'Virtual Assistants' in Higher Demand

Down Economy and Need to Cut Costs Have Employers Turning to Telecommuters
By Emma L. Carew
Washington Post Staff Writer
Wednesday, July 8, 2009

Michael Hanik used to have 12 employees, a warehouse and trucks to run his medical devices catalogue company. But four years ago, he turned to the Internet to look for ways to reduce overhead costs for his Rockville-based Total Medical Systems. He now has just three employees on the company payroll but as many as 50 contractors working for him, some of them known as "virtual assistants."

The term, around since the Internet became widely available, encompasses anyone who telecommutes and does administrative tasks for other businesses, usually on a contractual basis. Most do tasks such as document preparation, paperwork and accounting. Some have niche areas, such as bilingual translation or creative services.

In the current economy, Jane Weizmann, a senior consultant at Arlington-based human resources consultant Watson Wyatt, said she's seeing more businesses with a "part-time cadre or network of people" who telecommute and bring different skill sets to projects as needed. "It's a lot less expensive than having resources on staff, sitting on the bench and waiting," she said.

Virtual assistants allow companies to save on real estate and equipment, as well as on benefits, which can add 35 percent to a base salary, Weizmann said. She cautioned, however, against businesses relying entirely on outsourced work and contractors. The high levels of turnover can create an unstable workforce. "You can supplement your core capability, but you can't replace it completely with 100 percent outsourced work," she said.

The numbers are difficult to track, because there is no formal certification and not all people doing similar work call themselves virtual assistants, but one small trade group, the International Virtual Assistants Association, said its number of new members doubled from 2007 to 2008. To date this year, IVAA has added 160 new members, bringing membership to about 900. With no warehouse space to rent, no salaries or health benefits to pay, and no supply cabinets to keep stocked, Hanik estimates he's decreased his business costs by 65 percent through outsourcing and using virtual assistants. "It's a tremendous revolution," he said.

IVAA officials say the number of virtual assistants is increasing as companies lay off their administrative and executive assistants. Plus, the barrier to entry is low, because most people already own the equipment they need, such as computers, printers, fax machines and Internet access. "You meet people at the conferences who say, 'Oh, after I was laid off four times, I decided to become a virtual assistant,' " said Lauren Hidden, marketing director for IVAA. "They get tired of the insecurity of being an employee." Even though the real estate agency that Pharice Brown used to work for laid her off, it still needed someone to complete her old tasks. That started her career as a virtual assistant and president of Bladensburg-based Pharice Brown and Associates. "Even though the Realtor wasn't able to pay me the salary, he actually helped me get my start," she said. She said many of their customers are small, independently owned businesses that found her online or through recommendations. Brown now makes less than half her former $50,000-per-year salary and has cut back on spending so she can afford paper, printer ink and software. She has been without health insurance for nearly a year. "I carried my own insurance until I just couldn't afford it anymore," she said. Brown said she loves the flexibility of the work and being her own boss, but money is tight, and when there are bills to be paid, she'll occasionally work below her normal fees just to get paid.

Rosa Pichardo, who runs a virtual assistant business in Silver Spring, said part of her success through the recession has been her niche: working with Spanish-speaking business owners, largely translating documents. Pichardo, who was a travel agent in her native Dominican Republic, said that when she started up Rossie's Enterprises in 2004, it was hard to find customers. But now the business has grown to include Pichardo, her son and another employee.

Starting your own business can be difficult, IVAA officials caution. "Some people join and never really get off the ground," Hidden said. Salaries can vary based on qualifications, what people charge and how frequently they work. Hourly wages may range from $20 to $75. Brown said she has coped by starting other businesses. Right now, demand for her interior design firm is low because people are not redecorating their homes, but the demand for the résumé-writing services of her virtual assistant business has increased. Catalogue-company owner Hanik found Kim Lazernik, a former computer software tester, on Craigslist. When Lazernik was laid off in 2007, she formed Silver Spring-based Virtual Computer Services and put her skills to work on projects for small businesses, such as photo scanning and data entry. Lazernik has definitely taken a pay cut since starting her own firm. (Her old job paid more than $100,000 a year.) She now works about 20 hours per week, charging $35 to $40 per hour. But, she says her expenses for the business balance out with the money she saves on commuting and career clothing. Like Brown, she currently does not make enough to be saving for retirement. "I love what I do. I wake up happy every morning," she said, but added, "I'm thankful for the years I had a 401(k)." At 49 years old, Lazernik said the career change is permanent. "There's no reason for me to stop doing this."