Hourly rates – the cost comparison of a temp vs a VA!

We had a really interesting discussion on the forum recently regarding clients wanting to pay temp rates….  One faction thought VAs should price themselves competitively with the local temp rate (even if that meant going as low as £10/hour).  And the other reckoned that because we’re not a temp we should differentiate ourselves in our pricing.

From the Client perspective: Grasping that thorny vine, let’s say I’m a client in a rural area and my local temp agency charges me £15/hour for an assistant.  I have 200 envelopes which need stuffing, which should take about 2 hours to do.  Let’s look at how much it will cost:

Temp: £15/hour x 5 hours (minimum hire is ½ day) = £75 + I have to be there when they are working, sort out a space for them to sit, etc.

VA: £20/hour x 2 hours + 2 x £10 courier charges = £60

But on paper, the VA is charging more than the Temp.

From the Temp’s point of view: It’s in my interest to spin the job out for as long as possible since I’m usually doing this as a stop gap between jobs and there’s no long term relationship with the client.  I should try and take as long as possible to do the job so I earn the maximum amount of money.  I’m usually not highly skilled or experienced, since I’m unable to find long term employment.  I can’t afford to take jobs where the travel costs make it prohibitive to me earning any money so I won’t do jobs of less than ½ a day, and it would need to fit round my other commitments.  If they are in a remote area, would the temp agency even be able to find somebody at relatively short notice?

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From the VA’s point of view: It’s in their interest to create a long standing relationship with the client and do a great job, quickly and efficiently, so the client wants to use them again.  They are usually highly skilled former executive assistants and also have a virtual skill set which makes them extremely knowledgeable about small business practises.  However, working on site reduces the VA’s flexibility and they loose out on billable hours through travel time and office niceties.  So for the VA, working on site is actually less lucrative than working at their own office.

Looking at this breakdown, it’s no wonder clients want VAs to come on site to work – it’s cheaper than hiring a Temp!  But many VAs don’t realise this and feel they need to compete with the temps in terms of price (low hourly rate) and service (being on site), which is simply not true.

I often have clients saying “I need a VA for 20 hours a week”.  What they actually mean is that they want the facility of an assistant for 20 hours a week, but most small business admin won’t take anything like 20 hours a week.  They have the employee mentality where there’s no incentive to do a good job or delight your boss.  In fact, I reckon that by batching tasks, automating where possible and working in a focussed efficient manner, most of the tasks a part-time staff member does could be completed in less than 5 hours a week by a VA.  What I always say is “How would you like to have a VA available for 40 hours a week, with no red tape at £XX per hour and only pay for the time it actually takes for them to do the tasks?”

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We’re underselling ourselves as “being expensive” when in fact we work out cheaper than either a temp or an employee.

For Approved VAs click here:

https://www.societyofvirtualassistants.co.uk/2011/04/06/find-an-approved-va/

  1. MAKadmin on 25 April, 2011 at 10:48 am

    Interesting point Catherine, but those with experience in employing temps will, I am sure, agree that it is only partly correct…
    In my career as a manager I employed/worked with many temps who had both skills and experience and, in my opinion, it is hurtful to assume that all of them temp because they failed in finding regular, full-time jobs. For quite a few, this is a conscious choice. Like VAs, numerous temps simply want to have greater flexibility, which comes with fewer hours and/or more variety, which comes with being assigned to various clients.
    The statement that there’s no (or cannot be) long-term relationship between temps and clients is not entirely true either. Agencies tend to retain workers who score highly with employers and many companies who use temps on a regular basis, will specifically ask for those, who proved good in the past.

    The point I could not agree more with, however, is that VAs do not need to compete with temps. In fact, I think that VAs should not compare themselves with temps in the first place, because both groups target clients with different mind-sets.

    • Caroline on 26 April, 2011 at 9:01 am

      But it isn’t the VAs comparing themselves with Temps – it’s the clients. They don’t see where the difference lies, and often ask why they would be able to hire someone for £15/hour for a temp instead of, say, £25/hour for a VA.

      Having hired many temps in my corporate life, I have to say the ratio of students topping up their holiday income to professional temps was about 10:1. Most people do not choose to be a temp, they take it as a means to an end.

      My point is that even if you look at it from a financial point of view, rather than a skills based criteria, it still makes sense to hire a VA rather than a Temp because of the minimum hire periods and the fact that the agency will be creaming off about 10-25% of the fee so instead of hiring a £15/hour worker, you are actually getting someone who is willing to work for £10/hour – this doesn’t doesn’t a great skillset.

  2. SuperMac on 9 May, 2011 at 9:35 am

    Hi Caroline,
    I must say I have not experienced anyone questioning me as a VA vs Temp. It is common however for people say they need someone actually in the office for x number of hours simply because they cannot conceive that their work could be undertaken off site. Once we start to have the discussion about the cost and logistics you can hear the light bulb moment in their voice as they realise that working with a VA will save them both time and money.
    I have one client who does require me to work from his office one morning per month simply because he is away from his home based office that day and he requires a body there to allow others access. He pays me my full hourly rate of £30 plus travelling time [approx 45mins – 60mins each way] at the same rate.
    It is about that trusting relationship – to value someone you do need to know, like and trust them. I also think its important to be on an equal footing to your client rather than being in an employer/employee relationship – something they would rarely get from a temp.

    • Caroline on 9 May, 2011 at 9:50 am

      I suspect the best clients do get that lightbulb moment Lin! The problem is that for many clients this is the first time they’ve thought about hiring a VA, and their closest comparison is often hiring a temp – hence why a lot of VAs get questioned why they are “more expensive” than a temp… Hopefully this goes some way to helping explain why we’re actually much better value!

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  4. Joanne on 3 November, 2011 at 5:03 pm

    I like your arguments for hiring a VA instead of a temp and sure I will be using them, however I do agree with MAKadmin in that I’m a temp and have been temp contracting for ten years for lots of great organisations and not because I couldn’t get a permanent job (I’ve been offered many along the way). I have implemented new systems and had great references and feedback. Also I’ve worked with many great temps who have multiple skills due to their experience with different companies over various industries, using lots of software packages. I have built good relationships with employers and often been asked back.

    My reason for contracting is because it suited my lifestyle better, I’ve saved half most of the year and had three to six months off travelling most years. I would never take a permanent job on just to leave so quickly.

    I now want to have a change of career and start as a VA, and I totally agree with the cost effective reason you give for hiring a VA instead of a temp (and hope my potential clients do), however I had to stick up for temps!

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