How Much Does an Employee Cost
Compared to a Virtual Assistant?

Is a Virtual Assistant cheaper, or shall we say, more cost effective for your business, than an employee?

Your business is at a peak where you either need to sleep less, put your friends and family aside and focus only on your business or reap the rewards of your success and get someone to work with you to take over some of that massive to-do list.

How is a Virtual Assistant Cheaper than an Employee?

You’ve seen people promoting themselves as Virtual Assistants, you’ve possibly even had an email from one offering their services. But come on, £35 an hour for a VA compared to £12.71 (1) for an employee?

Wait there, let’s do some maths…

For the purpose of this experiment, we’re going to assume you’d like someone full time.

£12.71 multiplied by 37 hours a week = £470.27 per week / £24,454 per annum.

So not only are VAs wildly more expensive per hour they’ve also been lying with all their ‘we work out more cost effective’, right? You’re wrong and I’m going to tell you why.

We are equal business owners, our reputations are as important as yours. It’s vital our business succeeds so there’s a secret handshake from the off that we’ve got your back. We admire your success and we’re here to take away some of the work that comes with it.

You will not be our only client though. We work to the 20% Rule, whereby no one client takes up more than 20% of our time, or our income.

This just means we’re not relying on your for our income, we aren’t dragging things out, we allocate sufficient time to work on your tasks / projects and once the work is done, the clock stops.

Virtual Assistants really do save a business owner time

So, let’s look at the VA sums ever so quickly

Virtual Assistant: £35 per hour multiplied by 18.5 hours a week = £647.50

I’ve deliberately omitted an annual cost because you might not need us every week of the year.

But it’s still more expensive? I hear you huff.

Wait, listen, for just a few minutes more…

The £647.50 (or however many hours you need us) is all you pay. Finito. You don’t pay anyone else for our existence in your business, whereas there’s a whole lot of other costs you need to account for if you’re going to take on an employee.

Your time is also money!

With an employee, you’ve also got to factor in the time it’ll take you to write a job description, advertise it (and read through applications from people with zero experience in anything you’ve asked for), interviews… ugh. Or, of course you could get a recruitment agency to help you.

Recruiters charge between 10-30% to find you an employee (after you’ve spent time having meetings about what it is you want). Let’s pick the median – 20%. So, if you’re looking to hire someone full time at £24,454 it’s going to cost you £4698 for the privilege (2).

The cost of finding a Virtual Assistant?

How to get a copy of the

VA versus Employee Infographic

 References:

(1) National Minimum Wage UK
(2) Recruiter costs
(3) PA salary in the UK
(4) True cost of an employee calculator and then I used the following resources to help me complete the calculator

• NI and pension calculator (using the minimum 3% employer contribution for pensions)
• Statutory sick pay allocation
• Employers pension contribution percentage
• NI and Tax rates and thresholds for employers

Queries raised:

I spent a lot of time researching everything and all of my sources are referenced here. I welcome all feedback, but please provide backed up calculations to help me verify things. I wouldn’t create something that can’t be upheld because it would cause no end of issues for VAs who want to use it as a reference tool.

Q: ‘I’m not aware of any mandatory training which costs £1200 a year’

A: Regarding training, that’s just 14 days training a year. New employees would need training on equipment/ software/ health and safety, etc. We, VAs, learn on our time.

Q: ‘Holiday pay doesn’t equate to £85 per day for someone on £12 an hour’

A: Holiday pay for someone on £12 an hour (exc tax and NI, and all the other expenses, like Payroll staff) is £12.21 x 7 hours a day = £85.47.

Q: ‘perhaps you could present holiday differently too. It’s 20 days statutory plus bank holidays at 8.’

A: 20 plus bank holidays is still 28 days and therefore an employer is paying an employee for 28 days and not getting any work done. Fact check here.

Q: ‘A lot of things on the list they would say is not necessary. IT equipment isn’t going to need replacing every year, no need for ongoing HR payments, mandatory training and software licenses is a bit on the high side. A lot of this might apply if they employed a Team but not for a single employee’

A: I appreciate your feedback, please allow me to explain.

I regularly revisit this page to ensure my calculations and references are up-to-date but I don’t do it on a daily basis. If you spot anything that’s incorrect and / or needs updating I’d be incredibly grateful if you could email me at: support@catherinegladwyn.co.uk and I’ll get things changed asap. My intention is to never mislead.

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