Rachel Emma Silverman’s article, “Step into the Office-Less Company,” discusses a new kind of company where employees work from home.  Automattic is an example of one such company in which employees use social networking, cloud storage, and video conferencing to communicate with one another.

While Automattic does have an office in San Francisco, the company heavily relies on internal blogs rather than traditional office buildings.  Because of this, Automattic is able to reach out to a larger and selective workforce regardless of workers’ location and timezones.  This also allows work to be completed at any hour of the day, while the company saves enormously on real estate costs.

Companies like Automattic claim that employees are more effective in this type of environment without interruptions, but also complete work with less instructions.  While only 2.5% workers currently work from home, this new type of company is still worth noting.

For further discussion, the original Wall Street Journal can be accessed here as well as read below:

The Web-services company Automattic Inc. has 123 employees working in 26 countries, 94 cities and 28 U.S. states. Its offices? Workers’ homes.

At Automattic, which hosts the servers for the blogging platform WordPress.com, work gets done wherever employees choose, and virtual meetings are conducted on Skype or over Internet chat.

The company has a San Francisco office for occasional use, but project management, brainstorming and water-cooler chatter take place on internal blogs. If necessary, team members fly around the world to meet each other face to face. And if people have sensitive questions, they pick up the phone.

Having a remote workforce lets companies tap into a wider talent pool not limited by geography. Firms can also save money on real estate, though sizeable travel budgets may partly offset that.

Nobody knows for sure how many completely office-less companies there are or how fast their ranks are growing, but management researchers say such firms are still rare. Today, just 2.5% of the U.S. workforce considers home its primary place of work. But that number, which is based on census-data analysis, grew 66% from 2005 to 2010, according to the Telework Research Network, a consulting and research firm. And increasingly, employees at companies with physical offices are choosing to work remotely or forming virtual teams with colleagues world-wide, thanks to rapid advances in video, social-networking, cloud storage, and mobile technology.

Lori McLeese, who heads Automattic human resources, says that its hiring and orientation processes are key to creating a cohesive culture. The company requires top applicants to work on a trial project for a few weeks to see if they are a good fit. New hires, regardless of position, must work in customer service for three weeks to create a unifying employee experience and have direct customer contact.

The company lives by a philosophy of “overcommunication,” says Ms. McLeese, to help proactively quell any misunderstandings and provide workers with direction. Employees mainly transmit messages via internal blogs, dubbed P2s, which also act as a virtual water cooler. When misunderstandings occur with text-based chats, participants are encouraged to pick up the phone.

But because staffers are in so many time zones, work is often done asynchronously. Team members work their own hours—the company has a lot of night owls and early risers—to meet project deadlines. If someone misses the mark, the team leader or another staffer will reach out to the employee to figure out what went wrong.

The company also organizes regular face-to-face get-togethers of teams, allowing workers to fly to meet each other in convenient locations, and an annual, week-long “grand meetup” for all employees. Ms. McLeese says that after long stretches without seeing each other face to face, the meetups can be emotional. “People are giving each other hugs at the airport,” she says.

Mat Atkinson, the chief executive of the design-review software company ProofHQ, says that managing “distributed” teams requires 25% more effort than a face-to-face team would because managers must pay closer attention to whether workers are motivated and fully understand tasks and business processes. “There isn’t the opportunity to just pop into someone’s office,” says Mr. Atkinson, who is based in London and has 32 staffers based in 17 cities around the world.

But Mr. Atkinson says that employees are more productive because they have no commutes and fewer interruptions. And he says that being virtual costs about 50% less than having fixed real-estate costs.

Kalypso LP, an innovation consulting firm, has 150 employees around the country and in Europe but no corporate offices, says founding-partner Bill Poston, who works from his home in Boerne, Texas, when he is not at client sites.

When the firm was founded eight years ago, Mr. Poston says the decision to go office-less was financial. But now, being virtual is a matter of choice, though he points out that the company isn’t a good fit for people “who are uncomfortable with ambiguity.”

Mr. Poston also says that employees are far from isolated. Workers communicate constantly via instant messaging and email. And teams of consultants see each other almost daily when meeting with clients. The company also flies employees to an annual meeting in September, and it transports workers and their families to “family fun” weekends every June. In addition, employees can fly to meet each other whenever necessary.

Not everyone believes in virtual companies. Last year the founders of Zaarly Inc. debated whether to operate virtually or open an office for the fledgling online marketplace for local services.

The firm opted for the latter, says Shane Mac, director of product for Zaarly, which now has 43 employees, most of whom work in the company’s San Francisco-based office.

Although the firm has some remote employees, Mr. Mac says that making decisions is faster when someone is sitting next to you, and it’s easier to keep employees in the loop and brainstorm together over a whiteboard. “You can’t create true serendipity over IM,” he says.

To find out more information on this topic, contact the author of this article, Rachel Emma Silverman, at rachel.silverman@wsj.com.