The Challenges and Rewards of a Virtual Workforce

Last January, Jennifer Lyle, the founder of Software Testing Solutions (STS), met one of her oldest employees for the first time. Lyle had worked every day with Alice Smith for more than four years, but the two had never shaken hands. For the other employees at STS it’s the same. They meet every week and work together on a daily basis. But they might see each other in person once a year, at the most.

Jennifer Lyle crafted her company to be “not your traditional corporate America,” and it appears to be a winning formula. Without a corporate headquarters, employees work in close collaboration, building the software product, presenting to clients, and plotting the course of the company’s growth, without ever being in the same room (let alone the same state).

STS has helped pioneer the field of medical device testing, with more than $1 million in revenue in 2007, and a consistent growth rate of 30 percent. The company creates software that automates the testing of laboratory and blood bank computer systems, helping hospitals ensure greater levels of patient safety.

Founder Lyle believes that teleworking not only reduces overhead costs, but also allows her and her employees to bring more energy and creativity to their professional lives by allowing time for pursuing other passions. That said, it's not for everyone.

Lyle, in fact, faces a number of key challenges: finding the right employees for the job, and creating the right systems and management structure to support the business.

Management: Not having employees in-house can be problematic. "Some people really need the daily person-to-person contact that a conventional workplace provides," says Lyle. She overcomes this challenge by fostering a strong team environment with constant communication. Under Lyle’s management philosophy, everybody leads and everybody contributes. STS has a profit-sharing model where each member is rewarded based on the levels of success the company achieves. Last year STS handed out $18,000 to $20,000 bonuses to each employee. Each team member is also invested in the personnel management process by having a say in who’s hired and fired. Lyle says that sharing the management responsibilities – and rewards -- helps each employee feel more invested in the success of the company.

“When one is looking at the five-digit bonuses we try to achieve, it’s much more like being an entrepreneur rather than an employee – each team member shares in the success and in the failure,” says Lyle. “It promotes ownership of our results and personal accountability.”

Group dynamics: STS hires self-disciplined high achievers who are excellent individual contributors. They must be self-motivated and work hard at verbal and e-mail communications skills in order to thrive in the remote work environment. They also need that self-motivation and discipline to be able to work productively from home.

“The staff here feels empowered to do things – to make things happen and get things done,” Lyle says. “And because they are all high achievers, when they work together we get an amazing team result.”

Company meetings: STS employees “meet” every Monday on a conference call. Briefly, they tried using video cameras for their weekly meetings, but quickly came to the conclusion that it didn't fit the work-at-home ethos – people felt obliged to make themselves presentable to the camera. Lyle points out, “One of the best things about working from home is that I can do my job with my hair in a pony tail, no make-up and have bunny slippers on my feet and nobody cares!”

Although technology allows STS employees to stay in close contact, Lyle knows there’s still value in person-to-person contact to reinforce good group dynamics. She has started holding an annual team-building meeting so everyone can plan and play together. In January, 2008, Lyle and her team members got together in Tucson for several days to set the company's future goals.

Giving back: Lyle recognizes that employees will work hard in exchange for the most valuable reward: time for their own personal interests. Employees get paid time off for all major holidays, along with 15 days of paid time off per year. She also encourages employees to get active in their own communities. Each employee gets an additional week of paid time off each year for volunteer activity.

Lyle also offers her employees incentives for work/life balance including “weekend escapes” and gym memberships and other activities to promote physical exercise. STS also provides matching contributions for employees wishing to give to non-profit organizations, and the company as a whole donates a portion of the profits each year to a charitable organization of the group’s choosing.

STS has thrived under Lyle’s management structure, with profits expected to reach $2 million this year. Her real challenge will come, however, as she tries to grow her small employee base, now five full-time employees, to 25 employees and $10 million in revenue by 2010.

“We hire people who want to work hard, do good, have fun and make money – people who believe that these things are not mutually exclusive,” Lyle says. “We don’t need layers of management to manage these people – we need to get out of their way, let them innovate and collaborate; and the end result is something really amazing. In order to keep this level of performance, you have to encourage balance. Work is important, but family and health and fitness and charitable work are equally important. I think this really helps keep work fun – even during crunch times.”