Why hiring remote workers might (or might not) pay off

More people are trading in commutes and cubicles for couches and coffee shops: As of 2016, 43 percent of employees worked remotely at least part of the time, up from 39 percent in 2012, according to Gallup's State of the American Workplace report.

For small businesses that don't need employees onsite, high-speed internet, communication apps, and video conferencing make it easier to hire people located virtually anywhere. But forming relationships with remote workers may be more challenging.

Here are some pros and cons of hiring remote employees, along with tips on making it work.

PROS: COST SAVINGS, FLEXIBILITY

Businesses that are fully remote don't need to pay rent and other expenses that come with a physical space, and partially remote businesses can make do with a smaller office.

Joe Scott, owner of Vault Cargo Management, says he always intended to have a remote team because of the flexibility. Lower overhead has been a bonus: Moving his six employees into an office in Green Bay, Wisconsin, would likely cost $1,500 per month.

"It would have hamstrung us as far as being able to grow as quickly as we have been able to, especially early on," says Scott, who launched the outdoor equipment business in 2015.

And with remote employees, hiring isn't limited by location. You can select from a larger talent pool and reach candidates with more diverse skills, knowledge and experience.

Remote hiring helped Scott find candidates that best fit his company's culture. The team includes two employees in Texas, one employee in Wisconsin, one in California, one in New Jersey and one in the Philippines.

"We're centered around an outdoorsy type of community with our business, so it's very important we find people who fit that mold," Scott says.

Employees are also more engaged when they work remotely most of the time and benefit from improved technological support, according to the Gallup study.

And bosses might be less likely to micromanage remote workers and pull them into unnecessary meetings, which can lead to higher retention rates.

"I feel like we haven't really lost anyone," Scott says. "A large part is because we're flexible: As long as stuff gets done, it doesn't matter when it's happening."

Jill Caren is the founder of 2 Dogs Media LLC, a digital strategies agency based in Monmouth County, New Jersey, that employs international part-time remote workers. She previously worked remotely as a designer and developer. With employees in multiple times zones, someone's always on the clock, which she values.

"Waking up in the morning with work that was delegated the night before is a huge help with our schedule and in exceeding client expectations for delivery," Caren says.

CONS: LOSS OF CONNECTION AND DISCIPLINE

Forming relationships with and among fully remote employees can be harder than in a traditional office.

Employees who work 100 percent remotely have the lowest engagement among remote workers, with engagement levels the same as employees who never work remotely, according to the Gallup study.

Everyone loses the in-person interaction, such as elevator conversations and after-work happy hours. Remote workers might also miss out on morale-boosting team-building events.

"It's easy to kind of forget they are people on the other side of the screen, simply because we don't ever really see them," Scott says. "You have to keep in touch like you would in a physical setting."

Candidates should also have the self-discipline and independence that's required to work from home without being distracted by TV, social media, house chores or family and pets.

Caren had to fire a remote worker after six months due to a communication gap.

"Lack of understanding of the project requirements as well as lack of updates on project status were major issues," Caren says via email.

HOW TO MAKE IT WORK

The main keys to success are hiring right the first time, building a culture of trust, and having technology and support that facilitate effective communication.

Cristina Escalante, chief operating officer of The SilverLogic, a computer software company in Boca Raton, Florida, says the interview process screens remote workers for strong communication skills.

"When you're working collaboratively as a team, you have to be able to think and communicate concepts effectively for someone who can't see you in person," Escalante says.

Daily interaction and frequent check-ins can help establish this expectation. And, when possible, annual in-person meetings or retreats help strengthen relationships.

This article was provided to The Associated Press by the personal finance website NerdWallet. Steve Nicastro is a writer at NerdWallet. Email: Steven.n@nerdwallet.com. Twitter: @StevenNicastro.