Deciding between an Employee, Outsourcing or a Virtual Assistant
Your business is growing and growing. You are swamped with tasks to do. You need things done that you are unsure how to do. There are so many things you need done: You decide it is time to hire someone to help you. That is wonderful but what type of worker is actually best for you?
Are you considering hiring the typical “employee”? Have you considered outsourcing some of your needs to contractors via Fiverr, Guru, Outsource or Upwork? Maybe you are considering hiring your own Virtual Assistant… Let’s go over the difference between the types.
The Typical Employee
This is ideal for brick and mortar stores, including service and retail businesses. Examples: you walk into your doctor’s office and there sits a nice young man to greet you and sign you in (receptionist). It’s lunch time, the cashier that takes your order, the waitress that servers you and the cook preparing your meals are all typical employees. You share in paying some taxes, they work on a schedule and they get a W2 at the end of the year.
Do you need an “employee” if you work from your home?
If you have, let say an air-conditioning service business and you have grown tremendously. You are finding yourself working 12-15 hours per day. You take all of your calls (on your cell), you do all of your billing (when you find the time) and you perform all service calls and bids …well you do everything. You decide you need help. If you decide another AC service tech is the best option for you, he would normally be an employee. It would be somewhat difficult for him to work virtually (HAHA), if you were to contract him, he may not share the same loyalties for your business.
The benefits of having a typical employee
For starters, they work for YOU, normally exclusively. They work on a set of hours based on either the operating hours of the business or a schedule based on the business needs. The wages, the benefits and the taxes you pay are typically tax deductible. Yes I put “typically” in there, always consult with your accountant for your state and local rules.
The cons of having a typical employee
The biggest complaint I receive from my clients is TAXES! Although they are tax deductible, when my clients add up the employee wages and all the “other” taxes paid on behalf of the employee they freak out! Yes, there are taxes you pay over what you withhold from their paychecks. They will vary from state to state, even some on a local level but there are additional taxes employers pay for having employees.
Outsourcing and Contractual
The two are very similar in nature and would vary depending only on where you read or what you research. Depending on the tax laws, they typically receive a 1099 at year end for what you have paid them. There are many benefits from outsourcing projects and hiring contractual laborers.
Let’s use the AC business example from above. We have already determined he is growing rapidly. What if you won a bid to install all the new AC systems on a huge mall coming to your town. This contract is for the installation only, the individual leasors can chose their own maintenance company, which would be several months or even years down the road. However, you know there is going to be several weeks to perhaps a few months of massive installation. It might not make since to hire a dozen new employees only to lay them off once the job is complete. If you chose contract labor, they bring with them, their employees, experience and equipment normally for one flat rate. This makes budgeting much easier.
What if the new contract required all your employees or workers on the site wore a certain color shirt. Or maybe you just want to start advertising. Either way, now you need a “one time” graphics designer for your new t-shirt. Maybe you want a website just to tell people about. These are ideal situations for outsourcing. Some even outsource general labor to “temp” or “Virtual Assistant” companies.
Yes virtual, meaning they don’t come to your office and clock in every day but yet they work for you! In today’s era so many businesses have adopted the virtual work force. Your own personal VA can do so many things. Here’s actually a list of the 10 most popular VA tasks. Some perhaps have virtual employees (your W2 folks), other use VA staffing companies and some, especially your small and home based business use virtual assistants of their own.
Allow me to expand a little on the differences
Our insurance company, several years ago, stopped using their call center at the corporate headquarters. I was not aware since I called the same 800# as always. The representative helping me apologized for the “weather” creating an issue with our call. I said “what, I’m only an hour south of you, the weather is fine here”. She explained she was literally three states over and works from her home. These customer service calls are forwarded from the 800#, the same way as they were in the call center.
Other companies, like publishers made a move a few years ago to allow their staff to work when it was best. This allows them to be more productive, of course as long as deadlines are met. Some have weekly or monthly meetings at the office, some are only using live virtual group meeting services once or twice a week. Regardless if the pay structure is a W2 or 1099 earner, the concept has gone viral.
Today with the use of cloud services and so many technological advances, there are some positions that allow one to work from anywhere in the world at any time of day. Let’s use the AC business again. You could hire a VA to answer calls, schedule service calls, set up meetings with prospective jobs, manage your accounts receivables and payables, even maintain your website and social media accounts. As you see, you could actually utilize VA services to manage many necessary tasks.
There are issues with any type of worker you decide to hire
Many of my clients and followers ask constantly when is a good time to hire and which type worker do you hire? This can’t be answered in a blog post. Your circumstances are different than another’s and they frequently change. I welcome you to contact me and discuss things further so your actual needs can be determined based on your situation.
Did this help you Decide between an Employee, Outsourcing or a Virtual Assistant? Please drop a comment and let me know. Since sharing is caring, feel free to share, I know you know someone trying to decide too.
PS – Are you using LinkedIn, the number one business networking site in the world? Learn more on how to make your profile stand out here.