What Is a Virtual Employee? Pros and Cons of Working With a Remote Team
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Virtual employees and remote work are on the rise. Before the pandemic, 16% of employees worked remotely. However, a majority of office workers found themselves going remote during the pandemic. By March 2021, approximately 31% of workers expected to work remotely on a permanent basis.
Predictions about the state of virtual work vary from one study to another. Some bet their money on the rise of hybrid work, while others expects full-remote work for 25% of employees. Regardless, remote work in one form or another is here to say.
Read on and learn more about virtual employment. You’ll understand the kinds of virtual jobs companies hire, the advantages of hiring remotely, the disadvantages of doing so, the cost of virtual employees, and tips to adapt your management techniques to virtual employees.
What is a virtual employee?
A virtual employee (or a remote employee) is someone who works remotely for your business, using virtual means to communicate, perform tasks, and deliver projects. In other words, a virtual employee is an employee who does their job online.
A virtual employee is not the same thing as a virtual worker. Most independent contractors work virtually, but they are not technically employees. Employees work for one company, their employer, while independent contractors work with companies as clients. The difference may seem minor but companies interested in virtual staffing should be aware of the legal and tax implications of hiring either.
Learn more about the differences between employees and independent contractors.
Examples of virtual jobs
Nearly every job that happens in front of a computer can happen in a remote setting as well. Even jobs in industries long considered to be very traditional from this perspective can now be embraced in a remote (or at least hybrid) work environment. For instance, some types of health workers and higher education faculty staff can now work remotely at least part of their time.
However, certain jobs tend to be more popular among virtual employers:
- Graphic design: Tap into a global pool of creatives ready to create unique visual assets
- Customer support: Provide 24/7 and native-language support to customers
- Sales: Access a pool of motivated salespeople who can help your company expand internationally
- Software engineering: Move your web and app development online and across borders
- Social media and marketing: Join the 80% of marketing agencies who prefer hiring remote employees to be more productive
- Virtual assistants: Get flexible help with anything administrative, including data entry, entrepreneur calendar management, bookkeeping, and more
Pros of working with remote employees
Working with remote employees is more than just a fad—and the benefits have outlived the initial need because of the pandemic.
- Improve diversity: Remote talent pools are more likely to bring in more diverse candidates and a recent McKinsey study shows that diverse teams perform better, including from a financial perspective
- Avoid the cost of office space: Become a more cost-effective business by saving thousands of dollars each month on office space, office equipment, and utilities
- Increase global customer support time zone coverage: Virtual employees spread across time zones ensures someone is available to talk to your customers 24/7
- Improve work-life balance and motivation: Virtual employees can spend more time with family, cut out their commute, and schedule their work around life (not the other way around)
Cons of working with remote employees
Most office employees can easily perform their duties with real-time communication tools, asynchronous work, and video conferencing. But some jobs—most of which involve working with hands—don’t translate well into remote environments. Other downsides include:
- Feelings of isolation: Employees working virtually full-time amy struggle with loneliness and employee engagement unless your business prioritizes teamwork and an engaging employee experience
- Company culture can suffer: Without an in-person work environment, a remote staff can struggle to feel united
Check out our guide on building an inclusive company culture among your virtual staff.
How much does it cost to hire a virtual employee?
The cost of a virtual employee is more than the amount listed on their salary. On top of their paycheck, you will have to account for:
- Payroll taxes: FICA taxes (such as Medicare and social security), workers’ compensation, and FUTA taxes (unemployment)
- Employee benefits, which vary from country to country
- Overhead costs, including work from home stipends
- Hiring and onboarding costs
- Situational variables like the employee’s location, industry, market condition, your company budget, and so on
Learn more about how to calculate the cost of an employee.
What makes a good virtual employee?
A good virtual employee shares most of the traits of a good in-office employee. Don’t overthink the impact of remote work during the hiring process; it’s enough to have a conversation with candidates during hiring to learn whether they’re enthusiastic about remote work.
That said, your company management should prioritize training employees to succeed in remote environments, especially for first-time remote employees or people struggling with feelings of isolation or self-management.
How to hire virtual employees from other countries
Hiring virtual employees from other countries requires more than picking a candidate on LinkedIn. International hiring is legally complex because you must comply with labor and tax laws wherever your employee lives, regardless of your company’s location.
Companies have two options to hire virtual employees in other countries:
Open a subsidiary in worker’s country
Opening a foreign subsidiary requires creating a new, legally independent entity in your employees’ country. This is an expensive and legally complex process and is nearly impossible to scale if you want to hire employees in multiple countries/
However, opening a subsidiary in another country is not without benefits. One of the most important ones is that subsidiaries enable you to have a fully operational business in a new country, which can be an asset when you try to break into a new market.
Use an employer of record (EOR)
An EOR (employee of record) is an outsourcing company that will hire a virtual employee in remote locations worldwide on your behalf. The EOR generates a locally compliant employment contract, administers benefits, and runs global payroll and takes full legal responsibilities for the employees.
An EOR is a simpler, hassle-free method of tapping into the global pool of talent for better pricing than opening a local subsidiary. You will not have to worry about complex tax laws in another country or understanding the global benefits you must provide. The EOR will do this on your behalf.
Hire foreign independent contractors instead
Hiring foreign independent contractors is another option that’s significantly less complex than hiring foreign employees. Consider hiring a foreign contractor if you need:
- A freelancer for short-term projects
- A part-time contractor arrangement with no fixed hours
- Someone on call to provide irregular support
You can hire an independent contractor by sourcing them on LinkedIn, freelance job sites (like UpWork), or via your personal network. When hiring international independent contractors, ensure you:
- Have your Employer Identification Number (EIN) handy for tax form
- Comply with your state departments (i.e. register your company in your state)
- Classify your workforce accordingly (remember that the IRS is very thorough with their analysis of who is a contractor and who is an employee)
Check out our piece on hiring foreign independent contractors here if you want to find out more.
7 tips to manage virtual workers
Managing virtual workers is extremely similar to managing in-office workers. However, just as in the case of everything relating to remote work, there are particularities you will need to keep in mind.
More specifically, you should learn how to:
1. Lean into asynchronous communication
Async communication and collaboration are key to developing productive, efficient relationships with your virtual employees and contractors. It also reduces Zoom fatigue and micromanaging.
You can't require someone living on the other side of the world to be online at 3 am, so you will have to:
- Create clear tasks and deadlines
- Set up documentation easy to access by everyone regardless of location
- Set up a flexible communication policy
- Use tools to promote collaboration (Google Drive, Slack, and Asana tend to be very popular)
2. Develop efficient processes and robust documentation
When everyone is working from different locations, clear and concise documentation and processes are paramount. Remote project management requires exceptionally clear documentation because coworkers may not be online or available to answer questions.
3. Ask for and listen to feedback
Nobody reads minds. If you want to know how your team members feel or what they are thinking, you will need to ask them directly. And once you do, you’ll have to make sure you listen to their feedback and take it into consideration.
Running regular employee satisfaction surveys and setting up regular one on one meetings can make the difference between a remote team that works and one that drags.
4. Give them the tools they need to succeed
If you want your remote employees and contractors to be productive and efficient, give them the tools they need to do their job properly.
This includes everything from a fast internet connection and a quiet place to work, to the right software for the task at hand and access to the company's knowledge base and internal guidance and expertise.
5. Consider a work-from-home stipend
A work-from-home stipend is a set amount of money that your company offers to each remote employee to help them cover the costs associated with working from home. This may include money for equipment, home office furniture and set-ups, co-work space rent, utility bills, and so on.
6. Encourage social interaction and virtual team bonding
Just because your employees are remote, it doesn't mean they can't socialize and bond with their co-workers. It's important to encourage social interaction and team bonding, as it will make everyone feel like they're part of a community and not just another cog in the machine.
You can set up regular social events, such as book clubs, online game nights, or virtual coffee breaks. You can also encourage employees to interact with each other on company-sponsored social media groups or forums.
Check out our list of 40+ remote team bonding activities.
7. Offer flexible working arrangements
Flexible working arrangements are becoming increasingly popular, and for good reason. They allow employees to have a greater degree of control over their work-life balance, which can lead to higher levels of productivity and satisfaction.
Trust your employees to finish the work you assign on their own time, not necessarily during the traditional 9-5. Your employees will appreciate this trust and flexibility and will often deliver better results and stick with your company longer because of it.
Hire virtual employees worldwide with Deel
Hiring virtual employees does not have to feel like a chore, nor does it have to be a confusing entanglement of legislative nuances hard to grasp. The world is full of opportunity, and your company should have easy access to the best talent there is—globally.
At Deel, we make hiring virtual employees virtually painless, whether you’re hiring in Peru or the Philippines. Our platform makes international employment and payroll easy to understand and handle.
Book a demo today to see how to build an international team with Deel.