What are the considerations as we consider employees that would work remotely? I'm particularly thinking about technical positions (programming, web site maintenance) that are remote due to geography (workers living in another part of the U.S.).
I am interested in actual experiences as an employer or employee rather than just opinions.
Check out Outsourcing vs Offshoring and make sure to read the comments though many of them focus on offshoring rather than hiring employees within the US.
I've done both successfully. It's a complicated topic, but here are the key points.
The good news is that since these guys are in the US, the timezone difference is not going to be significant, there aren't major cultural differences, and you can easily fly and meet every few months.
One of the main things you have to consider when hiring remote employees is the fact that isolation can sometimes make it hard for them to stay motivated, however a lot of technical employees (programmers, web gurus, etc) like it that way and like the fact that they can do their job just about anywhere. As you interview employees make sure they are self motivated individuals. The risks are higher if you hire someone who has not worked remotely before and would be better off hiring ones who have proven that they can do it effectively.
I haven't had any experience hiring someone in the same country remotely, but I have once hired someone from another country to do programming works.
From my experience as the employer:
If you are going to hire programmer remotely:
When hiring remote workers, make sure not managing them yourself. You need to first hire a lead in the remote location. You build full trust with the lead and then let the lead handle all the remote employee hiring. You only deal with the the lead. At the end of the day, it's pivotal to have full trust between you and the remote lead to get things work out.
Flexible hours in general make sit much easier to hire people and get the best out of them. The main issue is trust and organisation and avoiding people feeling isolated. It is worth meeting up monthly to set agendas/keep people involved.
Lots of great answers! I would like to address the issue of cost.
There is often a perception of cost savings in the hiring of employees from markets that command a lower competitive wage. Don't stop at wage when you do your cost comparison before you put "cheaper" into the pro category.
There are often significant costs associated with remote employees that don't show up in the employees W2 -- and are often only apparent later.
We have all worked with "off-shore" development teams where the project needed to add additional onsite project management and had to put feet on the ground to get the project done on time/budget. We have all worked with "off-site" customer support teams where additional cost were incurred for training to maintain standards. None of these costs showed up in the original bids or calculations.
It may be that the 20% salary savings ends up stretching the budget further. My experience has been that too often we forget all of the additional costs and find that those perceived saving never materialize.
Dror covered it pretty well. If you're interested in hearing the perspective of a startup founder who deliberately chose to go with remote employees, I did an interview with Jared Goralnick of AwayFind.com on this topic recently: http://wideteams.com/interviews/podcast-25-jared-goralnick-of-awayfind-com/
This has been a great thread. The prior posters have covered most of the pros/cons. I'd add another dimension: the ability to influence your employee/contractor's reputation. If they're in another country, for example, how much downside is there for them in terms of their career future if they don't put in an appropriate level of effort? In terms of their personal network and their business network, what's their reputational risk if they * you over?
Make sure you hire good and self motivated developers. Good to use some freelance provider like Odesk. I'm working through it as freelancer and I can tell that it's good for both freelancer and for business too. Since you can see how someone works, see his review before you actually hire the contractor and find the best one for your project.
From experience as both a remote worker and a remote employer, I think you need to look at your business practices to get the best out of the situation. Structure is the key to a successful remote employee situation. Remote working has been best for me both as an employer and employee when the work is structured much like a contract (ie 'you have these 3 things to do, in X amount of time. We'll meet daily/weekly to check progress').
Make sure you have a great system for assigning work. That includes assigning a reasonable amount of work (not too much, not too little) in either daily or weekly units. Meet via Skype per unit of work to ensure the issuing instructions are clear and to get feedback on progress and completion.
Seek very regular feedback from others who are supposed to be in communication with the remote worker - is the communication happening? Is everyone involved hitting their marks?
Some of the best things about hiring remote workers can be the productivity gains (fewer meetings and generally they have a better environment in which to 'get in the zone') and the chance to get a great person on board.
On the down side, getting the right person in the right environment is hard. Too much isolation is bad for anyone, but too many distractions (eg working from home with kids around) is a focus killer.
As an employer you have the right (and the obligation) to ensure your employee is working in an environment that is conducive to them doing their best possible work. That may mean renting desk space for them in an office in their town, rather than working from home, or arranging non-standard hours. Dont' underestimate the effort required by the employer, not just the employee in order to make it work long term, but having said that, dont' let it put you off. I've been remote for 4 years now, and work in an office 1 day a week. I don't think I could go back to 5 office days ever. Remote rocks!
The biggest problem you'll find is that a lot of remote workers suffer from what is commonly knhown as laziness and procrastination syndrome. You can't see them working, they could be working on their own projects and cramming all their work in a bit later. You can't really supervise a remote worker.
Although supervision is a bit imposing for most, the temptation to procrastinate when working at home increases by about 60%, unless you're a true dedicated worker (but everyone has a little procrastination inside waiting to come out).
I've been working from home for the past 6 years, it takes a great amount of disincline. From the employers point of view it takes very active management and close attention to when the motivation of a worker drops, since a worker can sit around bored for weeks and you only notice it after the delivery date slip.
It's about taking an active interest in and caring for your employees.