The 5 Biggest Pitfalls Of Running A Virtual Office

Working form home has its advantages, but look out! There are also downfalls to abolishing the physical office.
August 15, 2011

In my last article, I espoused the many reasons why your company should embrace the virtual office and encourage those that wish to work from home.

I did a remarkable job of making it all smell like a bed of roses, but I did warn that there are some downsides to abolishing the physical workplace. True to my word, here are the five downsides to the virtual office ethos.

1. Loss of efficiency

While it's true that most employees will see an increase in individual efficiency, the company collectively may see times when it's not running on all cylinders. Allowing your employees to choose their own working hours can lead to headaches and, in a crisis, a major panic. If your website crashes and your webmaster happens to be in a movie theater with his phone switched off, those ensuing two hours can seem like an eternity. Likewise, calling an "all hands on deck" emergency meeting is just about out of the question when your employees work remotely.

Of course, these tend to be minor inconveniences that can be overcome. Webmasters have to have cell phones on vibrate at all times—no matter how important it is for the Green Lantern to save the world. Key managers—the ones you need to meet with at least once a week—can be reached via Skype or GoToMeeting, or you can schedule standing times when they need to be "in office."

2. Negative perception

While more and more companies are switching to virtual setups, customers, investors and business partners may still look down their corporate noses at you. Are you a serious company or not? Will you still be around next month? What if we have a major issue and I need to meet with you? These are all valid questions, but fortunately ones that are asked less and less these days.

At Trackur, we actually make a point of telling people that we have no physical office. We explain that by forgoing an expensive office space, it allows us to offer our social media monitoring tools at a lower cost than our competitors. Nothing gets a customer over the negative stigma of a virtual office environment faster than saving money!

3. Less camaraderie

I admit, I miss the water cooler. I miss the opportunity for our employees to physically connect. There's a lot of camaraderie built around discussions of Monday Night FootballThe Bachelor, or the latest antics of Lindsay Lohan. Grabbing lunch together, white-boarding a new idea, or even simply poking fun at one's choice of cubicle music, all help build your company's personality.

To counter this, we try to stay connected in other ways. Telephone, e-mail, and instant messenger are all key, but we also try to arrange company lunches or dinners— especially to celebrate the completion of a big milestone.

4. Compliance difficulties

I can't even begin to imagine the compliance issues that a virtual office presents to a large, publicly-traded company. The Sarbanes-Oxley requirements alone must keep even the staunchest virtual office supporter awake at night. Even for small, private companies it can be unnerving to not have that immediate oversight that comes from a physical office environment. However, work-at-home employees are smart. They know a good thing when they see it, and they're not about to screw it up by leaving your customers' financial data on a thumbdrive at Starbucks.

Still, it makes sense to provide your virtual staff with a list of guidelines that keep them as compliant as possible. Try not to get too paranoid, but include things such as avoiding open Wi-Fi networks, no tweeting company profits, and if they keep client details in their home, they should use a locked filing cabinet. Simple, straightforward common sense.

5. The battle of trust

You see, when you have a physical office it's very easy to take the corporate stroll. You know, the one where you wander around the halls and check in on everyone and everything. Simply being there is enough to ensure that everyone knows that only so much goofing-off is tolerated. Two-hour lunch breaks will be noticed. And, it's obvious when you are on Facebook when you should be working on your TPS report.

It's easy to become a micro-manager when your employees work remotely. I don't consider myself one, but even I tend to send the obligatory "How's it going?" or "Any status update?" requests more than I should. This passive-aggressive behavior is normal when, like me, you're still getting used to the concept that employees are working remotely. No matter how tempting it may seem, avoid any kind of hourly or daily reporting requirement. You'll just suffocate your employees and ruin all the benefits you may get from letting them work to the beat of their own drum. Trust that they are working hard and you'll typically find that trust is rewarded...often more so than you expected.

So there you have it. You now have my advantages and disadvantages of running a virtual company. Of course, I've just scratched the surface here, but that is where you come in. What do you like about working from home? How has your business flourished since ditching bricks-and-mortar? Or, what horror stories do you have about telecommuting?

Please leave a comment and let me know.