Should I Hire An Employee, Independent Contractor, or Virtual Assistant?
Updated on February 29, 2020
Congratulations! Your website business is turning into quite the little success story.
Hope you did something fun to celebrate.
Maybe it was a champs on the beach under the moonlight with friends and family all giving heart-felt “jolly good fellow” speeches to your tenacity and brilliance — or maybe it was taking a three minute break from the daily hustle of building a successful website business to run to the corner store and buy a cupcake, which you then rushed back to eat under the crackling rays of your desk lamp, FB messaging a friend about your milestone while you adjusted your AdWords campaign.
Cause one is the dream and one is the reality. I leave you to determine which it is.
In the harsh light of the next morning, you realize that, while this is amazing, things have to change. You are ready to grow and scale. You know you need to hire someone, but who?
There’s a number of different types of team members to hire, but each comes with their own strengths and weaknesses. Let’s deep dive into the three most common in online business: Virtual Assistants (VA’s), Independent Contractors (IC’s), and Employees.
What Is the Difference Between a Virtual Assistant, an Independent Contractor, and an Employee?
Whether it is your first hire or your 27th, you’ve likely wondered what kind of person you need to bring onto the team.
We’re not talking about personality fit or culture test or any of those bullshit corporate HR buzzwords that get so much play in today’s “big happy family” business landscape.
We’re talking about the nitty gritty details and classifications. What kind of arrangement should you enter into with your new hire? Are there any legal or government regulations you should be aware of? (Note – that last part is important. And, in case you weren’t aware, we aren’t corporate attorneys or labor relations consultants — so if you have a unique case that you are trying to figure out, you should check with one of them, and not base your legal hiring obligations on a blog post.)
Virtual Assistant
A virtual assistant, as the name implies, is someone who works remotely (virtually), who assists you with your tasks. You may never meet this person in three-dimensional life.
You can hire VA’s through a number of different sites and services, some freelance and some agencies specifically created to serve your assistant needs. Because they are usually independent contractors (we’ll talk about those more in a moment), you are not responsible for most related expenses like employee-taxes and paid benefits.
They are a great first hire to get yourself out of the more general day-to-day tasks, like:
- Collecting data and online research of your industry
- Managing calendars and travel scheduling
- Overseeing email and/or customer service
- Pulling reports and analytics
- Coordinating shipping and delivery processes
Independent Contractors
Like those annoying word problems you used to get in high school, most virtual assistants are independent contractors, but not all independent contractors are virtual assistants.
What does that mean?
An independent contractor is a a person or organization that provides specific services independently from a business, as outlined by a verbal or written contract.
So a virtual assistant, by virtue of the fact that they often work independently (remote) without being fiscally attached to a company, is usually classified as an independent contractor on paper.
But independent contractors can be, and often are, capable of much more specialized service work than the general tasks assigned to a virtual assistant. An independent contractor could be:
- A graphic designer who creates your website images and banners
- A freelance writer who crafts your product descriptions and ad copy
- A customer service representative who handles incoming requests a few times a week
Independent contractors often work “less than full-time” hours, and/or have the autonomy to work on their own schedules and oversee their own work product. You are hiring them for an exact focus, because they are experts in their field. They provide their own tools, software, supplies, and equipment to do their job. They will invoice or bill the organization for the work done, based on the previously discussed verbal or written contract.
Which brings us to…
Employees
There is a lot of discussion about the differences between an independent contractor and an employee.
In the world of online business, it can be a bit confusing, and the line can be easily blurred.
An employee will often be tasked with similar tasks to an independent contractor, as they are being hired for their specific expertise and skill set. Rather than being charged with singular projects or assignments, they will instead work on a variety of tasks, under a particular category of work.
For example, an in-house writer might write your product descriptions and ad copy, but they might also write for your company blog, update site copy, manage your written communications like email and shipping notes, and any other text content needs that come up.
Since most of us understand hiring independent contractors, as we are used to working on our own to build empires, an employee’s classification is best explained as the opposite of an independent contractor.
In other words, an employee does not set their own schedule. They do not have the autonomy to oversee their own work product and work 100% independently. They do not supply their own tools and equipment, and will often work in a set location, dictated by the company. They do not track their work and billables, and are instead paid through a company payroll or accounting service.
Most importantly, if you hire someone on as an employee in your company, you are responsible for new expenses, such as employee taxes, insurance, and benefits. Which is why it is SO important to understand the differences between an independent contractor and an employee.
This is an important clarification, as many governments have started cracking down on the classification of independent contractors and employees (most claim this is for employee standards and treatment, but there’s also that pesky matter of taxes due). The crackdown is best explained in the cautionary tale of Zirtual’s demise, when in the course of a month, many of the virtual assistants working for the company were reclassified as employees due to a location change, which brought a whole slew of new expenses and overhead the company was not prepared to take on.
This, coupled with other mismanagement and transparency issues, brought the company crashing down in the summer of 2015.
Don’t be that company.
Now that you know the different classifications of roles and workers available to you, how do you decide which is right for you, at this point in your business?
The Pros and Cons for Each
There are very real reasons why you should hire each of these types of team members, and very real reasons you should absolutely not hire each of these types of team members.
Virtual Assistants
Pros
A virtual assistant is a great first hire for an online business or website. If you’ve ever heard the phrase “work ON your business instead of IN your business,” and thought “Now THAT has some merit,” then you are probably already in desperate need of a VA.
They can handle most of your general tasks and obligations on a day-to-day basis, freeing you up to focus on expanding the business by buying more sites or looking at new advertising channels. Or any of the zillion other ideas you’ve had, but haven’t had the time and mental bandwidth to focus seriously on.
Consider their skill set a catch-all of the things that you wish you could stop doing, but you know are vital to the regular operations of your business.
Because of the general and “low-level” nature of their assignments, this is usually a more inexpensive hiring option. Again, great if you are still starting out and looking to save costs where you can.
Cons
Some, though not all, virtual assistants are what we like to call “box checkers.” Meaning they are fantastic if given a list of tasks to complete, and they can check the box beside each of item as it is executed.
But the myth of the Super VA is just that…a myth.
Yes, you might find someone out there who is what you can only assume they mean by “Ninja VA”. They can work independently, make decisions and suggestions based on their prior experiences and expertise, and have specialized skills like graphic design or writing that they excel in.
Often, if you are working through an agency or staffing service, you have a better chance of finding one of these virtual assistants.
But most of the general VA’s you’ll find on sites like Upwork and Freelancer are going to be looking for work that they can clock in, complete, and clock out on. Additionally, they are often working for multiple clients simultaneously, so you might not have their captive attention.
As with most things in business, and life, virtual assistants are a great example of the old adage you get what you pay for.
Independent Contractors
Pros
Working with Independent Contractors is kinda like dating without a stated relationship commitment (that is not meant to be a recommendation that you should date your independent contractors, but sometimes the heart wants what the heart wants, you know?)
An Independent Contractor is someone on your team that is there to fulfill a particular purpose, but they aren’t a permanent fixture in your operation. They are free to come and go as they please, and so can you. There’s a reasonable expectation that you are both working with other people, and not in an exclusive situation. You’re free to see other clients/ICs.
They are usually experts in their field or niche, and you are bringing them onto your team to share that knowledge and utilize it. An Independent Contractor is expected to be able to think independently and make their own decisions, based on their experience and skills.
You can hand an assignment off to them, and know that it will be delivered back with exceptional quality, and that they will follow up with you if they need any clarifications. You don’t need to oversee everything they do.
Plus, because there is no long-term commitment or oversight, you don’t have to pay for such employer related costs as taxes and insurance. They’re still a relatively inexpensive hire, even if their costs are higher than a Virtual Assistant.
Cons
An Independent Contractor is going to be “seeing other people.”
If you aren’t ready to settle down and offer them benefits and a steady schedule at a living-wage, then you should expect they will work with other clients and companies. Of course, you can request that they not discuss your particular trade secrets and processes with their other clients, but you can’t expect that they will not take what they learn with you and apply it elsewhere.
They are also not locked down. Independent Contractors are usually hired on a more temporary basis, an at-will team member that can come and go whenever they’d like. Under most labor laws, you can’t dictate a set mandatory schedule for Independent Contractors on a long-term basis.
Also, because they are working for different organizations, and at their own whim, they may not be as familiar with the internal workings and messaging of your particular business or website. While this doesn’t matter so much in an Ecommerce or Affiliate business model, where you are looking to turn customers on products — it becomes a big problem in an Info Product or SaaS business model, where you are developing a vision and company culture.
You don’t necessarily want people speaking for your organization who don’t intrinsically understand your values. At least not without some serious sign-off structures in place.
Employee
Pros
Think of this hire as an Independent Contractor that you put a ring on. (Again, it’s up to you if you want to actually put a ring on them.)
An Employee is someone that you would like to have a serious involvement and future with your business or website. They are the whole package — dedicated to your same values and vision, an assortment of skills and qualities that are a great fit with something that is missing currently, willing to be available whenever you need (usually within reason), and invested in the growth of your organization.
Because of this availability and exclusivity, they will be a better representative of your voice and style. They know what happens behind the scenes because they are a part of the behind-the-scenes action.
Cons
The biggest con, and reason that so many online businesses still operate with a team mostly comprised of Independent Contractors, is cost.
Because of government and labor regulations, taking someone on as an Employee (whether full or part-time) comes with a laundry list of taxes, insurance, benefits, and other expenses and obligations.
Additionally, Employees are often working exclusively or primarily for your business. That means they rely on you for their livelihood. Obviously, the emotional and mental repercussions of such dependence can be a very real weight to bear.
How Do You Work Best With Each of Them?
Virtual Assistants
For three working days, write down every single thing you do for the business. We don’t care if you are writing things like “Check FB fan page messages for the 73rd time today” or “Refresh ad campaign results to see if anything should be adjusted” — you’ll quickly realize how many of these things you can assign out to someone.
As mentioned in the Cons above, most virtual assistants are “box-checkers.” They aren’t coming into your organization to necessarily think for themselves and make decisions (though some do, and kudos to you if you’ve found one!), so you are going to have to carefully detail what you want them to do and how you want them to do it.
SOP’s, checklists, regularly checking in to report back to you on task completion — these are all things you should plan on for a virtual assistant hire.
Independent Contractors
It is important to be clear on expectations and obligations before getting into any deliverable work with Independent Contractors. How long are you expecting them to work for you (and how long do they expect to work for you)? What kind of work will they be doing? Is there a loose time frame you’d like them to deliver assignments in?
Make sure to write this up, either in a formal contract or at least an email they can confirm. Verbal contracts, while binding in most legal situations, are extremely difficult to prove. In labour disagreements, governing bodies will often defer to the team member. You are the business owner, you should know better.
Because Independent Contractors are going work independently, if you want something done an exact way, you need to let them know in the beginning. Otherwise, they will execute on your request the way they see fit, based on their experience and skills.
Along these same lines, micromanaging an Independent Contractor is often a recipe for disaster. You are hiring them because they are experts in their field, telling them how to do their job ends…badly.
Employees
While it might seem scary to full-out commit to an employee relationship, the results are often better than you could have ever imagined.
Sure, it doesn’t seem like there’s much of a difference between Independent Contractors and Employees, other than the increased costs and obligations.
But an Employee is someone who is well-compensated, at all levels, to be your person. Like, if you killed someone and needed a person to help bury the body, they are your person.
Ok, maybe not that far.
But they understand your organization. They are showing up on a regular basis, to do the work you have asked of them, and anything else that might come up (outside the scope) as it falls under their job or department.
Really, it’s a scary leap, but this type of hire can be the jam, if you are able to swing it.
Get Help.
Whether it is a Virtual Assistant, Independent Contractor, or Employee that you are hiring, the truth is you need them in your online business.
You are only one person, and it is damn near impossible to scale one person.
If you are a Lifestyle Larry, looking to just sustain a healthy living income, and not much else, then you might be able to get away with a one-(wo)man-operation.
But for anyone else, a team member is going to be the key to your success.
Just make sure that their particular key fits the opening, if you want to truly unlock your potential for the future.
