The True Cost of Hiring: Why £30 an Hour Might Be a Bargain

As your business expands, hiring an employee might seem like a straightforward solution to delegate tasks and free up your time. However, hidden costs associated with hiring can turn what appears to be a cost-effective choice into the complete opposite - especially for a small business owner like Bob.

Meet Bob and His Dilemma

Bob is a small business owner who dreams of expanding his venture. In order to achieve this, he plans to hire an employee to handle various tasks such as managing his diary, emails, social media and some other administrative tasks. Bob knows he needs to attract the right talent, so he’s willing to pay a competitive hourly rate of £15. Sounds reasonable on the face of it, but let’s dig further.

The Hidden Costs

The problem with hiring an employee is that it comes with additional expenses - something that many entrepreneurs overlook. Beyond the hourly wage, employers need to consider National Insurance contributions, pension plans, holiday and sick pay and other benefits. In addition, there are costs associated with providing IT equipment, training and office space. When all these factors are taken into account, the true cost of Bob’s potential employee is at least 1.7 times more than the initial £15 per hour - totalling a staggering £25 per hour.

Productivity Matters

But wait, there’s more… Employees, even though they might be physically present for 7 hours a day, aren’t necessarily productive for that entire time. Studies show that the average employee is genuinely productive for only 3 hours a day. When productivity levels are factored in, the real cost of Bob’s employee skyrockets to an eye-watering £62 per hour.

Enter the Alternative: A Virtual Assistant

At first glance, £30 an hour might seem steep. But with a virtual assistant, you only pay for the hours you need. No additional costs, no hidden expenses. In the context of productivity, a virtual assistant, who is solely focused on tasks and accountable for their time, might just outshine an in-house employee, even with a higher hourly rate.

The Cost-Effective Solution

At a time when every penny counts, especially for small business owners navigating a cost-of-living crisis, making financially savvy decisions is crucial. Hiring employees can and does work well for many businesses, but it’s essential to consider all the costs involved. For entrepreneurs like Bob, exploring alternatives like virtual assistants might offer a more cost-effective and efficient solution.

So next time you’re considering your staffing options, remember Bob and his £30 an-hour revelation. It might just be the key to saving your business both time and money in the long run.