The ugly downsides of running a remote team

Erin Distributed teams, Dreary business details, Hiring, Running a business 0

Don’t get me wrong. I love our remote team. I feel like we’ve put together an awesome group of the best talent we can find across the country. Everyone’s an awesome communicator, so getting the point across is just as easy when we’re 1,000 miles away as when we’re across the table from each other.

But as a business owner, I’ve learned there are some logistical hurdles to managing a remote team.

  1. Health insurance. We have people in many, many different states. Some insurance companies will cover lots of states, provided you have a critical mass (i.e., 50% of your staff) in your home state. But who wants to be constrained like that? I don’t want to be presented with the option of an awesome developer in Montana or a mediocre one in Utah and have to choose the Utahn because it keeps our balance over 50%.We insure through United Health Care, because it was our only option for nationwide care. Fortunately, it’s a good plan that we can enjoy.
  2. State taxes and registration. This might seem like a no-brainer, but every time you bring on a new employee in a new state, that means you need to fill out that state’s specific tax forms. Some states are pretty simple, others are a pretty big pain in the butt. (DC, I’m looking at you). Some of them require that you fax in your forms, others have online forms that require Internet Explorer (WHO DOES THAT??). It’s a big mess.
  3. Payroll service fees. We use Intuit Payroll. For every new state we add an employee, we add an extra $9 to our monthly fee.

The alternative to all of this is to hire a PEO (professional employer organization), a getup that becomes a “co-owner” of your company in charge of HR. You’ll circumvent all of these problems, but you’ll pay for it. The last quote I got was $155 per employee per month. Since these problems are mainly up-front issues (once you figure out your health insurance and register your business with the state, you’re mostly done), I don’t think it’s worth the additional monthly bill.

But I’m certainly motivated now to hire someone in Missouri, DC, Florida, Maine, Oregon or Utah.