There are three things that are true:
- Hiring technical talent in top markets is becoming increasingly more costly and time consuming
- Hiring them is only half the battle; developer retention rates are also decreasing
- New sources of domestic engineering talent aren’t going to appear overnight
Those three factors have been driving the remote teams movement from niche org structure to standard operating procedure for any company that needs to scale a technical team. At Terminal we’re fortunate to have a unique perspective of what’s going on in the remote space, having built teams for more than our fair share of high growth companies over the past several years. Based on what we’ve observed over that time - it’s pretty clear that the space is rapidly evolving, bringing with it several macro trends that are going to affect the way we all think about business growth.
Here are the six most important of those trends that will impact you in 2019 and beyond.
U.S. Immigration Policy Galvanizes Remote Team Growth
The U.S. is in a tech talent shortage crisis. There are areas like Silicon Valley where well over half the tech talent is foreign-born and unfortunately there are no improvements to immigration policy anywhere on the horizon. This is a bleak picture that means companies need to pivot from focusing the vast majority of their tech recruiting efforts domestically and instead realign resources to look outside the U.S. to fuel their growth. The downstream effects of this shift in talent strategy mean that the most in-demand leadership skill sets are now centered around the ability to successfully drive an international remote team strategy - like being able to recruit, hire, and manage remotely.
"Within the next 5 years almost every startup in Silicon valley will be 50% remote if not more. Remote teams and remote team management is already top of mind for hiring and growth teams. This trend is supported by cloud based collaboration platforms that make remote teams indistinguishable from local ones.
Always On – Digital Transformation means a 24/7 World
Sure - the customer is always right, but in the tech world, it's the customers’ expectations that are driving changes in organization strategy. You can blame Uber, Amazon, and Netflix all you want, but end users expect always on and incredibly fast. To make that happen, tech companies need to match with continuous ways to track consumer feedback, fix bugs, and release the latest and greatest product. In other words, startups and mid-sized businesses need to squeeze more out of a day, and remote teams are an obvious solution.
The trend of using remote teams in multiple time zones to lengthen the workday will continue in 2019. One recent example of success with this model is men’s health company, Hims. What has contributed to Hims becoming one of the fastest growing consumer product companies in history? A continuous development and support philosophy built with remote teams in Kitchener and Montreal that complement its San Francisco HQ’s workday.
Most companies find it easier to start in a second location that isn’t halfway across the world, but a short 3-5 hour flight away.
Remote Teams Create a new Go-To-Market Strategy
With remote becoming a universal structure for tech companies, a powerful new customer is emerging: the remote worker. We are going to see a new wave of companies and solutions built around solving the unique pain points of not having all employees centrally located. From communication to culture-building, every aspect of a business needs to be reconsidered with a remote-centric approach. There’s also a lot to be gained by businesses that decide to focus on targeting remote work - this is a massive target market that cuts across businesses of all sizes, industries, and locations. There are already some progressive companies putting this approach into action with Slack and Salesforce investing in developing content focused on remote team success.
The Definition of Remote Work Will Evolve
Despite being the future of business, remote structures still aren't well defined or understood. Further reinforcing the confusion is the interchangeable use of remote and distributed (aka virtual teams) even by those leading commentary on the space. The Buffer 2018 State of Remote Work Report, which focused on distributed team trends actually only saw 35% of the participants coming from a distributed organization.
In 2019, this confusion will subside and be replaced by distinct definitions of remote and distributed. We'll evolve past lumping anything out-of-headquarters together as "remote" to instead outlining specific remote or distributed organizational structures. Companies will be able to select from these various structural approaches and implement their optimal remote strategy based on several factors unique to them like company type and vertical, team experience level with remote management, and overall business growth plans. This means that some companies will stick to singular remote or distributed models, and others may employ a hybrid approach of both. Some early adopters are already there, like Elastic.co which has an HQ in the San Francisco Bay Area, but has a hybrid structure with both remote and distributed workers, touting on their website that "work happens anywhere - some roles let you work from wherever... other jobs are better in an office." Regardless, when it comes to remote, "one size fits all" does not apply.
One thing to keep in mind when determining distributed vs remote is that there are major benefits to having several people co-located in a single location with access to an office and all the social benefits of being part of a team. Loneliness is the biggest struggle to working remotely according to the 2018 State of Remote Work Report - but having an office to go to, even just once a week, dramatically impacts employee engagement and happiness levels.
Devaluation of the In-Person Interview
The rise of remote teams over the last decade was made possible by advancements in tech communication tools. Last year, 80% of companies said they support remote work in some capacity. When it comes to hiring, video conferencing and cloud collaboration platforms have made interviewing and evaluating candidates just as effective as flying a candidate across the country to interview in person. Over 900 companies are hiring remote employees this January, and hundreds of thousands of others are using video conferencing in the first steps of the hiring process. 2019 is the year that the majority of companies will use digital platforms from end-to-end and save big on hiring practices.
"Sure there is a cost saving for your business to eliminate travel. I think the greater reasons to implement this type of interviewing; increase hiring speed and candidate accommodation. In this candidate-driven market, the best candidates already have busy jobs they may prohibit them from taking 2-3 days off to interview. This is especially difficult for parents which could hurt the diversity of your teams.
A Remote (Talent) Star is Born – Mexico
Whether Trump builds a wall or not, this one is inevitable. 2018 saw a vast amount of American companies invest in tech ecosystems north of the border because of the abundant talent pool and proximity to HQ. Toronto became the fastest growing tech ecosystem, while Vancouver, Montreal, Edmonton and Kitchener-Waterloo also experienced explosive growth. Investment up north won’t slow down, especially from companies that are ahead of the game like Google, Facebook, and Square but increasingly recruiters will look to our southern border for talent.
Mexican cities like Guadalajara have long been a secret advantage for hot startups like Kueski and Sequoia-backed Rever, but 2019 will be the year we see mid-sized businesses trek south to build quality development teams. Talent from Mexico’s tech education system has already proven itself in Silicon Valley and beyond. The CTO of Okta, members of the engineering leadership teams at Salesforce, Netflix, Splunk, and Box are all products of Mexico’s technology education system, which graduates more than 100,000 STEM workers annually and places 8th globally. Needless to say, there are a lot of talented engineers down south and companies like Skycatch and OneLogin are already jumping in.