What I Learned Spending $138,896.51 on Elance & oDesk Outsourcing

Elance: $90,309.00
Odesk: $48,587.51
Total: $138,896.51

Running a business can be downright overwhelming. Every day playing so many roles in your business from customer service to sales, and fulfillment. Everyone talks about the 4 Hour Work Week, but in reality, no one REALLY talks about what it takes…

What it takes to hire a team, manage them and not spend every waking minute hiring, onboarding, and managing.  What it REALLY takes to get out of the minutia. Being stuck wearing all these “hats” in your business sucks,  and it’s practically impossible to get everything done on your own let alone try to scale.

I want to share with you the system my team, and I built to handle outsourcing – you know the hiring, onboarding, managing etc. This is the process that finally took me out of the “day to day” and really allowed me to focus on growth and the bigger picture.

The goal of this system is that ANYONE on your team should be able to hire for ANY task/employee or project manager – WITHOUT YOU

Why Do I Need to Outsource Work?

As the business owner, you should be focusing on two main things: the effort that results in the highest valued work and leisurely activities that provide the best rejuvenation so you avoid burn out. Everything else should be outsourced because you’ll spend less on contractors than you’ll make by focusing on the most important aspects of your business.

This system has helped us hire for a number of positions, including:

• Customer Service
• Web Developers
• Designers (web, graphic, UX/UI)
• Link Builders
• Writers
• Virtual Assistants
• QA Testers

All of these positions provide HUGE value to our company, and honestly at todays scale we couldn’t operate without most of them. We’ll we could, but things would come to a grinding halt.

How to Find Great Employees and Assistants

The most important part of finding AWESOME employees and outsourcers is a solid interview process and quality management skills. When you hire an A-Player on Elance/Odesk, the return on investment (ROI) is insanely high.

It took us years to get this process where it is today, I want you to just swipe the system so you don’t go through the hurdles and headaches we did. Don’t re-invent the wheel, as a good friend of mine says “Don’t innovate, imitate” at least until you have the process working for you and YOU aren’t personally involved in the hiring process.

Cool?

Here’s how to do it the right way:

Choosing What to Outsource First

If you’re just diving into the world of outsourcing, you’ll need to start somewhere. How can you decide which tasks to outsource first?

First, make a list of all of the tasks that you do for your business. Then group all the low dollar value per hour tasks together (some tasks will have no dollar value or even negative dollar value). Those are the tasks you should start with when outsourcing. You may find one Virtual Assistant who can handle all of those low dollar value tasks or you may want to start with outsourcing just the biggest, most time- and money- sucking task of them all. It also helps to group similar tasks together.

Another way to tackle this is to put together a simple org chart (yeah I know getting all technical here). What you want to do is figure out what are the actual positions/departments you will need down the road.

For example for us it looks something like this:

 

When you first start your business obviously you handle every position or most of them. But over time, you will start to hire and bring people into your organization (this includes contractors/employees/etc) and it REALLY helps to have this visual.

Up until a few weeks ago our head Project Manager, Drew did most of the QA testing for all of our software and when we had a big release the entire team would help with QA testing so we could ship.  After looking at ALL the time Drew was spending QA testing (10 hours+ per week), we hired someone full time just to ALWAYS be testing our software and getting the bugs/defects to our developers.  Using this exact process we hired a full-time QA tester in a week – with less than 4 hours of total time invested.

Our new QA tester is from India, he’s an expert at QA testing.

Not only will this help us make sure our software is much less buggy but it helps us spot issues before our customers do. Being Proactive vs Reactive for us is a HUGE priority.

Ready for the icing on the cake?

Project Manager: $20+ an hour
QA Tester: $5 an hour

We’ve freed up 25% of our head Project Managers time and hired someone else to take over the job for 75% less money.

 

Tips for Writing the Job Posting

Your job posting NEEDS to stand out from the crowd, and it should attract your ideal candidate.

• The posting should disqualify certain people. If your trying to hire a college student or work at home mom you should add that, and repeat it often in the posting.
• Be specific, clear, and upfront in the job description. From the job requirements to the background needed, there shouldn’t be any questions left unanswered. If necessary, attach a PDF document that goes into detail.
• Don’t be afraid to be demanding – if you’re not, you’ll waste your time interviewing people who don’t qualify for the position. Take the time to think about who’s the perfect person for the job/position. *** Don’t forget to factor in company culture, ALWAYS make sure they will fit in with the rest of the team.

BONUS TIP:

To find the best job postings just do this:

Odesk -> Find Jobs -> Social Media Manager -> Most Client Hours

For example, if I was looking for a social media manager I would search for that under find jobs and then sort by most client hours

What you get:  companies that have the most experience hiring 😉

This helps me make new job descriptions in literally minutes.

 

Setting the Trap

Far too many Elance contractors use cut-and-paste job applications when responding to a posting. These applicants aren’t paying attention to what you’re asking for. There’s a way to catch them: in your job posting, including something specific that the applicant has to do, like exactly how to start the bid (“Hi Joe, I’m writing about job #1234”) ask them to comment on a blog post before applying.

Another example:

We recently hired a new person on our team who does welcome calls to all of our awesome customers. (I’m sure many of you have talked to Paul) When hiring for that position we needed to make sure the person sounded awesome on the phone, so at the bottom of the job description included a Trap…

 

Here’s the link if you want to check it out: http://bit.ly/11tb0e3

Basically it congratulates them on actually reading the job posting, and then asks them to call our voicemail and leave a message using a script we supplied. When the applicants called the number we sent the call straight to Voicemail, where I again congratulated them and then told them at the beep to record their script.

We used our phone system, and call tracking platform Analytic Call Tracking to buy the phone number and setup the voicemail. (Shameless plug)

This trap actually weeded out 70% of the applicants. You can see below only 6 calls!

For every applicant who doesn’t follow directions and who falls into “the trap” we just delete/hide their application.

By using the trap alone on average you’ll probably get rid of 60%-80% of applicants.

Steps to Take When Recruiting

Recruiting is a numbers game. Be careful – the quality of job candidates will vary widely.

For $25 on Elance, you can feature the project so that more candidates see it and apply. Always do it.

Next, we invite 50-100  candidates by using both the built-in features and search criteria.

On Odesk It looks Like This:

(Add Image)

On Elance It Looks Like This:

Aggressively filter them down until you’re left with the best ones.

Odesk Filters We Use:

• Feedback Rating 4+
• 100 Hours Billed
• Last Activity 1 Month
• English Level Depends On The Job – But minimum conversational
• Freelancer Type: Independent Only
• Tests- depend on position but heres a few we use:
• English Skills
• Spelling Test
• Vocabulary Test
• PHP
• MYSQL
• Photoshop
• Our goal is to filter down to the top 100 people

Then send messages to the top 100 contractors who meet your criteria, but make sure that your message doesn’t prompt them to reply – otherwise, you’ll have 100 replies to sort through. (don’t make more work for yourself)

To do this on Odesk just click contact, copy your message over, choose the existing job you have setup and send the invitation.

 

 

If you’re looking for designers search Dribbble yes it’s spelled with a triple “d.”

The Questionnaire

The contractors who make it through the trap and your first round of recruiting should be contacted and asked to complete a questionnaire. The simplest way to share a questionnaire is with Google Docs – you’ll receive their answers in a spreadsheet. To determine whether an applicant is creative or organized, ask them the following questions:

1. Do you plan things out and like to know what’s going to happen or do you prefer to go with the flow and find things out as they happen?
2. Do you plan your vacations or do you pick somewhere fun and then figure out what to do once you get there?
3. Do you put together timelines and action plans or do you prefer to brainstorm ideas and come up with a lot of options?

 

Myers Briggs

 

The Interview

Conducting an interview should be simple because at least 90% of your questions should be canned. If you feel it’s necessary, you can veer off course a little bit, but for the most part, this step should be straightforward. Conduct the interview over the phone or, better yet, Skype; don’t hold a live chat interview – you won’t find out enough about the applicant, like how they talk and how you two communicate.

 

 

The Best Advice You’ll Get About Assigning Test Projects

 

If you want to hire someone full-time, you should start by hiring them to do small, specific jobs first. Plan to spend between $10 and $50 for up to ten hours of work. Make sure to set a specific deadline, too. By doing this, you’ll get a feel for how the contractor communicates (or doesn’t communicate), if they deliver on deadline or even beforehand, if they’re competent to handle the workload, and, ultimately, if it’s going to work out. If they won’t work out – and most won’t – it’ll be easy to end the relationship because you’ve only given them a small amount of work to start with.

The more complex the project or position is, the more test tasks and projects you can give the contractor to start with. You can start off by hiring someone to do a job for $20. If they do well, you can ask them to do a job for $50 under the same contract. Once you’ve made up your mind to keep them, you can make the projects and offers larger.

Always hire more than one person. Personally, I always hire at least three people to do a project, because I know that at least one of them should produce high-quality work. Then I can choose the best (because I don’t want someone who’s just good enough!). You may be asking, “But what if I’m okay with just mediocre work?” Think about your Virtual Bench – you should always hire people with the goal of building your Virtual Bench, even if you’re only hiring for small projects right now. Eventually, your dream team of outsourcers will be able to handle everything you will need for your business.

I can’t tell you how many times I’ve been impatient and hired someone quickly without doing my due diligence. I’ve spent a lot of money before realizing the person wasn’t going to work well with me. Don’t make this mistake.

Lastly, always pay per project, not hourly. I’ve ended up paying as much as ten times more than I normally would because a project was priced per hour. Whatever you do, don’t try to get out of paying the contractor for their time – they should always be paid for the work they do. If you find that a contractor doesn’t insist on being paid for a test task, I would question their abilities and confidence in their own work.

3 More Quick Tips for Hiring Contractors

1. Don’t hire full-time help if you only need part-time help. Some business owners fear that the person won’t feel like they’re part of the team if they’re only there for half of the week. If what you need is only part-time help, though, don’t waste your money on a full-time worker! Focus on finding someone who has the same work ethic as the rest of your team.

2. Reduce the risk of hiring as much as possible by going through the process slowly instead of rushing it. You’ll end up spending more and causing everyone to work harder if you rush into hiring a contractor.

3. Prepare for a turnover. The fewer team members you have, the harder it is to lose even one of them. Once you’ve built your dream team, though, don’t expect each and every one to stay on with you forever. There are a lot of reasons why a team member might leave and move on to a different aspect of their career, but in the end, it’s not going to be as horrible as you expect. As soon as you find out that they’ll be leaving, start searching for a replacement. In their final few weeks with the company, your team member can train the new replacement so that the swap is as smooth as possible.