Taso Du Val started Toptal (short for "top talent") when he saw just how hard it was for U.S. firms to find top freelance talent in tech. He knew from his prior work as a consultant in the industry that there were plenty of experienced and available coders, engineers and software developers around the globe.
So in 2010 he launched his company and decided to do it remotely. Toptal finds the best freelance engineers and designers from anywhere in the world and vets their qualifications using a blend of proprietary software and online interviews. Once a person is deemed Toptal-quality talent, they are given access to the company's digital platform, and clients — from start-ups to Fortune 500 companies — can then hire them for short- and long-term projects.
The company, which has grown to more than 400 core employees working in 60 different countries, was an early adopter of what is quickly growing to be the next big wave in work/life balance: the fully remote company. Today, according to FlexJobs, an online platform specializing in remote and flexible employment, there are approximately 170 companies in the United States that operate 100 percent virtually, up from 26 in 2014.
Among the largest are Automattic, AnswerConnect, InVision and Toptal. These companies have no central headquarters to speak of, and the majority of their staff works remotely — from a shared office space, home or even the local coffee shop. The other traits they have in common: incredibly low overhead, better employee retention rates and the ability to attract talent from anywhere in the world.
"When I started Toptal, I was working with people in several different countries right from the very beginning," said Du Val. "It didn't make sense to have an office anywhere."
There are several factors fueling the growth of these fully virtual companies, experts say. The most obvious is technology. Tools such as Slack, Zoom, Dropbox and Quip, a document-sharing and editing platform, make it easier than ever to communicate with far-flung employees and track their performance and workflow more accurately, said Trina Hoefling, author of Working Virtually: Transforming the Mobile Workplace. "Technology is the enabler," she added, "so people starting businesses are realizing that they can launch a company without a physical location quite easily."
But perhaps the bigger driver in this new way of working is the demand from employees for a better quality of life. According to Gallup's "State of the American Workplace" survey, more than one-third of the respondents said they would change jobs in order to be able to work remotely some of the time. Younger employees — so-called millennials — especially start their careers fully expecting to find a position that offers more flexibility in how and where they work. After all, they've grown up with screens of all types and are used to connecting with family and friends remotely.
Having that same freedom in their careers is just the next natural step in this trend. And with this demographic group projected to make up 46 percent of the workforce by 2020, companies are starting to listen. It's not that virtual companies are promising employees that they'll work less (in fact, knowing when to "unplug" is one of the biggest challenges of a remote setup), but rather that they can work smarter by eliminating energy-draining commutes and being more intentional about how the work gets done.
Mark Bosma, Toptal's vice president of sales, certainly agrees with that premise. He works from an office in his home in Sioux Falls, South Dakota, as does his wife. Bosma is quick to point out that routines, communication and the ability to prioritize are all needed to be productive, no matter whether you're working remotely or in an office setting. "The difference is that a higher level of self-discipline is required [with remote work]," he said, adding that once that's in place, remote work is typically more productive than an office environment.
"There are no office antics to distract you, lunch is just a few steps away, and the commute is less than 30 seconds," Bosma said. "This can all add up to a dramatic increase in the focus time available in a normal workday."
While younger workers more often expect the chance to work remotely, they are by no means the only ones pushing for it. FlexJobs partnered with Global Workplace Analytics to produce the 2017 "State of Telecommuting in the U.S. Employee Workforce" report. It found that the average telecommuter (someone who works from home at least half of the time) is 46 years old.
In fact, telecommuting is more common among employees over 35 and most common among baby boomers. And contrary to the belief that moms with young children make up the majority of remote workers, the FlexJobs report found that it's evenly split between men and women. "There is still this stigma that remote work is a warm and fuzzy benefit for employees or an accommodation for working moms," said Sara Sutton Fell, founder of FlexJobs.
5 most important attributes employees consider when deciding to switch jobs:
1. The ability to do what they do best (60%)
2. Greater work/life balance and better personal well-being (53%)
3. Greater stability and job security (51%)
4. Significant increase in income (41%)
5. Opportunity to work for a company with a great brand or reputation (36%)
Source: Gallup Inc. 2017 "State of the American Workplace" report
The reality is that there's a business benefit for both remote workers and the companies who offer it — whether they're fully remote or not. FlexJobs found that the ability to work remotely, even part-time can help employees achieve better work/life balance, which in turn helps to improve their health and wellness. It can also help workers save up to $4,000 a year with reduced spending on gas, parking, public transportation and dry-cleaning.
Companies come out ahead as well, Sutton Fell said. By increasing the number of employees allowed to work remotely, a company doesn't need as much costly office space. It also increases its chance of attracting and keeping the best workers — and can look for them anywhere in the world.
The remote model is not right for every company, of course. For some it's a practical concern. If a business doesn't have an up-to-date infrastructure or has spotty internet service, remote work is going to be more difficult. Certain jobs, like construction work or hairstyling, will likely always be done onsite. But for companies that can operate virtually, the ability to cut ties with a physical location can reap rich rewards.
"When a person is in execution mode, which is how most employees are 90 percent of the time," said Toptal's Du Val, "working remotely will always beat an in-office experience."
— By Susan Caminiti, special to CNBC.com