Virtual Agencies – the Pros and Cons

Buffer recently closed their San Francisco office in favour of going virtual. However, the number of virtual agencies is not in danger of overtaking office based agencies at the moment. Why is this? And what are the pros and cons of going virtual?

Cost reduction agency-side

Virtual agencies benefit from a number of reduced overheads:

• Office space rental costs are reduced or eliminated entirely. Agencies can use a hybrid model – a small staffed office with most staff working remotely, a virtual office – a prestigious street address with telephone answering and mail forwarding services provided by companies such as Servcorp or London Executive Offices or have no office space
• Staff costs are often reduced by outsourcing to cheaper foreign firms or by bringing in freelancers on an as-needed basis rather than employing full-timers
• IT costs can be reduced with cloud computing services
• Internet telephone services allow for cheap communication internationally

But…

Face-to-face meetings, video calling and screen sharing will still be needed:

• Staff productivity may be increased by being in the same location and it can be helpful to meet to share ideas.
• It can be easy for agencies and clients to miscommunicate online. Virtual agencies need to be aware of this and work to ensure clarity and manage expectations.

Cost reduction client-side

Clients benefit from reductions in service cost:

• They may be able to afford greater expertise if they employ a virtual agency as they can use virtual to connect to highly skilled veteran freelancers
• Create talented teams with specific experience in area the client needs
• Creatives take on jobs in the area they are passionate about. When they enjoy the topic they produce better work

But…

Frustration can arise for the both virtual agencies and their clients:

• Sometimes when work is outsourced abroad to cheaper firms it can lead to an inability for the agency to properly check the level of expertise the outsourcing firm has.
• Difficulties may arise in terms of quality and work being delivered on time.

Employee Satisfaction Agency-Side

By going virtual agencies may be able to increase their employee satisfaction rates:

• Streamlined operations due to being able to hire in individuals with the right expertise for each job can reduce working hours
• Greater sharing of information via online file sharing and online project management, e.g. Basecamp, Dropbox, means work can always be accessed allowing staff much greater flexibility in their working week
• Flexibility is great for parents and draws talent back into agencies after employees have had children

But…

Virtual agencies need to look after their data and staff carefully:

• Cloud security is vital.
• Working hours may be awkward if staff are working with offices abroad in different time zones.
• Virtual agencies may feel they are contactable 24/7 which can be stressful.
• Self-management is totally necessary for staff working remotely and staff may become lonely or lacking in morale.
• Staff must be are thanked, rewarded for their work and regular remote staff meet ups should be organised.

Want to know more about working with an agency?

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Photo credit: Zach Fein