Virtual Employees: Cost Benefits
October 26, 2020
Nowadays, many small and mid-sized businesses are hiring virtual employees that help them to run their office set-up more cost-effectively. While some virtual employees perform routine and specific tasks, others have the experience and training to perform complex technical, administrative or professional tasks such as Bookkeeping, Accounting, VAT, Payroll, Tax, etc. They can even be trusted with confidential and complex jobs and expected to deliver results on time.
Thus many new and small businesses find that virtual employees offer the best solution for a variety of jobs. So, if you’re overloaded with work but aren’t ready to hire more in-house employees, then you might want to explore the benefits of hiring a virtual employee.
Let us look at who is a Virtual Employee:
An employee who works full-time or part-time for a business from a remote location is known as a virtual employee or a remote employee. It is a common tendency for people at large to confuse virtual employees with freelancers. But they are not the same.
Virtual employees work for a single employer i.e. for the business that outsources its work. This gives the business more control over various aspects of their job that is outsourced to the virtual employees, from what tasks they do to how much they’ll be paid for it. Virtual employees are like regular employees, but they are just not physically present in your office. Sometime they might be in a different country altogether, so there are no restrictions as to who or where they are. The only important criterion is that they should carry out their duties well and just as you requested.
However, freelancers are self-employed individuals who usually work for multiple clients at the same time. An employing business doesn’t have much control over when the outsourced freelancer performs their work and who they work for.
Hence, increasingly more businesses are becoming aware of the advantages of hiring virtual employees and outsourcing some of the tasks outside of their physical office.
Various cost benefits of hiring a Virtual Employee:
No need to pay large salaries and other employee benefits:
As a business owner, do you break into a sweat every time you pay out that large monthly salary to your in-house employee? If the answer is yes, then it is time to go virtual. Several studies have shown that a virtual employee is up to 50% less expensive than an in-house employee. In addition to salaries, there are annual increments, pensions, gratuity, sick leaves, medical benefits, health insurance, national insurance contribution and also maternity leave to worry about.
On the other hand, virtual employees work as independent contractors. This means you pay them a fixed fee as per the agreement that has taken place between you and the KPO firm.
You pay for their work only:
By hiring a virtual employee, you save on employee expenses such as paying for their off-time – holidays and vacations. Nor do you have to bear costs or expenses other than the compensation work. You can hire them to perform a specific job, pay them for their time, and that’s it. Think of all the money you’ll save that can be used elsewhere in a better way!
Low In-Office Costs:
When you hire in-house employees, you have to take care of various expenses such as technological expenses - internet connection and software, office supplies, heating and air conditioning, maintenance costs, miscellaneous expenses like food and beverages, etc.
For virtual employees, you might only have to provide them with the software required for the job and nothing else. So, Significantly reduces the costs or expenses you’ll have to bear after hiring them.
Huge Savings on Real Estate:
Every business finds avenues to save money, and hiring virtual employees who work remotely will do that for you.
Real estate costs usually form a huge chunk of a business’ overall expenses. So, if your company wants to hire in-house staff, this means expanding your office space or moving to a different building entirely with higher rent costs.
According to many studies, businesses could save on an average of £7,000 per employee per year in real estate costs. Expand that out to a 10 to 15 person team, and you’re talking serious spending money. Hence, as a business, you would save a lot of money on rent and expansions when you hire employees that work remotely.
Reduce Employee turnover:
It costs a lot to replace an in-house employee. According to some estimates, replacing an in-house employee making £30,000 per year will cost your business 20% of his or her salary. Jobs that need high levels of education and training will have even higher turnover costs. By hiring a virtual employee, you are going to eliminate all such costs and save a lot, which can be used for expanding your business.
Value for Money:
Why hire a qualified professional on a full-time basis when you can hire a virtual employee for a lot less? It’s just smart business sense. Also, every virtual employee brings specialized skills and their own experience, which is highly invaluable for a business owner.