I had a conversation with someone a couple of weeks ago who asked what I charge. Her response was “Oh that is expensive!” Now in a previous employed life I may have said the same thing, but I want to explore the worth of a freelancer and how this differs to the REAL cost of employing someone.
Value for money: This is a key point. You aren’t employing someone who you need to find work for, you are only paying for the ACTUAL time they spend on your business. So coffee breaks, toilet breaks, phone calls that interrupt their work, aren’t included in their costs. Most VA’s will time track what they do, and so this “wasted time” isn’t invoiced to you as the customer.
Time vs Money: How much time are you currently spending on admin? I bet it is more than you like to think. The reason I know that? Most of you won’t track your time…..so 10 minutes becomes an hour, and 3 hours later you have got it under control. What else could you have achieved in those 3 hours/ that morning/ afternoon that would have generated you more business. How could you have spent that time? Was it wholly necessary for you to do that yourself when you break down what your time is worth?
Skill set: Do you know how to analyse your data? Do you know how to set up a newsletter if you haven’t done it before? No? Well guess what…..it takes you quite a while to figure this stuff out? So that morning I mentioned. Yep- gone again!
The average salary for a support role is around £25,000 in the UK. Working on a basis of 37.5 hours a week, that’s £12.80 per hour. Gosh, yes, seeing that really does mean that a VA is expensive……or does it?
Did you remember to add on Employers National Insurance? That is 13.8% on top of the earnings threshold. So you have just increased that £25k salary straight away. And holidays? Well assuming you give 20 days a year, plus bank holidays (and you probably give more than that because you are kind, yes?) then that is nearly £2000 that you have given but not received work from that employee. That has got to hurt, right?
What about sickness? It is difficult to be accurate, but according to a quick Google search, it appears that about 5.5 days per year per employee are taken as sick, although these figures go up and down from year to year. That is around another £500 you have lost out on!
I haven’t even mentioned productivity: Can you honestly say that every employee is giving 100% at every moment whilst they are working for you? If you employ someone to assist in your back office, are they giving your work constant attention? No web surfing? Really? When you contract us, we are extremely engaged with doing the best possible job. Why? Because our future relationship depends on it. It is as simple as that! So if you consider that at best an employee gives 70% productivity it starts to look a whole lot more attractive doesn’t it. That salary is creeping up again!
And then there are pension contributions; At this current moment it is 1%, although this will be rising over the next couple of years to 3%. That is another £750 per year that you will be paying out.
There are other costs too. Don’t forget to include the cost of office space, furniture, computers, telephones, stationary, software licences and training. There is also liability insurance. And I guess you’d like to provide tea and coffee etc to your employees? This all adds up too, quite considerably! There are also many hidden costs such as of dependents leave, jury duty, maternity/ paternity, redundancies or even unfair dismissal claims. These can be massive and have a huge impact on your bottom line. Life throws curve balls for employers and employees alike, which have to be dealt with.
If you employ someone full time, believe it or not, the actual cost of employing someone on a £25k salary is nearer to £45,000!!!!!
All seems pretty expensive doesn’t it, especially if you don’t have 37.5 hours per week’s worth of work to give them. And would you believe it, for a part time employee, it is even more expensive, due to the fact that some of the overheads aren’t reduced just because they are part time!
So- the other option? Virtual business support. Simply pay for what you use. No commitment, no hassle, no fuss. Get in touch today, we are here to help.
Contact Sarah at aDigitalMe on 07748 960448 or email us at info@adigitalme.co.uk
This is based on an article written in VA Pro magazine in 2012 which I have updated, based on current facts and figures and my own experience.