.
Engineering leaders favor housing support: 21% of engineering leaders are in support of the employer paying a portion of rent/mortgage, compared to 9% among HR leaders.
> promoting creativity + innovation

Leaders lagging behind on new approaches to spark innovation.

Nearly 1 in 5 leaders are not taking any specific action to promote creativity and innovation among remote workers. Among those who are taking action, over half are relying on team brainstorms and working sessions. Only some are testing approaches like virtual hackathons (22%) and inspirational speakers (26%).

> remote inspiration

HOW LEADERS ARE PROMOTING CREATIVITY AND INNOVATION FOR REMOTE WORKERS

Lack of leadership planning for cultivating team innovation: 26% of leaders at small firms with 100 or fewer employees don’t do anything specific to promote creativity and innovation, compared to 13% at firms with more than 500 employees.
> remote trust + productivity

Leaders favor trust over productivity trackers — but some still employ “big brother” tech.

Productivity is certainly a major topic for leaders today — 19% say that one of the cons of the pandemic is that they can’t get a sense for their team’s productivity. And, for leaders who have a remote plan in place (see page 9 on remote strategy plans), 63% address the area of productivity.

Leaders believe in a trust-based approach: 78% of leaders say they favor trust over tools when it comes to evaluating employee productivity. Yet, some leaders report they are using “big brother” tracking tools. 34% of leaders have taken a big brother tech-based approach to tracking remote productivity. 29% require employees to report how they spend their time.

> productivity tracking

HOW LEADERS ARE EVALUATING PRODUCTIVITY AND OUTPUT OF REMOTE WORKERS

Communication and manager check-ins are key: 52% of leaders at rising startups ask employees directly how effective and productive they think they are, compared to 35% at late-stage and public companies.
Tools in play: 64% of leaders report they’ve developed or employed productivity tools for remote employees.
> remote leadership

Lack of centralized remote processes can hamper success.

37% of organizations lack a centralized way of managing the remote processes of their organizations. Data shows that companies who are thriving in their short term shift to remote work also tend to have a single person internally responsible for overseeing remote work processes. Interestingly, rising startups are the most likely to take this approach.

> remote practices

HOW COMPANIES ARE MANAGING REMOTE PROCESSES

Engineering leaders are leveraging external remote consultants: 11% of engineering leaders partner with an external company/consultant compared to only 5% of HR leaders.
A remote leader pays off: 32% of companies that reported being “very successful” in switching to short-term WFH have a specific person assigned to overseeing remote processes, compared to 13% among leaders who weren’t successful in this shift.
Early startups house an internal remote work point person: Rising startups are the most likely to have a single individual overseeing remote processes company-wide at 34%, compared to just 16% among public companies.
> remote salary adjustment

Companies favor pay alignment, regardless of geographic location.

At large, companies are not planning to adjust salaries for existing employees, even when relocating to more affordable locations or remaining remote for the long haul. 72% of leaders say they plan to either pay all employees the same for a given role or freeze salaries if they were to relocate elsewhere. However, at larger companies, it remains relatively common to provide location-adjusted salaries for new hires.

> salary adjustments

HOW COMPANIES ARE HANDLING SALARY ADJUSTMENTS AS EMPLOYEES RELOCATE OR STAY REMOTE IN LESS EXPENSIVE LOCATIONS

Early adopters of remote have a head start on compensation: 50% of companies with a permanent remote work strategy say they’ll pay all employees the same for the role no matter where they’re located, compared to 36% among companies without a strategy.
Startups still figuring it out: 25% of rising startups don’t have a plan on how to adjust compensation for location.
> remote recruiting

Companies aren’t looking beyond their zip codes to find new talent.

Though companies have made a quick switch to remote work, many have yet to create strategies for how to effectively recruit talent remotely. Even within HR teams, 31% do not have remote recruiting strategies in place. At large, 1 in 5 leaders reported not having a strategy for finding talent in a remote work environment, while 47% are still relying on looking in areas near where they currently have offices. Global talent pools remain largely untapped among leaders, with only 35% reporting that they had hired someone in another country.

> remote hiring

HOW COMPANIES ARE FINDING REMOTE HIRES

Engineers favor AI recruiting: 42% of engineering leaders say they plan to invest in new technology like AI to find candidates anywhere, compared to 31% among HR leaders..
Remote recruiting not yet common in HR: 31% of HR leaders admit they don’t have a specific strategy yet, compared to 16% of engineering leaders.
Increasing competition for talent: 63% of leaders at rising startups say that big tech companies going remote will make it harder for them to find and keep great talent, compared to 44% at mid-stage, 37% late-stage, and 43% public.

TIME ZONE ALIGNMENT IS STILL KEY

For remote workers, time zone alignment is still proving to be one of the most important factors contributing to remote team member productivity. For internal hiring managers building out teams, there’s also a large focus on finding candidates with strong time zone overlaps to where HQs already exist.

Engineering leaders focusing recruiting efforts around core time zones: 42% of engineering leaders say they plan to focus on areas within the same time zone when building a team, compared to 22% among HR leaders.
Time zones especially critical among rising startups: 52% of leaders at rising start-ups will be focusing on time zone alignment compared to 38% at mid-stage, 35% at late-stage, and 26% at public companies.

Conclusion

While COVID has certainly accelerated the widespread adoption of remote work, this movement has been a growing trend for years. Today, with remote work here to stay, it’s time for companies and leaders alike to step up and weave the best practices of remote leadership and management into the very fabric of their organizations. This is how we can prepare to thrive in the business ecosystems of the future, which are in development today.

Profile of respondents

> methodology

Terminal conducted this research using an online survey prepared by Method Research and distributed by Dynata among n=400 HR and engineering leaders. Data was collected from July 10 - 23, 2020.

Age

Gender

Location

Company HQ

Ethnic group

COMPANY SIZE

BUSINESS SECTOR

COMPANY STAGE

COVID WFH

DEPARTMENT

EMPLOYMENT STATUS

JOB TITLE

STRATEGIC DECISION INFLUENCE

About Terminal

Terminal is a remote teams engine for fast-growing companies. This means we hire, house, develop, and retain engineering teams — so that you can focus on building brilliant products. Today, we build remote teams across North America, Mexico and Colombia with campuses in five vibrant tech hubs: Vancouver, Kitchener-Waterloo, Toronto, Montréal and Guadalajara, supported by our unique model that blends recruiting, HR, ops, and community to drive growth.

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