How Virtual Assistants
Save You Time and Money

The VA vs. the Employee

Virtual assistants' services run on average about $25 an hour (many VAs charge $35+). Let's compare this against the cost of hiring an employee. An employee's actual cost is 2 to 2 1/2 times their salary. Let's factor in some of the inevitable expenses that come with hiring an employee.

• Health/Dental/Vision Benefits
• Equipment and Space
• Supplies
• Retirement Plans
• Insurance
• Unemployment
• TAXES (VAs are self-employed and pay their own taxes.)
• Overtime Payment
• Someone to administer and oversee all of the above.

If you calculate the cost of all of the above, plus the actual salary, you can see how expensive it is to hire an employee. Let's see this put to work. Here is a case example of hiring an employee to manage a certain chore vs. hiring an experienced VA charging $100 an hour (this is an extreme example, however it is very useful in showing the cost-effectiveness of hiring a VA).

The Employee

Hourly Pay Rate: $25.00
Fringe Benefits @ 35% +8.75
Overhead Rate @ 50% +12.50
Total Effective Pay Rate: $46.25
Hours per year x 2,080
Total Annual Labor Cost $96,200

In the case of the employee, this new employee is paid a wage of $25 an hour. However, this wage is not the true cost to the organization. The cost of benefits for the employee (health insurance, life insurance, 401k, and so on) weighs in at 35 percent of the hourly wage, or $8.75. Overhead --- electricity, facilities, computers and so forth --- costs the organization another 50% of the employee's wage or $12.50 for each hour worked and paid. This brings the employee's total cost to the organization to $46.25 an hour--almost double the wage paid to the employee for each hour worked. When you multiply the hourly rate by the standard number of hours in a work year, the grand total for the new employee comes to a whopping $96,200.

The Virtual Assistant

Hourly Pay Rate $100.00
Total Effective Pay Rate $100.00
Hours per year x 480
Total Annual Cost $48,000

Wow. You actually save almost $50,000 a year by contracting with a VA rather than hiring a full-time employee. Although, the VA's hourly rate is more than the new employee's rate in the first case, you save the cost of benefits and overhead that would have to be applied to the new employees wage. Not only that, but because VAs are more experienced, more efficient, and better connected than the employee, you'll need to devote far less time to the project to get the same results ------ only 480 hours a year versus 2,080 for the new employee.

Remember, with a VA you only pay for time on task. Your employee's 8 hour day can be crunched into 3-4 hours with a VA.

Simply put, you should contract with a VA because it is more cost-effective and VAs go far beyond the normal assistant's duties to deeply impact your own productivity. No task is too big or too small for a VA to handle. Even if you only have 1 hour of work in an entire month for a VA to do, a VA can (and will) do it. VAs let you focus on the things that are most important to you--the business aspect, while VAs handle the paperwork and planning--the other duties that can eat away at your time and productivity.

* This information/example was found on http://www.virtuasis.com/vas_vs_employees.htm and was adapted from/can be found in the book, Consulting for Dummies.