Rising operational expenses, talent shortages in local markets, and the need for round-the-clock productivity often hinder growth and efficiency. The Virtual Employee (VE acronym) model offers a compelling solution to these challenges.
This article thoroughly explores virtual employee meaning, covering its VE definition, benefits, challenges, and the tools and strategies needed for success. We’ll also examine use cases, hiring methods, and the future of virtual employees in the global workforce.
What Is Virtual Employee: VE Model Key Characteristics
Virtual employees are staff members who work outside your office in the same or a foreign country. Whether they are an in-house hire, independent contractor, or freelancer, this person commits to your company by signing a contract where you specify the scope of tasks and working hours.
VE Definition
A virtual employee (VE) is a remote professional hired to perform regular tasks or specialized roles as part of an organization’s team, ensuring seamless integration and collaboration across borders.
Considering the virtual staffing meaning, such employees follow company policies and are integrated into its culture and systems. The key difference between traditional and virtual staff is how you collaborate — using virtual means for communicating within the team and working on tasks, instead of in-person meetings.
Businesses usually hire remote employees to cover long-term projects to leverage more benefits from such a commitment. However, such workers are also quite flexible in the types of projects they handle. VEs perform tasks within the same structured workflow as the team they’re assigned to, adjusted for the time zone differences.
Remote hires don’t need an office, which lowers their cost. However, some companies choose to compensate for coworking spaces if this helps the virtual team’s efficiency and productivity.
Benefits and Challenges of Virtual Team
Virtual employee benefits include a wide range of advantages, with virtual employees playing a significant role in modern workforce management by providing businesses the opportunity to tap into global expertise and enhanced operational flexibility:
Access to the global talent pool
An ideal candidate profile is usually the best image a company can strive for, but without geographic limitations, you can increase the chances of finding a completely suitable employee.
Virtual employment helps redistribute the global workforce, placing talent where they can make the best contribution. Businesses can also tap into a more diverse talent pool worldwide with robust experience, that may be inaccessible locally.
Cost savings
There are a few ways you can save on the cost of virtual staff:
- You don’t need to pay for office space and utilities, reducing overhead costs.
- You can employ specialists in regions with a lower cost of living, which eases the salary and tax burden.
- You can hire an independent contractor or a long-term freelancer who will take care of their taxes and benefits.
Increased productivity and efficiency
According to the American Community Survey, when the number of remote workers spiked during the 2019–21 period, industries with a higher percentage of such employees experienced enhanced output without a corresponding increase in labor.
Flexible schedules and varied time zones can align with peak productivity hours. A dedicated virtual employee can work without typical office distractions like water cooler talk and constant communication. They also save time on the commute, reducing the stress levels from traffic and increasing the opportunities to rest.
Scalability
Businesses can quickly scale teams up or down with outsourced virtual staff based on the project requirements or market conditions. This flexibility can be helpful to seasonal industries or companies with fluctuating workloads. For example, e-commerce businesses may need more support or sales reps during the holiday season. Software development projects can also expand beyond the on-site team’s capacity, requiring more hands to release a product on time.
Diverse perspectives
Collaboration with professionals from different cultural and professional backgrounds facilitates innovation and provides a wider outlook. This manifests especially well in projects that cater to a global audience. Hiring a virtual employee offshore brings fresh ideas to the discovery stage and helps provide more precise customer profiles across different regions.
Business continuity
Companies often hire virtual workers for customer support. Having employees in an entirely different time zone means someone is maintaining high-quality customer service at any time of the day without the need for night shifts.
A VE can support operations in case of natural disasters or other unforeseen circumstances, even if working from a different city. They are also more prepared to relocate and continue working from another city, as they have experience working from any location without noticeable disruptions to productivity.
VE Model Pros and Cons
Benefits
- Reduced overhead costs
- Access to a diverse talent pool worldwide
- High productivity and efficiency
- Scalability of the virtual team size
- Diverse perspectives
Drawbacks
- Possible communication barriers
- Cultural differences
- Time zone differences
Potential Challenges of Virtual Workforce Management and How to Overcome Them
While remote & virtual staffing brings undeniable advantages, it also comes with potential challenges that require thoughtful strategies to overcome them:
| Challenges | Solutions |
|---|---|
| Communication barriers | According to ADP Research, 70% of on-site workers say they “have a strong feeling of connection with their teammates,” as opposed to 64% of remote employees. The difference is only slight, so the main issue may lie in the internal communication strategies. The entire team needs a clear workflow based on overlapping working hours and that highlights the purpose of each communication channel. For example: use a task tracker to update on issues and a messenger for urgent clarifications. |
| Cultural differences | Cultures can differ drastically, yet supporting cross-cultural training can elevate all processes and outcomes. It’s essential for companies that hire across the border to instill ethical communication within teams and promote a zero-tolerance policy towards racism and chauvinism. Setting clear expectations can also help virtual workers understand what must be done and what allows for a more flexible approach. |
| Time zone management | Virtual employee management requires a strict time policy to ensure that colleagues can reach each other in overlapping hours. More thorough planning can also help reduce the risk of delays. For example, if a VE ends their working day much later than the on-site team, setting an earlier deadline may ensure that the task can be checked on time. |
Use Cases: When Virtual Employees Are a Perfect Fit
1. IT Industry
One of the most common cases is hiring virtual staff for software development projects and technical support roles. Companies often hire developers, testers, and IT support staff as virtual employees to maintain round-the-clock productivity and reduce costs.
Example: US-based tech startup hires developers in Eastern Europe to significantly reduce overhead costs compared to hiring locally. VEs help address critical technical issues while the on-site team focuses on strategic tasks.
2. Customer Service
Businesses can set up virtual call centers or chat support teams to ensure the company can handle tickets efficiently across different time zones.
Example: an e-commerce brand employs virtual employees to handle customer queries. This helps the business leverage a strong English-speaking workforce while ensuring round-the-clock support.
3. Marketing
The remote nature allows businesses to access diverse perspectives and expertise to elevate content creation, social media management, and SEO.
Example: a small business hires virtual staff to execute its global marketing strategy. The new employees will manage the marketing channels, create targeted campaigns, ensure website optimization, publish and promote content, and more.
Cases When VE Model Is a Perfect Fit
- You want to scale their workforce up or down quickly
- You aim to reduce the financial risks associated with over-hiring during slow periods
- You plan to expand into new markets or industries without the constraints of setting up physical offices
- You need to allocate resources to other strategic initiatives, such as innovation or infrastructure development
How to Hire Virtual Employees Abroad
There are several ways businesses can hire virtual employees internationally. Here we cover how to build a virtual team using some of the most common methods.
Partnering with an Employer of Record (EOR)
An EOR helps simplify and streamline the employment process for businesses looking to expand their operations internationally. Such providers have established hiring practices and virtual employee onboarding workflows, so you can expect high-quality talent. They also take care of compliance, payroll, and tax obligations, so it’s a great option for companies looking for hassle-free international hiring.
Engaging contractors or freelancers
Hiring freelancers and contractors is a flexible and cost-effective option. Such employees receive a gross salary and don’t expect you to cover taxes or benefits. They are also more flexible in terms of the contract duration. This option is good for short-term projects or one-and-done tasks.
Hiring through staffing agencies
You can outsource VE search to agencies that help vet candidates. They use best hiring practices, so you can expect to quickly meet with high-quality talent. However, your collaboration with the traditional staffing agency may end after you approve suitable candidates.
Direct recruitment platforms
You can use in-house resources to find VE talent on platforms like LinkedIn or Glassdoor and Remote.co or Upwork where you can see previous experience, interview, and vet candidates. Moreover, remote work websites help manage tasks and payroll.
While these are some of the most common options, there are more possible ways to find and hire VEs.
Best Practices for Managing Virtual Employees
This section explores the best practices that help overcome the challenges of remote work, ensure an effective management plan, and align with business goals.
1. Set and communicate clear expectations
When employees lack clear direction, it can cause delays simply because people feel uncomfortable raising certain questions. And when they do, it’s too late. So, defining roles and responsibilities, providing detailed instructions, and setting performance metrics (KPIs) upfront help convey to the team what you expect from them and what level of support you can offer.
2. Use the same collaboration tools across the company
Project management platforms like Jira, Redmine, Asana, or Monday.com work well to define a project’s timeline, track deliverables, and log time. However, using different tools for the same purpose can cause inconsistencies and delays. For example, if you have on-site and virtual software developer teams, using just one platform will help you track and streamline the whole project even if both teams work on unconnected tasks.
3. Promote virtual employee engagement
Regular one-on-one check-ins and team meetings are crucial for any project’s success. However, they are work-related and don’t leave much room to form bonds between coworkers. A good practice is setting up virtual coffee rooms — short, casual video chats where people can get to know each other better. You can create a channel in your corporate messenger where coworkers can find someone to chit-chat about random topics.
4. Create a knowledge transfer plan
This is a document that contains essential skills and expertise from different specialists on your team. It facilitates the onboarding of new hires without knowledge gaps or informational silos and helps them understand what technologies and methods you use.
The Future of Virtual Employees in the Global Workforce
Advancements in technology and the growing popularity of remote work are driving the adoption of the virtual employee model. This gives businesses access to diverse talent and increases productivity through a more agile and diverse workforce. As companies continue integrating virtual employees into their operations, it’s worth tapping into AI-powered tools. They help enhance collaboration, streamline workflows, and increase productivity, allowing virtual employees to take on more strategic roles, contributing to business innovation and growth.
FAQs About the Virtual Employee Model
Which types of businesses can benefit most from the VE model?
Startups, small businesses, and enterprises looking to save costs and access specialized talent are prime beneficiaries. However, any business with short- and long-term projects can leverage the global talent pool.
Are virtual employees suitable for all industries?
VEs are most common in IT, customer service, marketing and sales, finances and accounting, healthcare (telemedicine and administrative roles), education, and other industries where the scope of tasks doesn’t require in-person meetings as a must.
What roles or tasks are best suited for virtual employees?
Roles such as software development, content creation, customer support, and project management are ideal for virtual employees. The list can continue indefinitely, the key requirement is that a person can do the job without in-person meetings.
What is the role of EOR platforms in managing virtual employees?
EOR platforms handle legal, payroll, and compliance requirements, simplifying international hiring and management, etc. Such providers know about the local formalities, which speeds up the hiring and other processes.
How can businesses measure the productivity of virtual employees?
Use performance tracking tools, regular progress reviews, and clear KPIs to evaluate productivity and outcomes. You can integrate some KPIs into your task tracker software for easier success management.
What legal and compliance considerations should be addressed when hiring virtual employees?
Ensure compliance with local labor laws, tax regulations, and employment standards in the VE’s country of residence.
Consider the potential of virtual employees and what impact they can make on your business.
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