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Reviewing the Pros and Cons of Virtual Offices

General Business News

September 2016

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Reviewing the Pros and Cons of Virtual Offices

As the name implies, a virtual office exists primarily, if not exclusively, through the use of the Internet, a web of computers and software that workers use to do their jobs.

As Fortune magazine reports, two-thirds of major U.S. companies allow workers to telecommute infrequently and only one in three major American businesses permit workers to telecommute on a regular basis. With virtual offices used by employees and independent contractors alike, what are the advantages and disadvantages of a virtual office?

Advantages

With virtual offices having no physical constraints, they provide business organizations many financial and human resource benefits.

Since virtual offices, for the most part, are run over the Internet, there's little need for commercial real estate expenses. At most, there might be a need to rent temporary meeting space for a client for a few hours or days. Temporary office space with on-demand scanning, printing and administrative help might be available to augment an otherwise virtual office space. Depending on the savings of dynamic office space rental, real estate savings could provide businesses with more competitive quotes for clients.  

Virtual offices provide two related advantages, especially when it comes to recruiting and staff retention benefits. When a worker, contract or employee, cannot arrange transportation or it's not possible to travel on a daily basis due to geographical or personal reasons, virtual offices provide businesses with greater access to more candidates.

Similarly, virtual offices can provide businesses an option to find qualified candidates, if nearby talent lacks desired skills or experience. If a business is located in a sparsely populated area, a virtual office’s Internet-capable reach may make up for a skills-gap.  

Disadvantages

While virtual offices are advantageous for reasons already discussed, they do present some challenges. One disadvantage of a virtual office is that communication amongst workers is challenging due to its inherent design.

Unlike traditional or open space offices where colleagues can face or turn to each other to clarify assignments, task coordination is more difficult in virtual offices. This is due to the lack of face-to-face communication that using technology almost exclusively creates. This may make task coordination less efficient through overlapping emails, redundant phone calls and different file versions that could present work-flow confusion.

Virtual communication, such as chat or email, can lack the verbal cues face-to-face communication naturally possesses. This can lead to misinterpretation of cultural norms or an employee taking offense to an otherwise well-intended comment or emoticon.

Worker culture also is impacted in virtual offices by the difference in the inherent work environment. Challenges include some workers lacking a high level of discipline and motivation to stay organized and maintain deadline accountability. If reference checks are not taken to evaluate a potential candidate’s work ethic, especially in the contract economy, worker results may vary. Internal and external team-building exercises may be accomplished, but can similarly lack the verbal cues in-person team building exercises do.

While virtual workplaces have the potential to attract and find the right talent, it’s prudent to properly vet candidates for work performance and ethics before hiring.

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These articles are intended to provide general resources for the tax and accounting needs of small businesses and individuals. Service2Client LLC is the author, but is not engaged in rendering specific legal, accounting, financial or professional advice. Service2Client LLC makes no representation that the recommendations of Service2Client LLC will achieve any result. The NSAD has not reviewed any of the Service2Client LLC content. Readers are encouraged to contact their CPA regarding the topics in these articles.

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