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Why employing full-time administration staff is costing you more than you think.

The cost of employing full-time administration staff is costing you more than you think.  Added to their salaries, you will have to pay them holiday & sick pay; other government taxes; training costs and they will have regular “down-time”.  And don’t forget the overheads associated with it – a telephone; desk & chair; insurances; software; stationery and many more expenses.  

Consider the following example:  You employ Mary as an Office Administration clerk to prepare your invoices; answer the telephone; type; collect and sort mail and do your banking.  She works (or you pay her for) 37.5 hours per week.  Her salary is $40,000 per year and she is entitled to 20 days annual leave.  She also has 5 days off sick each year (she says she’s “entitled” to them and she’ll use them!) and needs 5 days training at an external training provider.  She’s also  entitled to 11 public holidays per year.  You know that for 25% of her time she is not busy.  On the face of it, you think you are paying her $20.51 per hour. 

However, when you account for her absences and non-productive time, you’re really paying her $32.47 per hour…almost 50% more…and this does not include the overhead costs I mentioned; which may add up to several hundred dollars per year.…

Contrast this to using a virtual assistant (VA).In a conventional office, they are often called “administrative assistants” but to the ‘on-line’ world, they are called “virtual assistants”. They are both the same type of people but with one significant difference: a VA works usually from their own office and uses their own equipment instead of being physically present in your office to carry out the work.  Alternatively, they can come to your office.  As a VA, they are not expensive employees but self-employed professionals.

Generally, a VA will be well educated; hard working; have a proven range of skills; and use a wide range of computer software. This helps them to provide their clients with a tailor made service leaving their clients to focus on other business needs.  Most VA’s will have previously worked as a secretary, personal assistant, clerk, etc and it is likely that they have worked at the highest level in their particular field of work.  They are well trained and keep their skills up to date at their own expense. 

When starting a new business, it is inevitable that small business owners tend to handle all aspects of their business.  At some stage, a business will reach a point where too much time is spent on administration; rather than generating income.  That’s a lot of valuable time spent on an area that may not be your expertise.  By engaging a VA, you free up that time to focus on what you do best!

VAs provide a professional presence in foreign countries for international companies.  If you use a VA abroad, you will have a mailing address and a phone number without the overheads involved in setting up an office.  If you are away (holiday, business trip, etc), it’s possible to have incoming mail forwarded to the VA’s address. 

The case then, is pretty straight forward for many small business owners. 

I outsource ALL of my administration work to Karen and her team at Office Elves (www.theofficeelves.com).  I do not have to employ administration staff; I know that my administration gets done professionally; within budget and on time.  I recommend you consider using a VA; it will save yourself some headaches.         

5 comments

  • John Dick said on October 10th, 2007 at 4:49 pm :

    Virtual assistance is no more a new concept. It is well tried and tested. As per my experience, not only the cost of employing full-time administration staff is high but also it require investment in other fixed assets such as office and equipment. The beauty of VA is that the fixed component is eliminated. This really helped me when I started my professional services. I was worried about money to be spent on office infrastructure, computers and other equipments. VA solved my problem. I have been using their services for the last 19 months and it worked really well for me. Especially when my workload increases during peak season, they take care of my extra workload by assigning extra VA to me.

  • Andy Doherty said on October 10th, 2007 at 4:51 pm :

    Your article is an eye opener for me. I never thought on these lines to calculate the actual cost of staff for my business. I worked out all these costs and the extra cost added by the holiday pay, sick pay, government taxes, training costs, and other overheads like telephone, desk & chair, insurances, software, stationery etc. is more than the total salary pay to my staff. I am seriously thinking of taking services of VA for my business. Do you have any suggestions about the companies offering such services? You mentioned one website but I want to know more such firms so that I have a good choice with me to select one for myself.

  • Kathryn Cusack said on October 10th, 2007 at 4:52 pm :

    I outsource all of my administration work to a V.A. The whole arrangement works with a very low costing. Not only do I avoid incurring expenses on office and equipment, I save on salary also as my VA’s fees are relatively much lower. I have total peace of mind. No hassles to manage administration Staff. I know that my administrative work is done professionally, within budget, on time and without any headaches.

  • Jan Frann said on October 10th, 2007 at 4:53 pm :

    I think outsourcing administration work to V.A. is suitable for small business, where time constraint are not that high, but it is not suitable for a big business. In big businesses, the workload is high and it should be completed timely. I think the V.A. may delay the work due to non-physically presence.

  • Michael Farley said on October 10th, 2007 at 4:56 pm :

    The article is good but I am concerned about giving my secret information to a person whom I cannot see and control. Outsourcing for big companies, which are bound by, detailed controls to save intellectual property and client information is fine. Further, they have money and scale of operations to manage few visits to VA companies to satisfy themselves with the setup of the company to which they are assigning their work. For a small business, a personal visit may not work for cost reasons. In such a scenario finding a reliable and trustworthy VA seems to be a matter of luck.

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