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5 Reasons Why Remote Startups Attract Better Talent

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Opinions expressed by Entrepreneur contributors are their own.

According to a recent Gallup survey, there has been a 57% rise in employees being actively recruited since 2015. At the same time, 65% of employees prefer hybrid work, with the majority intending to leave if they aren’t permitted to work in their preferred arrangement.

To win the war for talent, companies that can, need to find a way to meet the “remote expectation” of employees. This is even more true for startups, where the right talent can make or break the organization. There are multiple ways in which a startup may meet this remote expectation: They might go “remote-only,” requiring that all employees go remote; or, they may adopt a “remote-first,” “remote-friendly” or “hybrid” model, all of which support remote work to varying degrees.

Here, I share some insights on why remote startups attract better talent, based on my experiences recruiting and hiring international teams, both for my own organization and for client companies.

Related: 4 Great Things That Happened When We Went Remote

1. Access to a larger pool of candidates

Remote companies have access to a large and diverse talent pool. Even within one country or state, by going remote, potential hires no longer need to be based in one city. The benefit becomes even greater when the business is willing to hire remote candidates from overseas — the entire world becomes an effective talent pool. And while there are some compliance requirements when hiring remote employees overseas (such as paying employment taxes and compulsory contributions), these can be easily resolved via an Employer of Record solution.

2. Remote startups can grow more quickly due to productivity gains

For a long while, the potential productivity boost from remote work has been recognized. In one study, employees who worked remotely were shown to be 13% more productive than in-office employees. The productivity boost likely has several causes:

  • Remote employees may feel more “refreshed” at work, without time spent commuting.

  • There is a greater ability to focus on work, with fewer office-based distractions.

  • Remote workers are likely to have more flexibility around when they work, so they can work when most productive.

  • Employees experience an enhanced work-life balance (such as the ability to arrange childcare drop-offs and pick-ups around working hours), which means they are more engaged while at work.

For a rapidly-growing startup, the importance of any potential productivity gains early on cannot be underestimated. But this is not just about the benefits to the remote startup itself — potential employees themselves prefer startups with good future prospects. By going with a remote startup, an applicant is likely to choose a more successful startup and one where they have a higher chance of promotion and long-term career success.

3. The best employees expect the best benefits

Where a role is in high demand (e.g., specialist software engineer positions), it is only natural that employees will have extra leverage in demanding benefits. This might include, for example, asking for extra paid time off or asking for a premium health insurance package. The ability to work remotely is a similarly attractive benefit to applicants/new hires. By offering remote work as an option to applicants, startups may find that they are able to attract the best applicants without the additional cost of premium benefits.

Related: 9 Ways to Recruit the Best Talent for Your Startup

4. Async work goes naturally with remote work

With high-profile companies like Shopify banning recurring meetings with three or more people recently, we are seeing a new prioritization of asynchronous (“async”) work. For certain roles, the benefits of async work are undeniable: It gives individuals the time and space to concentrate and engage in focused work, which is not possible with constant interruption.

For remote startups, async work is often already ingrained within their work practices. Having distributed teams spread across multiple regions or countries makes it inevitable that all communication cannot be “synchronous,” and that individuals will carry out their work with more independence. For tech talent especially, this cultural feature of remote startups may be extremely appealing — async work allows a level of autonomy that many tech workers find invaluable.

5. The potential for higher salaries

As a remote startup, infrastructure costs are usually less than they would be in a traditional brick-and-mortar operation. Without physical office costs (or, at least, reduced physical office costs) and heating costs, surplus funds can be allocated toward employee salaries to attract better talent. Of course, independent of salary, employees themselves also tend to benefit financially from a remote setup through reduced commuting costs (both in time and money).

With sustained strong demand for talent in specialized roles, startups need to do what they can to attract the best candidates and retain those employees. To remain competitive, startups need to take the remote work challenge seriously. A remote startup will find that it benefits from access to a larger hiring pool, and those who insist that all employees remain in-office may find that their businesses are losing out on top talent.

Related: How Flexible Work Will Give Your Business the Biggest Advantage

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