The virtual assistant vs. employee debate is becoming more and more relevant for business owners these days, with all the convenience afforded by virtual interconnectivity and an online presence now a key element in success and customer engagement. This means that a lot of business functions require online migration and that a significant amount of tasks also become internet-based.
From basic administrative tasks to office management and logistics, hiring a virtual assistant vs. an employee who can efficiently perform their responsibilities is not a small business decision. A business owner must carefully weigh the pros and cons, depending on short- and long-term goals.
Virtual assistant vs. full-time employee: the main differences
One of the most compelling differences when choosing to hire a virtual assistant vs. a full-time employee is the cost. And this is usually a significant deciding factor for many business owners, especially if the budget is limited. In terms of overall costs, hiring a virtual assistant costs less than hiring a full-time employee.
Another main difference is the location. A virtual assistant can be from anywhere in the world and, therefore, works remotely. A full-time employee reports to the office and handles all tasks in person.
The working hours of a virtual assistant may also be different from that of a full-time employee. While some employers may require their virtual assistants, regardless of where they are located, to work regular business hours, others allow their VAs to have a more flexible schedule. This flexibility, however, may also mean that VAs have to work weekends and holidays. On the other hand, a full-time employee usually follows the usual 9-5 working hours – although there are also exceptions and more than 8-hour work shifts may be necessary for certain businesses.
In terms of overhead expenses, there is practically zero when hiring a virtual assistant. Some employers do offer to cover the costs of their VA’s computer setup and even an internet connection. Hiring a full-time employee comes with the costs of providing them with a workspace, equipment, office supplies, and incidental expenses.
The cost of hiring a virtual assistant vs. a full-time employee
The cost of hiring a virtual assistant vs. a full-time employee is significantly different.
The cost of hiring a virtual assistant is as straightforward as it gets. The employer and VA can either agree on an hourly rate or a fixed monthly rate. The employer only pays for the hours the VA works, or whatever monthly rate they agree on, and nothing else. These days, however, some employers also offer bonuses, 13th-month pay, holiday pay, sick leave pay, and equipment and internet costs.
Hiring a full-time employee, on the other hand, comes with a lot of additional expenses on top of their salary. These include:
- Healthcare (Medical and Dental)
- Worker’s Compensation
- Paid vacation leaves
- Paid sick leaves
- Overtime pay
- Holiday pay
- Payroll costs
- Life Insurance
- Office expenses
- Office equipment
Virtual assistant advantages and disadvantages
- Most virtual assistants have a diverse set of skills. In addition to performing administrative duties, some are also experts in social media marketing, SEO, content writing, basic photo, and video editing, and even logistics planning and technical support.
- Depending on their business needs, an employer can hire a VA only on a flexible work schedule; this means that they will only pay the VA for actual hours worked or per project completed. Or they can agree on a monthly retainer, which means they get paid a minimum fee regardless of the amount of work done.
- For part-time, short-term, or project-based employment, hiring a freelance virtual assistant is ideal because an employer won’t have to make any investments on overhead, and they can work within their allotted budget.
- Virtual assistants level-up on their knowledge and skills on their own in order to be more competitive. This means that an employer will not have to pay for any training unless, of course, they choose to.
- A virtual assistant can be hired on an as-needed basis, such as during peak season or if work needs to be done on the weekend, at night, or during a holiday.
- There is a much bigger talent pool of virtual assistants because they can be hired from anywhere in the world. Employers have a lot more options and a higher chance of finding the best fit for their needs.
- If the employer needs to replace the VA, financial losses are limited to those in productivity during the turnover period. The costs associated with hiring via an online platform is also minimal.
- Depending on the platform where a virtual assistant is hired, tracking hours and actual work done can be either accurate or unreliable. Especially if the VA is on a flexible but hourly work schedule, there may be room for deceitful behaviors and practices.
- Because virtual assistants work remotely, regular communication may be a problem. If there is a task that needs immediate attention and the VA does not have fixed working hours, immediate availability is not always guaranteed.
- Technical difficulties on the VA’s end will be out of the employer’s control, and these, of course, will affect productivity.
Employee advantages and disadvantages
- Meeting a prospective employee in person is still the better way to assess their capabilities and overall character, especially their work ethic.
- Personally working and interacting with a full-time or even part-time employee is considered the more ideal setup for building a mutually beneficial and successful employer-employee relationship. This is invaluable to enhanced productivity, smooth workflow, and business success.
- Because an employee is always physically present at work, the employer will be better able to keep track of daily, weekly, and monthly productivity and figure out if the improvement is needed and where.
- An in-house assistant also guarantees effective communication; any misunderstandings and mistakes can be more adequately and promptly addressed. If and when technical problems or customer-related problems also arise, they can be more effectively fixed so that there is minimal loss in productivity.
- Hiring a full-time employee is a substantial investment, with the costs of maintaining an office and employee compensation and benefits added to the day-to-day and month-to-month costs of running a business.
- The company will shoulder the cost of any advancement in the knowledge and skills needed by the employee through training. This also means time away from the usual work for which the employee was initially hired.
- An in-house assistant typically expects only to complete a fixed set of tasks per day. Although tasks can be moved around if priorities and needs change, the assistant may not be flexible enough to adequately accommodate last-minute changes if day-to-day business operations rely on an established schedule, which could mean poor work quality.
- Regardless of workload, an employee has to be paid their regular salary. Overtime and weekend pay is also required if work needs to be done outside of regular working hours.
- If an employer has to replace the employee, this means added costs from losses in productivity during the turnover period, and advertising costs or recruiter’s fees.
Employee benefits cost vs. virtual assistant benefits cost
Here’s a sample breakdown of the cost of hiring a virtual assistant vs. the cost of hiring an employee:
For a full-time, in-house employee with a rate of $15.00 per hour and working 2,080 hours a year:
Annual salary : $31,200
Payroll Taxes at 12% : $3,744
Benefits at 30% : $9,360
Paid Leaves at 13% $4,056
Admin Costs at 7% : $2,184
Total Cost Annually : $50,544
For a virtual assistant with a rate of $8.20 per hour and working 520 hours a year:
Annual salary : $4,264
Payroll Taxes at 12% : $0
Benefits at 30% : $0
Paid Leaves at 13% $0
Admin Costs at 7% : $0
Total Cost Annually: $4,264
Employee replacement cost vs. virtual assistant replacement cost
According to Forbes, “turnover can cost employers 33 percent of an employee’s annual salary.” This means that if the employee’s annual median salary is $45,000, replacing them will cost the company $15,000, in addition to the $45,000. This estimate covers advertising or recruiter’s fees; interview and post-interview expenses (pre-employment tests, checking references, etc.), signing bonuses, if offered; and onboarding and training costs.
On the other hand, virtual assistant replacement cost only involves fees for advertising and hiring via an online platform.
Which option is right for you?
The virtual assistant vs. employee quandary can be solved by figuring out the specific services the company/business needs. Budgetary concerns are also a critical factor to consider. And then the employer must find a balance between how much they can afford and the company’s needs and goals, both short- and long-term.