This is the question that rarely has a straight answer. Working at AFA Technologies, I get asked this question a lot and so I decided to create a guide for companies that have just entered the world of outsourcing.
First thing: What is your budget?
The first step should always be the budget. You have to determine how much you can pay for a freelancer and not break your budget. If you are only willing to pay the absolute minimum, don’t expect to hire an expert, you’d probably end up with a student or a newbie in this field and so, in general, you always get what you pay for.
Also, consider the fact that some virtual assistants charge per hour, and some – per project. Of course, some VAs are open to negotiation but most of them have set rates.
Secondly, the rates depend on the type of work you want your freelancer to do. Is it content writing, data entry or AdWords analysis? If you check our resource for the tasks that can be outsourced (link to 100 tasks), you’ll be amazed how much a VA can do, and so the rates definitely vary depending on the difficulty of the task.
Another very important aspect is the freelancer’s experience. Normally there are 3 experience levels:
- Beginner – entry level freelancer who is looking to build their portfolio
- Intermediate – someone having 3-5 years of experience
- Expert – 5+ years of work experience with big projects and good recommendations
So how much to pay?
Some companies may question the need for a virtual assistant and argue that a stable, full-time staff is much better. Well, it’s up to you, there will always be pros and cons to it but let us compare what is financially more beneficial for your company.
You’ll find lots of freelancer calculators online that help to determine the average hourly rate, however, each of them will give you different figures so it is very easy to get lost.
I recommend using these calculators just as a reference to see how much on average you should pay your freelancer. What I personally found useful is checking PayScale to compare for different salaries so you have an idea where to get started.
It is always nice to give examples with actual values, so let me give you one:
You want to hire a data entry specialist for a really basic job yet it is one of the most popular tasks to outsource. You prefer an in-house employee living in your area. You will provide their office space, all the equipment needed, cover their annual holidays and other employee benefits. The average hourly rate for this position is $13.73 according to PayScale. You want a specialist working full-time from your office, 40 hours per week – all in all it comes up to $35,014 per year.
Now let’s say you decided to outsource work to a virtual assistant in Lithuania to help with data entry. Our data entry specialists charge €5 per hour, which makes it €200 per week, given they work 40 hours per week. The annual salary comes up to approximately €10,400 ($12,221).
You get the idea – having a virtual assistant IS a truly beneficial for your company. You do not have to worry about buying the equipment, sort out employee paperwork and cover their healthcare.
Another question is – what about the holidays? Should you give your VA a day off? Absolutely. Even though they cover the expenses for tax themselves, AFA Technologies freelancers are entitled to a 14 day paid holiday a year (excluding your country’s holidays). This proved to be the best practice, as VAs tend to feel more motivated and this helps to establish a loyal long term relationship with a client.
Pay per hour or per project?
One of the most frequently asked questions is whether you should pay per project or per hour? The truth is – there is no set answer. It all depends on the task and your preference. For example, content writers find it easier to charge for the full project (say, a full article) because they cannot estimate how long the work may take.
Again, there are companies that are more willing to hire an in-house content writer or a blogger to continuously work on their projects. The problem is usually the price, which tends to be really high, and scalability (you are limited by employee’s knowledge and writing skills).
However, here’s another example for you:
Say you have an in-house content writer working full-time on a monthly blog project. You need a set of 6 articles (standard 800-1000 words) for your blog and 6 short social media posts for each article to promote the blog across your social media. This is a demanding and time-consuming project because it needs research of topics, WordPress and social media knowledge.
An average hourly rate of a content writer in the USA is $16.95. If they work in the office full-time (40 hours per week), the total cost for your monthly project is – $2,825.
If we compare it with a virtual assistant from Lithuania, the whole project would be delivered for you in a month’s time for €1,000 ($1,175). This is where you see the benefits of outsourcing – you can find a global talent that would do the same job for much less just because their average salary is lower than what an employee gets paid in more economically advanced countries. I believe that Lithuania has a pretty competitive market for freelancers, especially with fluent English, high education level and speedy internet.
Always remember that quality = price. If you want articles that would be well researched and written by someone with SEO and backlinks knowledge, be prepared to pay more. The above figures are just estimates for an article. There are freelancers who charge less or more depending on their level of expertise. The final decision is always yours.
At AFA Technologies we have set rates of how much to pay the freelancers you hire to make sure it is both consistent and affordable:
- Beginner – 750 Euros per month full time
- Intermediate – 900 Euros per month full time
- Expert – 1000 Euros per month full time
I hope this guide gives you an introduction to the comparisons of paying freelancers v in-house wages. If you ever have any questions or need any help just get in touch firstname.lastname@example.org and we’re always happy to point you in the right direction.