Hiring Virtual Assistant Can Save You a Bundle

Most VA websites I visited list saving money as one of the most important reasons for hiring a Virtual Assistant. But do the savings justify the expenses and uncertainties of switching to the outsourced solution?

For example, VANetworking.com promises savings of $60,000 per year!

A cost comparison for a full-time employee versus a Virtual Assistant

COST COMPARISON	Full-time Employee	Virtual Assistant
Hourly Rate of Pay	$20.00	$35.00
Fringe Benefits @ 35%(Health/Dental/Life Insurance, Retirement Plans)	7.00	None
Overhead Rate @ 50%(Office Space, Equipment & Office Supply expense, UI Insurance, Worker’s Compensation, Overtime Pay, Administration Costs)	$10.00	None
Total Effective Rate of Pay	$37.00	$35.00
**Hours Per Year	2,080 hrs.	480 hrs.
TOTAL Annual Labour Cost	$76,960.00	$16,800.00

Difference = $60,160.00 per year

*Souce: Virtual Assistant Networking Association

While the numbers sound compelling, I’m not exactly sure how the rates for benefits and overhead were calculated. The time compression, from 2080 hours for an employee to 480 for a VA, is attributed to the fact that “Your employee’s 8 hour day can be crunched into 3-4 hours with a Virtual Assistant.”

So I tried to come up with my own “back of the envelope” estimates, assuming that an employee would be salaried at $35K/year, working 1864 hours/year (SWA average) and receiving benefits that amount to 30% of his base pay (US Dept. of Labor). When calculating time a VA would spend on the same tasks, I assumed that 1) an employee spends 7% of time unproductively (US Dept. of Labor) and 2) a VA would be 25% more productive (yes, I am conservative in my estimates), meaning completing 1 hour worth of work in 45 minutes.

Of course, just as I finished my calculations, I came across the 2007 Salary.com Wasting Time Survey that concludes that 63% of polled employees spent what amounted to 50 extra days of paid vacation a year browsing Internet, chatting and otherwise wasting their employer’s time. Hmm, after taking this into consideration, the total annual savings went up to $34,021!

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Related posts:

1. 5 Reasons to Hire Virtual Assistant
2. Avoiding Virtual Assistant Outsourcing Disasters
3. Virtual Assistants Add Value to Client’s Business