Economics of OUTSOURCING!

"How Much? Gosh, that's a bit expensive." The first response I hear when I mention my rates. Not thinking that we have to cover things that a typical employee does not need to worry about like equipment costs, and not being able to charge for every hour of every day.
But laying that aside for a moment, how many have actually sat down and thought about the costs of an employee compared to outsourcing to a Virtual Assistant (or other professionals)??


We can see how much a typical PA can cost, as Reed did a survey, which show up some astounding results showing that the average salary for a PA in the UK is £32,083!

To be conservative, we will base our calculations on the cheapest PA salary of £25,000, which equates to just over £11 per hour - bear in mind PA jobs are typically £26,000-£27,500 and rise to £30,000-£40,000 in London.

Pay: £25,000
Cost per year in HR (or your time): £500
Employers National Insurance: £2,330
Mandatory Pension Contributions (Minimum 3% by April 2019 between £5,824 & salary before tax): £575.28

Total cost to an employer: £28,405.28

Total work days per year: 261
Typical days lost to sickness per person: 6.5
Minimum UK vacation days: 28

Total work days per year: 226.5

£28,330.28 / 226.5 days = £125.40

Assume an 8.5 hour day (9 to 5:30) with a 1 hour lunch = 7.5 hours.

We are now at £16.72 per hour!

For simplicity, these calculations are also ignoring any staff benefits, office equipment, desk floor space (with heating and rates), insurance, and payroll administration costs, recruitment and training costs. That's quite a list!

Now consider if you had your own full time PA (and assuming you had the work for 100% capacity) do you think they work solidly for all 7.5 hours? Do they account for every bit of time they work for you? No sitting on Facebook, or idly chatting to their friends on the phone? Have you also factored in the tea breaks, maternity/paternity pay and wait...maybe even cigarette breaks!!

Hire? NO, Outsourcing is the way!