The SMB’s compass to digitalization  

4 min

Updated on Apr 18, 2024

Published on Aug 2, 2022

7 reasons why remote working is the competitive edge for SMBs today

Why remote working is the competitive edge for SMBs
Hrishikesh Pardeshi

Hrishikesh Pardeshi

Influencer and co-founder at Flexiple

Illustration: Gawon LEE


Hrishikesh Pardeshi is the co-founder at Flexiple, a fully remote bootstrapped company with $3 million+ revenue. He is passionate about remote working and has also built Remote ToolsRemote Clan & Writer Alpha. As an influencer and an expert in the field of remote working, his contribution as a guest speaker in this blog is of high value for anyone who reads this article!

Before the Covid-19 pandemic, only a few people had any experience with remote working. However, this changed in March 2020 with the global shift to working remotely. Employees of tech companies everywhere started working from home and most of them have been liking the experience. In the US alone, the percentage of employees working from home 5 days a week has increased from 17 to 44 percent during the pandemic.

Although remote working has proved to be beneficial in many ways, we’ve seen companies have a mixed take on it. A lot of firms have gone back and forth on their decisions to transition to a fully remote working model. While on the one hand, CEOs of firms like Netflix and JP Morgan have opposed remote working, other companies are still figuring out various ways to establish a hybrid remote + office routine. 

As a whole, remote working has proven to be extremely beneficial to top companies as well as SMBs/startups. It has, in fact, proven to be quite crucial to the success of SMBs. So much so, that not adopting remote working could mean that smaller companies are losing out big time.

Is remote working that important when it comes to succeeding as a business? Well, for tech companies of all sizes, it definitely offers a huge competitive edge. In the below sections, we’ve highlighted why SMBs should not ignore it.

Why remote working is the competitive edge for SMBs

Advantage in hiring

Perhaps the most prominent advantage of working remotely is that you get to hire from anywhere in the world. A main driver of a startup’s success is the ability to build and retain a strong team. Given this, companies compete with each other fiercely to attract the very best talent in the market. Periodic reinvention of the status quo has been required in this regard in order to succeed. Hiring remotely is the only way ahead for SMBs.

Most tech companies have already started giving their employees the flexibility to choose where they want to work from. Not allowing this will leave you at the bottom of the choice for candidates. As an SMB, you’re most likely to be always on the lookout for good talent and would eventually lose out. You would also not be able to make use of tools created to improve hiring in the digital world.

Progressive approach

Can you imagine what would have happened to Microsoft or Adobe if they were still shipping software on DVDs instead of embracing cloud? In the early 2010s, a lot of individuals dismissed cloud assuming it would not become what it is today.

This exact thing will happen with remote work. Dismissing it would mean that you are eventually going to be using outdated methodologies. Startups are always reinventing the wheel and being deemed regressive wouldn’t be a pleasant thing. To stay at par with your competitors and even go ahead of them, adapting remote work early on would be the right thing to do. Most companies are actively adopting flexible work and SMBs need to stay progressive to grow

Better retention rates

If you are able to get good employees in spite of working in an office, keeping them would be a challenge. Remote workers enjoy the flexibility of working from any location they wish as well as saving up on commuting. Seeing their counterparts get such benefits while working remotely can be a big demotivator for your employees. Also, there is every possibility that they would get a good offer from a remote company and opt for it.

Established remote companies have some of the best retention rates globally. Gitlab, having started in 2014 and now having 1200+ employees, has a retention rate of 85%. This is better than even the likes of Payoneer (75% retention rate - 1500+ employees). This goes to show that even tech giants are losing out when it comes to retaining talent against remote counterparts.

A good, smaller scale example for SMBs would be Doist. Having a team of 100, Doist has a retention rate of 97%! The company has been fully remote since its inception in 2007 and hit a $14m revenue in 2020.

Keeping up with technology

Right now, most digital products are being made with remote working employees in mind. Software companies are focusing on tools that would positively impact collaboration among remote workers. 

Given this, if you do not adopt remote working, you would have to use software that is outdated and lose out on the features your competitors are enjoying. If you do use the latest tech, then you’d be unnecessarily paying office rent and using tech made for remote collaboration.

SMBs can’t afford to lose money on unnecessary costs. Neither can they afford to be behind their competition. To make the best use of the latest tech, SMBs would have to adopt remote working or fizzle out.

Improved productivity

Productivity in remote teams is much better than in a colocated team. Around 68 percent of employees reported an increase in productivity thanks to working remotely during Covid-19. 

Travel to workplaces could result in getting tired and decreased productivity. Both time and energy are saved in a remote environment. In an SMB, employees need to be on their feet all the time and get work done fast. This increased productivity should surely be leveraged by SMBs.

Also, If you wish to keep up with competitors without working remotely, you’d either have to hire more or increase working hours. The former would only increase costs and the latter would result in unsatisfied employees. Again, losing employees comes around to the earlier point on hiring and retaining employees, and is something that SMBs should avoid.

Negative impact of less work done

All of the above points would result in a net negative impact. For SMBs, speed of execution and delivery can be the deciding factor against competitors. However, not working remotely would mean that the work gets done much slower than others. 

This would have tough consequences on the company. Shipping features slower could result in your SMB losing out on clients, and constantly missing deadlines. If repeated, you could be at risk of going out of business entirely. Instead, working remotely would enable you to deliver on time and improve your client base.

Quality Investment in SMBs

Lastly, if you are a VC backed startup, then remote work will soon become a must to get good investors. Investors are always on the lookout for startups delivering quality output and adopting the latest trends. If you turn a blind eye to what’s happening around, this would make investors wary of your firm.

Joining the remote work revolution would be the only way to fit in, then, and it’s best that your SMB gets a head start into this. It would surely result in investor, employee and customer satisfaction.

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