Outsourcing ROI 101
Finding a rockstar VA at the right price is a business-enhancing – even life-changing – experience.
It can all go very wrong if you get the question of rates wrong!
Fortunately there are some simple guidelines you can follow to make things work well and give you the best outsourcing ROI possible. For the purposes of this post I will speak in terms of hourly rates.
In most cases, I prefer to work with my team by the hour because I like to build virtual teams as opposed to just getting the job done. This comes with many benefits including trust, commitment and sharing a common vision – plus it’s just more fun! That said, some projects may require a set deliverable and “task-sourcing” is your answer.
One of the first things I learned as a recruitment consultant working in London, UK was to tell my job applicants and clients alike to NEVER discuss rates until after all the interviews are completed.
There is an excellent reason for this:
Would you want to miss out on the perfect person for the sake of 50 cents? Well no, of course not, but it happens all the time because rates are too rigid. It is crazy how many people do not accept a job offer for the sake of 5% of their income! Usually it is just pride.
As an employer, $1/hr here or there is often not an issue. As someone seeking a team member, you want the right person for the job. The person who will give you the best ROI, is a pleasure to work with, who gets things done in a timely manner and has your future in mind.
Similarly, put yourself in the shoes of your future VA seeking work. Most people take jobs based on much more than the rate alone! If they think they might really enjoy working with you or that other conditions are awesome, the rate often becomes more elastic.
Rate is just part of a much bigger, more important picture.
In your job description don’t forget to highlight all the other awesome (soft) things you are offering:
- Training
- Flexible hours (might be the reason why the applicant looked at your job posting to begin with)
- Working as part of an awesome team (people want to work as part of movement)
- Weekly Skype calls (people crave structure)
- Orientation
I could go on and on, but I would prefer to leave it to you to think about what your ideal VA would value. Ask yourself, What would you like? What can you offer? Then just make sure it’s in your job description.
TIP #1 Always include the ‘soft’ advantages of working with you.
Now to placing a job post on oDesk or Elance
Fortunately both platforms are set up by default to help you be successful. Each site’s platform is different, however, and I think there are a few things you can do to get the most out of them.
When Placing a Job Post on oDesk or Elance
TIP #2 (If in doubt) choose not to choose a rate
This applies to first-time users of oDesk or Elance. If you really do not know if you should be paying $12/hr or $2/hr, I would recommend leaving the door wide open. This helps you get the right person to ensure success. The chances of you paying a little more but getting someone who works out really well are very high. In fact for your first hire I would recommend actually actively seek people who have a lot of experience and do charge a little more. In some ways they will be teaching you. You can also do some research to see what freelancers are getting paid for jobs similar to what you are offering.
oDesk does this by default for an hourly rate – Easy
Elance is structured differently, asking for the hourly rate up front.
Many first timers to Elance usually automatically select “Less than $10 / hr.” This is fine if you are happy to pay $9/hr but a waste of everybody’s time if you are not going to pay that. I recommend you use the two options offered down at the bottom, “Decide later,” or “Enter my own range.”
(If You Have A Set Budget) Specify, But Be Careful
As discussed, I just don’t want you to miss out on the perfect person for your business for the sake of 50 cents or a dollar, but I understand you might have a budget or experience in knowing what a great person can do at a certain price point. If you place a lot of importance on a successful outcome, looking for proven, experienced VAs may be more important. You pay a little more, but think of this as insurance to a successful outcome.
Word of Caution: If you are hiring a VA for the first time, hiring the cheapest person possible will more than likely end up in tears. On the other hand it is easy to pay WAY too much. But if you stay focused on getting the job done well and on your ROI, you will stand a much greater chance of success.
Agreeing Rates and Negotiating
When assessing applicants on oDesk and Elance, the first thing you will notice is that you are offered a rate, but the applicant also has a profile rate. These are usually slightly different and they are both important!
Sometimes you will see the offered rate and profile rate vary significantly. Typically I just avoid these.
Tip #3 (Generally) negotiating is a waste of time
As a general rule, negotiating is a waste of time mostly because you can simply select the best applicant from the ones who have offered a rate that seems to fit well with their abilities. Negotiating opens the door to a failed relationship. In some isolated instances however you might want to negotiate. For example, if you just would love to work with one individual it may be worth negotiating but generally this is not the case and you are better off “inviting” others to apply that more likely meet your needs.
Do Negotiate On The Finer Points
You can read this as, “ensure the person you are hiring knows all about all the other soft things you are offering and make sure they are happy with the rate”
Remember – Point out all the cool extra perks your job offers
Always ask – “Are you happy with the rate?”
Leaving some headroom can also be an important part of a hiring and rate strategy. Paying a little less than you were prepared to pay is a good idea because it sets you both up for success in a number of important ways:
- You can pay a bonus for exceptional work or circumstances where you want to drive home how much you appreciate that person.
- You can raise the rate over time as the person grows with you and the business.
- You can use the money for other things like training or just sending a little something special. For example, I often send books that I think the person might get a lot out of. I have also bought headsets, laptops and even a video camera once. Usually the stuff is needed for the project, but afterwards they get to use it.
Shortlist applicants whose hourly rate and offered rate are not worlds apart. A dollar here or there in either direction is perfectly fine. For example, if you are only offering five hours per week, you can expect to have to pay more than to someone who you are working with for 20 hours a week. Conversely, if what you are offering is Data Entry and the VA is used to doing more complex tasks, they may offer $3/hr when they normally charge $4.50.
Conclusion
Ultimately, your success is what’s most important and a good outsourcing ROI is important. It is true you can get amazingly good people at incredibly low rates but that should never be your only focus.
Yes, stick to the budget and what you’re comfortable with, but at the end of the day, you need someone who you can well work with and help you be successful. I have found that long term term relationships are far more important than short term gain. Often you just can’t put a price on someone who truly cares about you and your business and will go to bat for you when needed.
If you’re not sure how get started – check out the “5 Steps to Hiring a Virtual Assistant PDF” below. In it I have some bonus materials including the exact job description I used to hire a rockstar virtual assistant recently. The job description I used for this post generated over 80 applicants in one week and I hired Gladys, who is from the Philippines and has a business degree. Whats more, I just gave her a 10% pay rise as we passed her one month trial and she is happy as a clam.
She is also unbelievably good ROI.
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How important are rates to your outsourcing?
What do you like or dislike about my approach?
Thank you for reading! Please leave your thoughts and comments below.
Scott says
Quinn- Great sound advice. There are so many people and agencies offering a their services to you that it can be overwhelming. I think just having a strategy going into it can save you alot of time. I like how once you find someone that you work well with, keeping them for the long run will be beneficial to your business. What I am struggling with is hiring help for specific functions like, a programmer, social media, wordpress admin. How far do you spread your VA or VA’s?
cubiclefree says
Thanks for breaking the ice Scott. Great question. For me personally I have some specialist VAs and a Generalist VA who does the majority of the hours. I think the key is to keep it simple as possible. Social media can be done by your Generalist VA and programming and wordpress admin can be done by one IT VA. Just a few versatile VAs initially with heavy use of fiverr and specialists for task-sourced projects.
Sammy says
Thanks for this post. Wish I had read it sooner though because I got caught up on the rate for my Virtual Assistant. Awesome Stuff Quinn! Sam
cubiclefree says
Thanks Sam, Pretty common but it really does work much better if you strike a balance! Good luck moving forward, Quinn
valentine belonwu says
Hi is my first time here Quinn,
When it comes to hiring a Virtual Assistant, its not just all about going out there and picking up anyone to come and do the work for you no, there is more to it.
I think its also another field on its own. Just the way you master blogging, marketing, affiliate marketing and other areas of your business that you’re good at, Hiring a V.A is also an area in which one must learn how to do before jumping into it.
I’m sure this post will help a lot of people just as it has helped me. Thanks for sharing.
cubiclefree says
Thanks for commenting Valentine! You are right – working with VAs is really just part of the picture but the really cool part is that they can do almost anything you can’t. So in away that potentially makes them also the most important part! Cheers, Quinn
Theodore Nwangene says
Hi Quinn,
Another great post you’ve just written here. You’re so talented when it comes to hiring and working with Virtual Assistance man and I’m happy to know your blog because I’ve learnt a lot from you.
This is really a one of a king post as usual Quinn,
Thanks for sharing.
cubiclefree says
Thanks Theodore! I love seeing your blog go from strength to strength. You are obviously doing a lot of things right!
Quinn