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Breaking the Virtual Company Barrier

Photography: moriza

Just about all entrepreneurs have the same dream. We all want to see our services and products used by large numbers of happy customers. We all want large incomes. And many of us want to become the owners of big companies too with lots of contented, grateful employees. And if we have to buy lava lamps to make those team members happy… well, that’s just a price we have to pay.

A price we might not be prepared to pay though is the risk involved in borrowing. To expand from a one-man graphic design firm to a small design business with employees and fixed costs is a big step, and it presents something of a Catch 22: you can’t hire employees if you don’t have the work to pay for them but you can’t take on the work that would pay for them if you don’t have the staff to complete the projects.

Traditionally, the way to break that dilemma has always been to ask the bank to lend you some cash. These days, that’s about as much fun as asking your parents. Banks have stopped giving money to people just because they knew how to say “please.”

Hiring without the Salaries

There is an alternative today though, and that’s to remove the fixed costs of renting an office, paying for insurance, stumping up for health care, and so on, and build up a virtual team. Made up of people scattered around the country and even around the world, virtual teams don’t need offices, insurance, water-coolers or any of the other things that get in the way of hiring and building. They work from wherever they may be, sending in the tasks as they’re completed. If you pay them on a per-project basis, they won’t even need salaries.

It’s an approach that increasing numbers of companies are using. A survey taken in 2006 found that 23 percent of workers were either working at least part time from home or could do so, while Deloitte estimates that 100 million people could be doing some of their work without leaving the house by 2010.

But virtual working isn’t a perfect solution. Studies have found that productivity falls when workers switch to telecommuting (although it rises once a new routine has been created and they find there are no colleagues to chat with around the photocopier). Even established virtual workers though can suffer from some inefficiencies caused by distance working.

The most obvious is slow responses. Although some communication between virtual workers and their real employers is done by telephone and Instant Messaging, convenience means that much of it is done through email. It’s the best way to cope with differences in time zones and also in flexible working hours – one of the prime advantages of virtual work. But it also means that the employer doesn’t get an instant response and can’t know whether the work is on schedule. Questions and answers can be a slow process, something that can be particularly frustrating when deadlines are tight and projects need to be completed fast.

The best solution is to try to think ahead. Virtual companies might be more flexible than real ones but because the communications are clumsier, a message that might take a minute or two to convey in an office can take several hours to reach its target when delivered through email. Those delays have to be taken into account when giving timelines to clients or when planning a working schedule. Adding regular real-time chats can also help to smooth over any potential delays before they become surprises.

The Amazing Disappearing Worker

Worse than delays though are disappearances. It’s not unusual for an email to take 24 hours to be read, acted on and replied to. When that becomes two or three days though, either there’s been a breakdown in communications or the virtual worker has done a real bunk. This shouldn’t happen often but it can happen when an employee takes on more work than he can handle – or even if he’s just sick, suffered a technical problem or gone on vacation without telling you. Ideally, you’ll want to have more than one way of getting in touch with your virtual workers – a telephone number is ideal even if you never actually need to use it – but you can also get around this problem by making the deadlines clear and the times to speak regular. As long as everyone knows when the work has to be delivered, where the worker will be before then won’t be important.

Perhaps most important of all though is that you have to be able to trust your virtual team members. You have to trust them to meet deadlines and you have to trust them to deliver work at the quality you need. That means choosing them carefully – not an easy task when so many people think that to work from home, a computer and an Internet connection are more important than skill and knowledge – and it means holding on to them when you find them. You  might not need to pay a salary but you will have to beat the pay offered by competitors who want your talent. Loyalty isn’t always a big thing in virtual teams.

On the other hand, that applies to the employer too and while virtual workers do bring the odd disadvantage, not only can those difficulties be removed, but so can a virtual worker who brings more of them than he should.


  1. Patel Says:

    100 million people might do work from home, but some jobs you just can't do from home...such as plumbing.

  2. Jennifer's Review Says:

    As someone switching from full time employment to consulting... it's been a tough change to go from going to an office to staying in your PJ's with your coffee and slid over to the 2nd bedroom / office. There are so many distracts ... I've had to create lists and stick to them as well as maintain daily appt. ... It takes self motivation and an independant attitude to be a self employed / telecommuter. Great info on company stats!

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