Why do SMEs hire freelancers in India but not full time employees?

The hiring of freelancers from Third World countries has become a very popular trend in recent years. Thanks to the internet and PC revolution, one can work for a company from anywhere in the world. This accordingly begs the questions: why do SMEs (small to medium sized firms) hire freelancers from India so frequently, but SMEs hiring full time permanent employees from India is as yet fairly uncommon?

It is a moot point that hiring permanent employees is not in the interests of SMEs. Hiring freelancers has proven to be highly successful because of low costs and high talent, so surely the same rule would apply for permanent employees? Furthermore, the vast majority of multinational corporations have opened offshore offices in India to hire employees on long term, permanent positions. If outsourcing permanent positions works for MNCs, won't it also work for SMEs? The market for outsourcing full time employees certainly exists; why then has this form of outsourcing so far remained fairly redundant for SMEs?

A freelancer cannot be a full time, permanent, long term employee:
Whilst hiring a freelancer is often a productive move, offshore freelancers are often associated with a lack of professionalism. There are several reasons why freelancers sometimes suffer from such a reputation and, thus, why they are unsuitable to work on a long term basis:

• Freelancers usually work remotely and not from the office of the client; this can result in unprofessionalism
• Freelancers often work on multiple projects at once
• Freelancers in Third World countries have different cultural mindsets
• Freelancers often work in poor conditions, i.e. frequent electricity and internet failures
• Freelancers are self employed and so are not very accountable to you
• There is no one physically supervising a freelancer whilst they work
• Freelancers work on short-term, low-budget projects and so freelancing projects are not valued as highly as full-time, long-term jobs. This can lead to compliancy on the part of a freelancer
• There are no safeguards against data security and intellectual property theft

Permanent employees are more professional than freelancers:
If freelancers are unsuccessful in any particular case, it is almost entirely because of the reasons listed above, i.e. an unprofessional/unstructured setup. With permanent employees, companies require a greater level of professionalism than with freelancers. Outsourcing logo design to a freelancer is one thing but outsourcing large volumes of work to a permanent employee requires companies to take the following into consideration:

• Repercussions of outsourcing confidential and sensitive work
• Ownership of works
• Enforceability of legal contracts
• Tax, insurance, health and employee benefits
• Infrastructure - if an employee is working remotely then there is a heavy requirement for high levels of collaboration. This is only possible if the employee has a fast internet connection, a good PC and other hardware peripherals. Furthermore, Third World countries face long electricity and internet failures almost on a daily basis
• Can the employee work the same hours as you?
• Paying the employee; can you trust the employee?
• Recruitment - how to interview and test candidates?
• Accountability - difficult with an employee thousands of miles away
• Management of employee - again difficult when not physically present

It is for such reasons that we have witnessed a boom in outsourcing to freelancers but not so much to full time, permanent employees. A higher standard of care, professionalism, accountability, structure, infrastructure and management is needed when outsourcing a long term job. So how does one go about hiring a full time, permanent employee in India? Hiring a freelancer for a long term position because of the above stated reasons is simply impractical. The negative repercussions one could face as a result of hiring a freelancer on a long term basis could be more grave than the potential benefits one could gain. Herein, lies the reason as to why the offshore freelancing industry has grown exponentially but hiring full time, permanent employees in India is dwarfed by comparison. SMEs simply do not have any available method by which they can hire employees from India on a long term basis.

VirtualEmployee.com provides the solution:
Whilst outsourcing full time positions was previously considered unfeasible, VirtualEmployee.com is now making it possible. VirtualEmployee.com is the crucial third party that enables SMEs to hire full time employees in India. VirtualEmployee.com provides SMEs with their very own dedicated Virtual Employee that works for them from VirtualEmployee.com's office in India. VirtualEmployee.com addresses all the above issues and enables SMEs to hire full time, dedicated employees in India:

• With VirtualEmployee.com, clients enter into a legally binding contract which stipulates that the security of any sensitive data/information is the full responsibility of VirtualEmployee.com. The contract also clearly states that ownership of works lies with the clients. This arrangement offers far greater security than hiring a freelancer does. Should anything untoward occur, legal enforceability will not be an issue.
  
  
• VirtualEmployee.com enters into a service contract with the client. The service agreement includes office space, office hardware, management, customer service and a full time employee. Although the employee works directly for and with the client, the client does not actually enter into any employment contract with the employee. Unlike with freelancers, all tax, insurance and employee benefits are considerations for VirtualEmployee.com and not the client.
  
  
• VirtualEmployee.com's office conditions are maintained to international standards and no issues with electricity, old PCs or slow internet connections will arise. Freelancers, however, are not in a position to guarantee this.
  
  
• The client makes payment to VirtualEmployee.com and not to random freelancers. The client can, therefore, be assured that their money is in safe hands. A freelancer's reputability is never really proven.
  
  
• VirtualEmployee.com recruits employees for the client. The client has the option of interviewing many candidates before deciding the right one for them. Recruiting an employee to work the same hours as the client is also not a problem.
  
  
• A Virtual Employee works directly for and with the client, but works from VirtualEmployee.com's office in India. VirtualEmployee.com manages the client's employee on their behalf; this ensures the employee is working dedicatedly and working the correct hours. With VirtualEmployee.com having a physical presence, accountability and management of employees is very easy. Freelancers, however, work alone and so this hierarchical authoritative structure is not present if the client is hiring freelancers. VirtualEmployee.com's managers supervise the Virtual Employee on the client's behalf, ensuring that the client's instructions are followed. In case of any problems, the client simply needs to make one call to VirtualEmployee.com's client support department to resolve the issue.

It was never a case that SMEs did not want to hire full time, long term employees in India but rather there was no practical way of achieving this. Now for the first time, with VirtualEmployee.com, small to medium sized firms can efficiently, easily and cost effectively hire employees from India on a long term basis.