On-Site vs Remote vs Distributed Engineering Teams:

What to Choose?

Among the most significant trends affecting the technology industry is an increasing possibility to hire remote developers and the availability of efficient tools that enable it. Business owners have a significant advantage over their colleagues who did not have this opportunity a few years ago: access to the wider talent pool for price/quality ratio, on-demand scaling, etc.

Let's assume you are a business owner who runs a tech company and you are faced with expanding your team to meet your client's needs. Sounds like something that could happen, doesn't it? You have a few options: hire worldwide or if you prefer to have full control over your project, choose a traditional approach to hire on-site. What to choose? Let’s discover!

In the article, we compare on-site, remote, and distributed engineering teams to understand the differences between them, and discover the benefits of each approach so you can decide which is the best fit for your company.

Remote as a New Normal

2020 has accelerated the shift toward remote mode. Business owners have had to adjust to the changing landscape, with many employees working from home.

Advances in technology are another factor contributing to the rise of remote making it more accessible and practical for both employees and employers. It’s become clear that this working model is the future of the industry:

• According to Global Workplace Analytics, the number of people working from home has increased by 140% since 2005.
• In 2021, the number of remote workers increased by 44% compared to pre-pandemic levels.
• 8 in 10 people are working hybrid or completely on remote.
• ADP Research Institute states that remote workers are more optimistic (89%) than their on-premises colleagues (77%) and have more job satisfaction (90%) than those that commute to the office (82%).
• The survey of 32K employees across 17 countries found that 64% of them would look for a new job. 52% are ready to accept up to an 11% pay cut rather than return to the office full-time.
• 62% of workers feel more productive while working remotely
• In 2022 the number of workers preferring the remote mode went up 24% and hybrid work went up 16%. Those choosing to work on-site dropped by 24%.
• A hybrid model is expected to reach 81% by 2024 compared to 42% in 2021.

Source: Owllabs

Defining Team Models

The main difference between on-site, remote, and distributed engineering teams is their physical location. Typically, software development teams have shared a workspace to increase collaboration while other types can work on the same goal from different parts of the world.

Dropbox defines it in the following way:

“Remote work is a discipline for the individual worker, but distributed work is a discipline for the entire organization. From a distributed work perspective, a company is just a collection of resources aligned on a common mission.”

Now let’s move forward to discover details and which option is better for you.

On-Site Teams

On-Site Engineering Teams refer to a collaborating model when everyone works at the same physical location, typically at a company's office. Members of an on-site team cooperate in person, making it easier to build personal relationships, resolve challenges, and ensure everyone is on the same page. Well-known examples of this model are

• Apple Inc. - all engineers at Apple's headquarters work in the same office space, collaborating and communicating face-to-face on a daily basis.
• Google - has a large campus-style office, where all engineers work together in close proximity.

Benefits for clients

On-site engineering teams offer several benefits to clients, including direct interaction, and enhanced communication as everyone is located in the same location. Also, on-site developers can resolve issues more quickly, as they have direct access to clients and all the necessary resources. And have access to specialized software (if needed) that might not be available to remote teams. Last but not least, they are easier to secure and monitor, reducing the risk of data breaches and other security threats.

Remote Teams

Remote engineering teams work from different locations and don’t have to be physically present in the office. Remote teams usually have a central office that they can use as a working space. Remote teams can face challenges, such as maintaining a sense of team cohesion and ensuring that everyone has the necessary equipment and technology to do their work. As an example of this approach, we can highlight

• Amazon Web Services - which has a large remote engineering team, with engineers worldwide working from home or remote offices.
• GitHub - GitHub has a fully remote engineering team, with engineers located in different parts of the world, working together through online collaboration tools.

Benefits for clients

With the possibility to hire remote developers anywhere in the world company owners get access to a larger pool of talent, lower overhead costs, and increased productivity.

Distributed Teams

Distributed engineering teams are spread out across multiple locations and time zones. This type of team structure is often seen in global companies where engineers are located in different countries. An example can be a group of technical experts that work in different locations, but each was hired because of a specific skill set or experience.

Just like remote teams, distributed teams face challenges, including coordinating work across different time zones and overcoming possible language barriers. Even more, tech executives doubted such a model of cooperation as it goes directly against some of the key principles of agile development (namely the importance of face-to-face communication). Though recent advancements in technology (a variety of communication platforms, etc) eliminated these doubts.

Companies that employ this approach:

• Microsoft - Microsoft has a mix of on-site and remote engineering teams, with engineers located in different parts of the world, working together through virtual collaboration tools.
• Dropbox - Dropbox has a mix of on-site and remote engineering teams, with engineers located in different parts of the world, working together through virtual collaboration tools.

Benefits for clients

The decision to hire remote developers with diverse backgrounds brings numerous benefits for your team (e.g.reduced salary costs and a fresh viewpoint on problems). Diverse teams are 60% better at decision-making, and diverse companies are 35% more likely to have profits above their competitors.

Factors to Consider

The choice between an on-site, remote, or distributed team highly depends on the company's specific needs and priorities. There is a list of factors you should consider before choosing a best-fit approach:

Project Requirements

The type and complexity of a project will determine the best type of engineering team. An on-site team may be more effective for projects that require close collaboration and communication. Remote teams may be a good option for projects that are less complex or require more specialized skills.

Business Goals

Consider your business need and the objectives you aim to achieve. A distributed team may be the best fit if you need to access a diverse pool of talent and extend your in-house development. A global network of experts can result in faster time to market, and improved project outcomes.

Hiring process

This process also varies in the context of different team models. On-site teams are a bit limited geographically and you have to manage recruitment and onboarding processes on your own. Another opinion is to delegate it to professionals who have already a team of potential candidates for the price/quality ratio.

Cost Efficiency

Consider the costs associated with each type of engineering team, including office space, equipment, and other employee benefits. Companies can significantly decrease their overhead and operational costs if they decide to hire remote developers.

Flexibility

Unless you are hiring engineers for the long run, you can embrace on-demand team scalability in changing your team’s composition throughout the project. You can start with a small group and expand it as development gets more demanding and vice versa.

Final Thoughts

Remote has become a trend that is to stay in the tech industry, as it offers significant benefits to both companies and engineers. These trends are helping to drive innovation and increase efficiency, and are likely to continue to shape the future of work in the technology sector.

Distributed teams model offers even more benefits, as they allow companies to tap into a wider pool of expertise and flexibility from engineers located around the world. The use of digital tools and agile methodologies helps ensure that distributed teams are able to collaborate effectively and deliver high-quality work in a timely manner.

Embrace all the benefits of hiring globally with an experienced development team.