The Hidden Costs of Employees

Published: September 1, 2023

Do you need extra support in your business, but aren’t sure whether to bring the tasks in-house to a permanent employee, or outsource the role to a VA or other external business professional? There are benefits to both, but outsourcing can be a great option for many businesses looking to increase productivity and efficiency without a significant financial commitment. At first glance, many business owners think that paying more than £30 per hour to an outsourced business support professional isn’t as financially viable as paying minimum wage to a permanent employee, but there are lots of additional costs associated with employing staff that are easy to forget – here’s a helpful breakdown of just a few! 

Bonus – Admittedly, not every business opts for bonuses to reward staff, but if you do, it’s worth mentioning that you aren’t expected to pay bonuses to your virtual assistants and other outsourced business support staff. Occasionally, some businesses opt for ‘Thank you’ vouchers for a job well done for their virtual support staff, but this isn’t expected. 

Sick Pay – Whether you are employed or self-employed, the odd sick day is a fact of life. However, with virtual staff, you don’t have to pay sick pay. It is also worth speaking to virtual support staff to find out what they have put in place in their own business to mitigate the impact on you if they are absent due to ill health. It may be that they already have cover that they can offer for sickness and holidays so that there is no downtime in your business support. 

Parental Leave – With employees, you do have a responsibility to cover maternity, paternity and adoption leave, and to support staff with parental leave. As with sick pay and holiday pay, this isn’t a requirement with outsourced business support, and your virtual assistant may have arranged cover for this period to keep your essential outsourced business tasks running smoothly. 

Tax and National Insurance – PAYE isn’t something that you need to worry about with virtual assistants; as business owners, they will deal with their own tax and national insurance. The business will invoice you on a weekly or monthly basis, in line with the contract drawn up for support, and as long as you pay this promptly (as per the terms in the contract), your outsourced team will be happy! 

Holiday Pay – I’m sure we can all agree that everyone needs a holiday sometimes, but it can be challenging when you have to manage a whole team of employees and make sure that essential tasks in your business are covered at all times. Outsourced business support professionals don’t need holiday pay – you simply pay for the support that you receive every month. Many VAs also find cover for their own holidays, ensuring no downtime in the support they provide. They can often also provide additional support to your business and cover your in-house team when they are out of the office on holidays, whatever the time of year. 

Equipment – many VAs already have their own equipment, from laptops and desktops to phones, desks and chairs, and other office furniture. VAs are business owners and self-employed professionals in their own right and therefore have all the associated accoutrements (as it’s pretty hard providing remote business support without your own computer and internet connection!). As a result, this is another cost that you don’t need to cover, unless, for data security purposes, you decide to furnish virtual staff with a phone or computer specifically to support your business. 

Software – as with equipment, many VAs already have the software required to carry out the day-to-day tasks that you may ask of them (i.e. access to Microsoft Office, emails, etc.). However, if you have specific software, like a customer relationship management tool or database, for example, it may be that you need to pay for an extra seat for your virtual support staff so that they can access it too. It is always important to ensure that you give staff – both internal and external – their own access (with appropriate permission levels to carry out specific tasks) to important business software rather than share a single login with all of your staff. 

Breaks – everyone is entitled to a break from work to move their body, have something to eat, and rest their eyes and brains for a short period of time. However, unlike with employees, you don’t need to pay VAs when they are on breaks, as you are only billed for their working hours, not their breaks and lunches! However, it may be that the working hours of your VA are also a little different to that of a traditional employee, so make sure that you talk to them about their working patterns and your specific cover requirements early on in your working relationship to ensure that you are supported appropriately. 

Pension – We all know the importance of pensions, but you don’t have to enroll virtual support staff into your workplace pension scheme, reducing the associated admin from your side! 

Training and Development – when you take on a new member of staff, you often need to train them in the software you need them to use. You may also need to support them with Continuing Professional Development (CPD) activities. VAs are remote working business professionals who are often already skilled in the tasks you require support with, meaning they can jump straight in to help you! Occasionally, if the task you need help with is a little out of the ordinary, or requires specialist software that few people have access to (and/or have previously used), you may need to provide training to your virtual support team and pay for the time needed by your VA to familiarise themselves with this tool and complete any mandatory training. 

‘Faff time’ – I’m sure that we all have short periods of ‘faffing’ at work; tidying desks, searching for files, clearing out email inboxes, etc. Even getting set up when we first log in in the morning (hello 25 different passwords to open relevant tools and apps)! When you outsource, you are paying for the time that your VA is working and supporting you, not for their desk tidying time or their own business admin. Even if it’s just 15 mins of faff time a day, that equates to over 60 hours of faff time a year that you’re not expected to cover with wages when you outsource work to a Virtual Assistant. 

If you are considering bringing in additional support for your business, it’s important to think carefully about all of the hidden costs associated with employing a permanent member of staff to determine whether it’s a financially viable option for you. Outsourcing really can help save you time and money and increase productivity and efficiency and could be a great option for your business this year. 

Sick payYesNo
Parental leaveYesNo
National InsuranceYesNo
Holiday payYesNo
Equipment – laptop, phone,YesNo, unless you choose to for security purposes
SoftwareYesSome – a VA will have the right kit and software to cover the basics, but you may well have to pay for extra licenses on MS 365 plus a CRM or similar, if you use them, to add them as a user
Office furnitureYesNo
Training and developmentYesNo – unless system specific
Time spent faffingYesNo