Dateline: Jakarta, Indonesia
I was talking to some locals here over the weekend, and we got to discussing the cost of doing business here in Jakarta. As it turns out, doing business in Indonesia can be relatively cheap if you know what you’re doing. This is thanks in part of the dreadful track record of the Indonesian rupiah, you can hire a young or unskilled employee from two million rupiahs (US$170) a month. More talented workers, like an experienced masseuse or a talented office staff member, might fetch five million rupiahs.
However, if you’re not planning to start your business in Indonesia, you can still use geoarbitrage – the leveraging of cost of living inconsistencies – to hire affordable staff for your business. This way, you can enjoy business freedom. One way to do this is to hire a virtual assistant, a concept popularized in Tim Ferris’ book The Four Hour Workweek.
While I believe more advanced businesses – especially those with a presence overseas – can benefit more from on-the-ground hiring of full-time assistants in emerging countries, the best place to start is to hire a virtual assistant remotely.
In early 2008, I was running a growing radio business. It was early in my career and I had just left a great consulting deal in Southern California which helped put me in touch with a lot of clients who wanted to expand nationally and needed help.
I tried to hire local talent in the United States, but I got little more than run-around. I couldn’t justify or afford to hire an expensive, highly-skilled secretary – the kind that knows your wife’s anniversary and asks you if you took your daily cholesterol pill – but I needed help.
And as you might imagine, good help at $12 an hour is hard to find. Half of the people I scheduled to interview didn’t even show up. While some of that was due to my inexperience, much of it was a lesson learned in hiring people in developed countries where such an attitude often goes unpunished. One interviewee I called after he was thirty minutes late cursed me out and hung up on me.
It was then that I turned to the world of hiring part-time, flexible virtual assistants in emerging countries. Over the years, I’ve expanded this practice until I was able to hire staff during my travels overseas. Here are some of my best tips.
How to hire a virtual assistant tip #1: Be involved
When you first start looking to hire a virtual assistant, it can be overwhelming. There are plenty of websites that promise to help you find the best virtual assistant – called a “VA” for short” – but many that don’t deliver or are overpriced.
Personally, I advise people looking to hire remote staff to be involved themselves. If you’re an entrepreneur growing a business, this can pay off in spades. Yes, there are agencies that provide outsourced staff for you, but the price doesn’t really reflect what you’re getting.
For example, I once hired a US-based call center to call business decision makers and offer my services. They did a decent job and it cost me $27 an hour. However, the economy was horrible at the time, so I looked at ways to reduce that cost. I found services using workers overseas that ranged from $8-10 an hour in the Philippines to $15 an hour in Israel.
Considering that a decent salary for a call center worker in the Philippines is $500 a month ($600 if the job requires non-English language language skills, such as Japanese or Korean), $10 an hour seemed steep. While you could argue there’s an advantage to having a buffer between you and the employee to smooth things out, this requires you to make sure you’re hiring the right COMPANY. After all, companies can be just as unreliable as bad employees.
While there are definitely bad employees everywhere, I find that the lack of the safety nets in the emerging world – and the desire to advance – mean workers in these markets in often more aggressive than their western counterparts.
I ended up hiring a North America-based virtual assistant that worked out to $8 and hour, and a virtual assistant in India that cost about $1.25 an hour. For what we were doing, the US-based assistant worked out better due to her command of American English and her lack of an accent, but the Indian VA did a great job, too.
If you find the right virtual employees – and it will take awhile, just like hiring “regular” employees – you’ll be able to delegate tasks to them without the need for a middleman. After all, you could hire a revolving door of call center employees in the US for $8-10 an hour. I shudder to think what a chore that would be, but it’s possible. In that regard, paying the same rate in the Philippines eliminates any geoarbitrage benefit.
I prefer websites like oDesk, which seems to provide a wide range of staffers. Odesk has become a bit lower market, but I find this to be a good thing. There are other sites such as eLance, but I found the prices on these sites to be rather uncompetitive. If you need a virtual assistant website to help you hire US-based contractors, sites like eLance may be helpful. Personally, I never had a problem finding people to build websites, do SEO, or do graphic design work. There are plenty of self-employed contractors to be found by simply Googling what you need, or using forums on industry sites like WordPress.org.
And I’ve found affordable US-based workers to do follow-up calls and other tasks that require good English speakers on oDesk, anyway.
How to hire a virtual assistant tip #2: Understand the nature of employees
If you’ve hired in-house employees for your company, this will come as no surprise. If you’re new to hiring, you may not be sure of how all of this works.
When I hire a virtual assistant remotely, I use one simple rule: the hourly rate should be inversely proportional to the amount of work.
Think about it: other than high school students, few people would accept a minimum wage job at McDonald’s for fifteen hours a week. You couldn’t survive on that. While it’s quite easy to find low-skilled workers to work on a trial basis, or even for ten hours a week on an ongoing basis, I’ve found these workers rarely pan out in the end. They end up with too many tasks from too many different “employers” and you will often get the short end of the stick.
For example, I once had a very simple internet research and data entry project that involved Google Maps. It was literally as simple as point-and-click, copy-and-paste. I could have easily purchased list data for my target market from a list broker, but at $0.08 per lead, it was cheaper to hire a team of workers in Bangladesh for $0.39 to $0.75 an hour and have them churn out the data.
In my ad, I promised a full one-week trial at forty hours a week. I told the candidates I interviewed that I would be keeping the most efficient workers on at the same full-time schedule for the next 1-2 months (there was a lot of data, and getting it in waves was better than getting it all at once anyway). I also suggested there could be potential to move to other tasks after this job was complete.
I built a team of about eight workers, mostly from Bangladesh. I made them send me their updated data daily, and I kept a spreadsheet of the amount of data they sent versus hours worked. I actually plotted “names per hour” for each contractor, then divided that into their hourly rate which I used to determine the two or three virtual assistants I would keep.
While it sounds complicated, it really wasn’t that hard. However, it shows the nature of hiring employees for low productivity tasks. Considering I could have simply paid my postcard mailing house $4,000 to buy the list of 50,000 names I needed, it’s not like I was hiring highly-qualified people.
Because of that, I had to provide incentive to keep the best people on board. One of the people I hired ended up doing work for me for nearly two years, but I had to raise his rate several times, from $0.50 to about $1.25 an hour at the end, in order to keep him happy. (Considering the then-$25 a month minimum wage in Bangladesh, that was considered decent money.)
Contrast that very simple, repetitive task with something like building websites or editing videos for YouTube. Those contractors, who may make anywhere from $3-30 an hour, are going to be more reliable. Higher quality employees are what they are for a reason: they make your life as a business owner easier.
These virtual assistants realize not many people have forty hours a week of YouTube video editing. Because they’re more specialized, they of course charge higher prices, but they’re also used to working on different tasks with fewer issues.
It’s the same thing as it being easier to manage an investment banking employee than a guy working the fry machine. Investment bankers are a lot less likely to just not show up one day.
How to hire a virtual assistant tip #3: Find the best value, and know where to find it
Virtual assistant sites offer talent from around the world. When you want to hire a virtual assistant, you can quickly put up a job posting and have people apply right away. As you might imagine, simpler jobs will get a lot more applications, but require more sifting.
For example, my Google Maps data entry job got nearly 200 applications. That job was so easy that more than half of the applicants were at least somewhat qualified, and the biggest factor in eliminating applicants was that some of them asked for way too much money. There’s no need to pay $4 an hour for such simple data entry work.
Harder and more specialized jobs will fetch fewer applicants, although you’ll still need to wade through (highly) unqualified applicants who think they can handle EVERY task. One way to find these unqualified applicants on more complex jobs is to eliminate those whose listed skills include everything but the kitchen sink; it’s their way of trying to show up in as many search results as possible.
Which countries are best for hiring a virtual assistant?
There are certain countries that specialize in certain tasks. While every country has its share of highly qualified and less qualified workers, there are some general trends that are especially true on sites like oDesk where you get lower prices.
Workers from Bangladesh will be one of your biggest pools of talent for basic data entry and internet research jobs. Some of these workers speak excellent English – I’ve met Bangladeshis throughout Asian with impeccable English ability – but some are rather weak. As with so many other unfortunate situations where people really NEED a job, some workers will exaggerate their skills and the English abilities to get any job they can, so be careful.
When it comes to these simple jobs, I recommend building a team the way I suggested above – being upfront with a promise of a certain amount of work on a trial basis, and making the virtual assistants you hire earn their way into a more permanent position. If you don’t have a ton of work, you could promise them each 10 or 15 hours per week and then choose the ones that actually work those hours. In my experience, some of your team members won’t even work on the task after taking the job.
You shouldn’t pay more than $1 an hour for very simple tasks. If you don’t get a flood of applicants at a lower price point, you may want to tweak your ad. I do believe in rewarding employees or virtual assistants who deliver you value – especially when you don’t have to think about what they’re doing – so be prepared to raise this rate in line with the value you receive over time, but these increases should be earned. You can also implement bonuses for certain benchmarks.
Workers from countries like Pakistan and India will also bid on your lower-end jobs, but will usually require slightly higher rates. You can find decent web programmers, WordPress gurus, and other technically-minded virtual assistants from these countries starting at $3-4 an hour, going all the way up to $15+ an hour. I’ve had success with a WordPress developer at $3.50 an hour, although I wouldn’t give that person access to this site.
The Philippines is a great place to hire a virtual assistant, although there can be fewer Filipinos on some VA sites than you might imagine. The Philippines has a lot of BPO outsourcing firms, so that reduces the freelancer market. However, Filipinos tend to speak good English and can handle any of the tasks you’d send to Bangladesh or Pakistan at a slightly higher price point. If you can afford to pay $3-4 an hour, it may well be worth it to know that you’ll be better understood.
There were a few members of my Bangladesh team, for instance, that had NO clue what my instructions were and spend 10-20 hours doing the complete opposite of what I needed. When I corrected them, they still messed it up. I expected that going in, as such is the nature of hiring people for $0.40 an hour. Personally, I rarely leave bad feedback for these workers, but I did continue the project without them.
If you have the time to deal with this and it’s worth the cost savings, go for it. If not, you might consider a country where English is more widely spoken.
Countries like Romania also offer a number of skilled technical experts, although at higher prices. Virtual assistants in Eastern Europe will charge $3-4 an hour for basic work like research, all the way up to uploading and annotating videos on YouTube. Some of these virtual assistants may even have a specific skill, like being a YouTube guru. For programmers, expect to start around $9-10 an hour and go up from there.
Hiring a virtual assistant can increase productivity and reduce costs
In the end, I don’t believe that hiring a virtual assistant is all about price. I have a friend who runs a multi-million dollar business and had a $15 an hour in-house employee walk out on him. I convinced him to hire a virtual assistant – actually, several – to replace said employee, and he built a stable of several $3 an hour workers to handle the same tasks. For him, it just wouldn’t be worth it to deal with the frustrations of hiring a team of $0.50 an hour virtual assistants; he’s too busy and he needed someone to get the tasks done correctly, right away.
That said, don’t think your business is too sophisticated to hire a virtual assistant. I’ve turned friends of mine in the high-end financial services industry onto these tactics, and they love them. In the 21st century, there’s no reason to overpay, especially since even these high-end businesses have issues with their well-paid American employees.
Like anything else in business – especially in internet business – testing is the name of the game. Find out which approach works best for you and build your virtual assistant team accordingly. If you’ve never hired employees before, you may not understand just what a pain it is.
Hiring a virtual assistant allows you to save money and choose from the best talent around the world, but people are still people. Some people quit with no notice. Some people do a mediocre job. Some people do a great job, will be loyal to you, and deserve a nice bonus.
If you want to hire a virtual assistant, put the time in and make a serious effort to build a great team that works for you long-term, not a short-term scorched earth strategy.
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