Virtual teams are on the rise but they divide people: some managers love them and others hate them.

Savvy business owners ought to ask themselves: "What's in it for me?", now that web-based videoconferencing, shared screens and cloud-based software have made virtual teams so 'easy'.

That's why I have outlined the key pros and cons of virtual teams, so you can decide what they could offer your business.

A virtual team is where the people working together are in different physical locations most of the time. They might still get together every now and then – say once every month, or quarter – but most of their work is done remotely.

What are the downsides of virtual teams?

1. Communication can be limited. While all teams should have good communication, remote teams need to be experts at it. You need to know how to use technology to your advantage, which takes a little sophistication.
2. Team bonding opportunities are limited. Distributed teams don't have the luxury of being able to hang out whenever they want, as traditional office teams do. They need to find creative ways to connect as a team. It's not impossible but it does require some 'outside-the-box' thinking.
3. Managing timeframes and timezones can be difficult. If your virtual team is global it can be hard to find openings in your calendar when everyone can connect. Plan ahead, and be willing to make compromises occasionally.
4. Creating work-life balance is hard for some. Working from home can add lots of distractions to an employee's work life. Some employees struggle to resist temptations like watching TV or doing household chores, while others are very good at staying focused on their paid work. Having a clearly-defined area for work does a lot to resolve this issue.
5. Managing a remote team can be a challenge. Not all managers are well suited to managing a virtual team. It becomes even more important to be a great communicator, with empathy and strong leadership skills. Managers can learn these skills and they increasingly want to, given the rise of virtual teams.
6. Social isolation is real. If you work from home, alone, without much human interaction, you might start missing the banter and chit chat of the office environment. These days most virtual teams use videoconferencing to counteract this isolation – a daily meeting goes a long way.
7. Less 'direct line of sight' for managers and team members. It is not only managers who are interested in team members' performance on the job – peers want to know too. Managers of virtual teams need to establish transparent outcome measures, so it is obvious that everyone is pulling their weight. Collaborative project management software allows this, but KPIs and objectives for each person's role also help.
8. Fewer impromptu catch-ups. If you work in an innovative, collaborative or dynamic team, you might find that a virtual team arrangement makes life difficult. This is the reason Yahoo! asked its telecommuting staff to come back to the office: technology still hasn't replaced the value of face-to-face interactions. However, not every team and not every role requires team members to be collaborative and innovative 24/7.
9. Expensive catch-ups. The successful companies that depend heavily on virtual teams recognise that there is great value in bringing people together. If your team is global it can become quite expensive to get together. That being said, the savings on office space due to virtual teams are enormous. Thanks to great tools like video chat, web conferencing and the ability to record meetings, your need to bring everyone together may not be as pressing as you once thought.
10. Potential lack of cohesion. Every team risks losing cohesion when it stops working towards the same goal. The difference with virtual teams is that managers may notice the lack of cohesion earlier. Managers still need to establish a clear vision, clarify roles within the team and manage meetings well so there is no confusion.

If you think that sounds like a lot of downsides, notice how each of those issues can be managed to reduce their impact. In the equation of virtual team pros and cons, the question is whether the upsides are strong enough to counteract the extra effort, which is mainly about communication.

So why persist with virtual teams? The upsides include:

1. Eliminate a major business overhead. Not having an office means saving on one of the biggest overheads of running a business, second only to staff costs. Even if you provide money for an employee to set up their home office, the cost remains a fraction of the cost of renting an office space.
2. Have happier, more engaged staff members. When people don't have to endure a long commute and have more flexibility in their schedules, they have control back over their lives. Many of the major motivation theories highlight the importance of control and influence over our lives for happiness.
3. Skyrocket your productivity rates. People who work from home are measurably more productive than those who work in an office. You need to think about what work is being done in your team though, because not all work lends itself to being highly productive when working alone or over communication technologies.
4. Expand your hiring pool. Virtual teams enable you to capture skills that were previously inaccessible. With virtual teams you can hire more experienced employees, those who don't want to relocate, or who want to avoid a long commute. Most people with skills who can't currently access the workforce are extremely keen for a work-from-home position.
5. Serve more clients across a wide range of time zones and locations. Some businesses have two teams – one on either side of the globe – so work can continue around the clock. Even if your team is less global, you can extend the hours you provide customer service by using an international phone number. Or, if you work face-to-face with your clients, you could enable your team to work virtually to reach a broader geographic distribution of clients.
6. Reduce the time you need to spend managing your staff. If you think you need to increase the time you spend managing your virtual team, you will be surprised to discover it will take less time to manage them. Micromanagement doesn't work in virtual teams, so it frees up a lot of your time. Successful virtual managers are very good leaders who set a clear direction, allocate roles, help people to understand the outcomes and let them get on with it.
7. Enjoy staff loyalty. Members of virtual teams tend to love the flexibility that comes with their new geographic independence. As a result, they report feeling better towards their company, and intend to stay longer – that is, if their manager has worked out how to manage a virtual team in the right way.
8. Fewer sick days taken. Similarly, members of virtual teams are less likely to call in sick. Several businesses have shared examples of how their teleworking/telecommuting staff use fewer sick days (usually around 6% less).
9. Reduce your carbon footprint. Establish a virtual workplace and take a few more cars off the road. See how your employees enjoy talking about their clean 'commute' to their home office.
10. Enjoy unparalleled business continuity. If your business needs to continue to run after a heavy storm, flood, fire or earthquake, a virtual team is your insurance policy; inevitably you'll recruit people outside of the affected area, who can keep the business running.

Virtual teams have an essential role in business. I couldn't think of running my consultancy firm without the advantages of a virtual team.

Virtual teams are on the rise because more businesses are realising that the advantages outweigh the disadvantages by a significant margin. In an age where businesses need to be more agile and do more with less, the importance of virtual teams will only increase.

The challenge of getting the most out of virtual teams is mainly faced by managers but once great practices are in place, which business wouldn't want to reduce office costs, have more engaged staff and skyrocket productivity?

Take your conversation to Twitter, where we can continue to talk about virtual team pros and cons.

Nina Sochon
Nina Sochon is a leading expert on remote and flexible work in Australia and a High Performing Workplaces Consultant. Nina now assists businesses to drive amazing service outcomes and powerful staff engagement through a clear system of results management, effective leadership and highly productive remote and virtual work arrangements.

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