Building (virtual) bench strength, a primer – Part 1

Posted: July 31, 2010 in Entrepreneurship, Teams

Many small businesses are doing what they can to keep things going in the face of one of the worst economic downturns in our lifetimes, but with so many elements of uncertainty many are loathe to make full time hires or resume their pre-recession growth trajectories. And yet, there is still work to be done. While we wait to see what will happen with health care reform, labor laws, tax changes and other variables, it is important to keep moving, stay focused, and explore other ways to get things done.

One way to keep projects moving and stay on track is through the use of virtual teams and the thousands of freelancers around the world who are eager to ply their craft, often for a fraction of the cost of a full-time employee in the US. Inevitably, the question arises:

Isn’t that taking jobs away from people here in America?

Maybe. Maybe not. It really depends on how you look at things. I see a tremendous opportunity through virtual outsourcing to gain access to global talent that was simply out of reach until this century, and to re-focus the efforts of the US workforce on high-end innovation and development rather than fixating on what is inevitably a “race to the bottom” in trying to compete on price with people who often market their services for about $3.50 per hour.

Since I started my business in March 2010, I’ve tested a number of these online resources, such as oDesk, Guru, 99designs and several others. In many cases, you will find very capable US-based freelancers registered on these sites as contractors and service providers. And in many cases, using these services is not the cheapest option. I have had some projects go very smoothly, and others that (four months later) are still not complete. And in that timeframe, I have learned some things that I am going to share with you.

  1. Have a plan. This would seem pretty obvious, but in the US workplace we’re so used to ambiguity and lack of specificity in job assignments that it’s tempting to apply the same approach with virtual team support. Don’t! If you cannot create a “paint by the numbers” plan for the project that spells out the goals, elements and deliverables then you are kidding yourself if you think the person on the other end is just going to figure it out for themselves. It is up to you to spell it out, and be as specific as possible in defining the scope of work and what the finished product should look like.
  2. Use specific questions to narrow the field. Many times, freelancers and virtual teams will simply bid on every project that is posted, and they will decide later (once they’ve made the cut for interviews) whether they can actually do the project. Eliminate these pikers right up front by putting questions in the original job posting that they need to answer in their response. No answers, no need to pursue further. If they won’t pay attention to details when they are eager to win your business, how attentive will they be once you’ve paid them?
  3. Set a price for the project, don’t go hourly. It is very tempting when you see the hourly rates that are posted on services like oDesk to just create an open-ended project … after all, for $3.50 an hour or sometimes as high as $11.00 an hour you can get lulled into the sense that you are getting “cheap labor.” And that’s true to a point. However, what you will find is that there’s a pretty significant delta between our expectations in US business (including research, writing, marketing, etc.) that doesn’t necessarily resonate in other parts of the world. What that means is that you will end up paying someone for 20 hours to learn what it is that they need to be doing, when you could have hired a US-based “VA” (virtual assistant) or an intern to perform that same task in a couple of hours. So, bottom line: set a price that you are willing to pay and make it a project price not an hourly rate. You will weed out the people who don’t have the ability to get it done, AND you will create an incentive for fast delivery because the project is only fully paid upon completion.

More tips later. Like”Keep an open line for communication.” and “Check the work in progress and be specific about changes.” What questions would you like to ask? What tips would you share based on your experience?

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