Virtual Teams vs. In-House Employees: Which Ones Are Right for Your Business?

by Devan Ciccarelli

As you scale your company, one area that you’ll inevitably need to grow is your team of employees. After all, the more work you take on, the less you’ll be able to do on your own.

In the past, expanding your team simply meant that you’d place an ad for the job you need to fill, meet a few candidates face-to-face for an interview, and select the best fit to work with your in-house team.

This route is still the most popular way to expand a team, and most companies prefer to only use this method. But, that doesn’t always mean it’s your best choice.

So with the help of today’s article, we’ll be exploring the pros and cons of using in-house versus virtual employees. By the end of this post, you’ll be able to decide if hiring an in-house team is truly what your company needs.

Click here to download our free questionnaire: When to Use In-House or Virtual Employees.

Pros and Cons of Using In-House Employees

When you hire an in-house employee, you’re responsible for paying their full-time salary and benefits, but you’re also responsible for setting up and paying for their training and workstation as well.

If you’re a growing startup, this means you’ll be shelling out extra cash in order to buy a new desk, chair, and computer for your new employee to use. You’ll also have to account for them during budgeting for office supplies, break room treats, and office lunches and retreats.

Plus, you’ll need to cultivate the right company culture that encourages employees to stay so you don’t have to do this all over again in a few months.

In return, you’ll have an employee at your disposal for approximately 40 hours each week. You’ll be able to meet with them regularly to monitor how they’re managing their workload, provide instant feedback whenever necessary, and see when they’re ready to take on more work. Your projects won’t be delayed by having to wait long for a response or work around a time difference.

In-house employees are even more likely to be invested in your company and its culture than if they were on their own managing multiple clients. From your employee’s perspective, they have more job security and a guaranteed paycheck with your company than they would striking out on their own.

On the flip side, if you don’t have enough work for your employee to fill a 40 hour workweek, you’re still on the hook for paying them to be there. You’re also paying for sick days and vacation days — days when that employee is not generating any work, but is still collecting a paycheck.

So before we move forward, here are the pros and cons of hiring an in-house employee:

Pros Cons
Employees are available on a consistent basis every day You’re responsible for paying a full-time salary whether they work all 40 hours or not
Employees provide approximately 40 hours of work each week You have to pay for sick days or vacation days when your employees are not able to work
Tasks can be accomplished quicker thanks to instant feedback and face-to-face communication You may need to pay for additional expenses such as a workstation and office supplies
Employees are more vested in your company; the success of your company directly impacts them To foster a positive work environment, you’ll have to provide office lunches and retreats

Pros and Cons of Using Virtual Employees

With over 40% of the population expected to shift towards full-time freelancing by 2020, it’s easy to see that hiring virtual employees is on the rise. And thanks to popular books such as Tim Ferriss’ 4-Hour WorkWeek, even your mother knows about outsourcing.

Virtual-Employee

But is this right for your business?

Contrary to full-time employees, you only pay for the work you order and nothing extra with virtual ones.

For example, let’s say you need a blog post completed. Instead of paying an in-house employee for hours of researching and writing, you will only pay your virtual employee for the final product — the article itself. How long it takes your virtual employee to research, write, and edit their article is of no concern to you since that’s all built into the one price you agreed upon.

You’re also not responsible for your virtual employee’s workspace; it’s their responsibility to purchase a computer, desk, chair, internet connection, and whatever office supplies they’re going to use. You’re saving on these additional costs immediately after hiring a virtual employee.

And if your virtual employee calls out sick or needs to take a vacation day, you’re not responsible for paying these costs either.

On top of saving money, hiring virtual employees also means you can double the hours of your business. See, virtual employees afford you the luxury of having expertise that spans the globe. This also means you have employees working around the clock and after normal business hours, even if you’re not. If a last minute request is needed, it won’t have to wait until the following day to be completed. Your virtual team can actually set your business up for the day before you even start it on your side of the world.

However, many companies find that working across different timezones can be a downside. In the case of having a three to 12 hour time difference, meetings or communication must wait until your time zones overlap, which could prove difficult or slow down production altogether.

Virtual employees also lack a consistent schedule.

Instead of having a huge block of time, let’s say a 9–5 schedule for example, many virtual employees work in smaller chunks of time. This means they may only be available for 2-4 hours at a time, which could be tricky to work with if you’re dealing with substantial time zone differences.

These chunks of time also make communicating a bit of a challenge. Instead of walking over to your employee’s desk for a project update, you’ll need to leave a message and wait for a response with a virtual employee.

However, this issue shouldn’t deter you. You can easily streamline projects and communication by using project management and communication software such as Slack or Trello. Sure, this also means you’ll have this (tiny and affordable) expense to take on, but if it means staying in the loop and communicating effectively, it’s well worth it.

Another possible downside of virtual employees is that they’re often seen as “not invested” in the companies they’re working for since they can always find new clients. However, virtual employees are looking for long-term relationships — they just prefer working on the right projects with the right clients. That’s why it’s important to really find virtual employees who are interested in your company and what it has to offer.

This segues perfectly to our last point: virtual employees give you access to a wealth of expertise that you may not have otherwise.

Hiring an in-house employee limits you to who’s available to work in your local area. So if you really like a Content Manager on the west coast of the country, but they’re unable to relocate, you’ll be missing out on that top talent.

On the other hand, you can find virtual employees with the exact level of expertise you need to get the job done, regardless of their geographic location.

Here’s a quick recap of the pros and cons of hiring a virtual employee:

Pros Cons
You only pay for the work you need; you won’t pay for 40 hours of work even if you don’t use all of them Communicating across time zones can be a challenge if 3–15 hour time differences exist
Your overhead is low; you’re not paying for a workstation, company lunches, on-site training, etc. Lack of consistent schedule; virtual employees work in chunks of time instead of long 9–5 days
Your virtual employees can work after normal business hours to keep your business working around the clock Employees may not be fully invested in your company
Access to a wealth of expertise that spans the globe Have to pay a small amount in project management and communication tools

Now that you’re equipped with this information, you may be wondering which type of employee is right for your business. Download this free resource to help you make the decision.

Click here to download our free questionnaire: When to Use In-House or Virtual Employees.

In the end, an in-house employee is going to cost you more than a virtual one, but they will give you approximately 40 hours of their time each week and you’ll be able to communicate with them on a consistent (and immediate) basis.

But when managed effectively, a virtual team is going to help you operate more efficiently, boost your productivity, and increase the quality of work you provide your customers.

It’s up to you to decide which is right for your business.