Is Paying Hourly for Your Virtual Assistant the Right Approach?

by | October 20, 2020


When you need to hire a virtual assistant, one of the biggest variables in making sure you succeed (beyond the professional fit of the VA you hire) is the way in which the billing works out. Depending on the professional you choose, you might need to pay by the hour, per project, or a regular monthly fee. Which makes the most sense for you?

As with so many other decisions for business owners, there is no single best answer. Instead, your business situation will play a large role in determining exactly what you need, and what makes the most sense for both you and the VA you hire.

Many, if not most, virtual assistants will charge hourly rates. As you move from freelancer to a contract with a service provider, that shifts to more set monthly prices based on select packages. 

The good news: once you know about the different pricing option, you can make a much more informed decision on what’s right for you. The more informed you are early in the process, the better for your business. That’s why this guide will focus on helping you understand whether paying hourly for a VA is the right approach, and what other alternatives you have.

Why Most Virtual Assistants Charge Hourly

Make no mistake: most freelancers you find on online marketplaces will charge by the hour. That’s due to a number of reasons:

  • Especially when starting out, it’s the simplest billing method. All the freelancer has to do is track their hours and submit an invoice, no planning ahead required.
  • VAs who charge by the hour can be certain that all the time spent working for your business will actually be paid. In other words, this pricing model eliminates worries of scope creep or unpaid ‘overtime’.
  • Charging hourly also means that the assistant can plan ahead with how much they work. They can easily set standard hours to make sure they never get overwhelmed or have too much work on hand.
  • Traditionally, hourly work has also been a client-preferred method of charging due to its flexibility. As a business, you don’t have to commit a monthly budget line to VA services for a month when you don’t actually need that amount of work done on your behalf.

Add it all up, and it becomes clear that hourly pricing tends to be the standard method of pricing for most virtual assistants, especially those who are new to the business or just trying to establish regular business. That does not mean, of course, that it’s always the right solution.

Drawbacks of Charging Hourly for Virtual Assistants

A significant number of virtual assistants avoid charging hourly. That’s important to remember as you begin to decide how to structure your own service contract with your VA. Most of the reasons to stay away from this billing structure comes down to two basic factors:

  1. For virtual assistants, a significant amount of the work they do cannot be billable to clients. Finding new clients, working on invoicing, and taking care of their own administrative tasks will go unpaid in any type of hourly payment model.
  2. The hourly payment model actually disadvantages more experienced, effective virtual assistants. The more efficient their work gets, both due to general experience and experience with a particular client, the more they get done in a given hour. That means the payoff for the same amount of work done is significantly less when charging hourly.

These reasons, of course, are not enough for every virtual assistant to avoid charging by the hour. But they’re enough to make many of them think twice, and explore potential payment alternatives. As a business owner or manager looking to hire, it’s crucial to understand what exactly those alternatives are.

Packages and Project-Based: Other Pricing Methods for VAs

Beyond the most common hourly billing and invoicing, looking for a virtual assistant will most likely cause you to discover one or more of four alternative payment mechanisms:

  • Prepaid hour blocks
  • Service package pricing
  • Project-based pricing
  • Retainer hours

Let’s explore each of them in more detail.

VA Billing in Prepaid Hour Blocks

This billing method is a close relative to straight hourly pricing. But where the original version causes the VA to track their hours and charge the business after the fact, it reverses the order. The business pays for a set of hours, which are then allocated to work specifically for that client. Think of it like those old pre-paid cell phone plans, but for business hours.

In this system, hours are typically allocated in blocks such as 10, 20, or 50 hours. You can use them as needed, without time restrictions—although some virtual assistants will put a limit or ‘expiration date’ on their hours to help with planning. They’ll report regularly how many hours are left before you run out and have to purchase more.

Many of the same advantages and disadvantages mentioned above still apply here. The core difference is that you as a business can plan better, because you know exactly how many hours you’ll have. But you need to pay before the work is done, making it more relevant for professionals with whom you’ve already worked. It’s a valid alternative, but only with a credible VA you can trust.

VA Retainer Hours

This billing system takes the general concept of prepaid hour blocks, and adds a time frame to it. Instead of purchasing hourly blocks, the business purchases a set amount of hours per month in a contract that typically renews for at least a year or at least requires advance notice before cancellation.

If you know you will need your virtual assistants for regular tasks like inbox management or scheduling, this plan tends to work out well. The schedule is more set, and the professional you work with more reliably available at the times and for the projects when you need them. VAs tend to enjoy this billing method because of a more stable income and increased abilities for financial planning.

Of course, retainer hours are also a bigger financial investment. You don’t just make an ‘hour’ purchase when you need it, but have a fixed cost that you need to account for every month. That makes it a more relevant system if you have a consistent, significant need for your virtual assistant over time.

VA Project-Based Pricing

Some, but not many virtual assistants will go away from the hourly method altogether and offer project-based billing instead. They offer specific prices for a number of specific tasks, like a one-time email inbox cleanup or research project. Their contract will include a start and end date, along with specific expectations of the deliverables given in exchange for the project rate.

The clear benefit here is the lack of long-term commitments to a single VA. When you need something done, and that task is not necessarily repetitive and will not need to be completed again in the near future, this is the perfect billing model. You can typically negotiate the project rate based on what you know about its complexity.

At the same time, the drawback is just as simple: few of the typical virtual assistant tasks are this unique in nature. Instead, most of them are repetitive, making this pricing model less relevant. That’s why you will find many virtual assistants offering a standard hourly rate with some project-based fees included, but not relying on the latter for their income.

VA Service Package Pricing

The final and perhaps most complex pricing model for virtual assistant is the service package pricing option. Here, the professional bundles up their services into a few tiers that help you choose exactly what type and level of support you’ll require to help your business succeed.

The result of this type of pricing might look something like this:

  • General administrative services: $XXX per month
  • Email inbox management: $XXX per month
  • Social media management: $XXX per month
  • Social media and inbox management: $X,XXX per month
  • Deluxe package (all three): $X,XXX per month

Don’t be confused, though. In almost every case, these packages will also include hourly limits over which the service will not go. Typically, you can then increase your hours for an upcharge at the same general service level.

This type of service works best when you’re looking for very specific tasks to be accomplished on an ongoing level. For example, you might always need a social media manager, but don’t need a virtual assistant for anything else. Think of it as the serialized version of the project-based rate outlined above.

That specialized nature, though, also leads to some potential issues. What happens, for instance, if you signed up for social media services but suddenly realize you need inbox management, just for a day or so? You’ll need to upgrade your entire package. The specialization also means having to look around for the exact professional with the exact skills you need.

Which Pricing Structure is Right For Your Business?

With a comprehensive understanding of different pricing structures for virtual assistants in hand, it’s time to answer the big question: which of these pricing structures is right for you as you look to hire a virtual assistant? We already mentioned above that the answer depends on your situation, and outlined some examples throughout this post. Let’s dig in a little deeper.

Let’s make it simple. With answers to these four questions, you’ll be able to better understand exactly what direction your business needs to go in order to get the right pricing structure for your VA:

  1. Do you need only one-time work for a limited project? Project-based pricing is perfect for you. If you need consistent work, throw it out as an option.
  2. Is your need consistent over time, or occurring occasionally? For a consistent flow of work, look to retainer hours or service package pricing alternatives. Prepaid hourly blocks and straight hourly billing are better for irregular timelines.
  3. Are you looking to work with a reliable professional you already know about? Retainer hours are perfect in that case. Hourly billing is better if you’re just dipping your toes in the water with an unknown freelancer you found online.
  4. Do you have a general need for virtual assistant services, or are you looking for help in very specific areas? The former leads you towards retainer hours. The latter goes towards service package pricing.

So far, so good. Of course, these are still generalities that are important to treat as more nuanced. But they amount to a simple flowchart that allow you to determine exactly what pricing structure is best for your business. That, in turn, allows you to focus specifically on potential virtual assistants who offer the pricing structure you’re interested in.

One more note: pay specific attention to the actual fees charged, as well. Though the baseline should amount to similar billing, the differences can be drastic. For instance, a virtual assistant charging $60 per hour might only charge $50 for retainer hours because they include an assurance of monthly work, and more stable financial planning.

To determine whether the exact pricing within your preferred pricing model makes sense, take a close look at the rates charged and make some calculations based on your anticipated hours needed. If you’re not sure what to compare the numbers you find online with, this guide no typical VA rates can be a great start. Simple multiplication can help you better understand what potential budget you’re looking at, and go from there.

How to Hire an Hourly Virtual Assistant

Other than the project-based pricing model mentioned above, all of the options in this guide are, at least in some way, connected to hourly billing. That makes finding the right way to hire an hourly virtual assistant especially relevant for any business owner looking for VA help.

Fortunately, the steps required to get there are actually quite straightforward. Here’s where you start:

1. Inform Yourself About Average Hourly Prices

First, you have to know the general pricing structure you can expect. Some basic research allows you to more easily weed out candidates who charge way too much. We’ve already provided one resource to use above; another option are databases like PayScale and ZipRecruiter, both of which give you an idea of typical VA hourly rates.

None of that should be taken for gospel, of course. But it does give you a good general idea of what to expect before you dive into individual candidates, helping you set a budget and sort out outliers.

2. Write Down Exactly What Tasks You Need Your VA to Accomplish

We’ve highlighted throughout this guide that the type of tasks you need determines anything from typical pay to the best pricing model. That’s why it helps, before you go on a hunt, to write down exactly what tasks your virtual assistant needs to accomplish. That way, you don’t fish in the wrong ponds as you look for qualified help.

3. Determine the Right Pricing Model(s) For Your Situation

Based on both of the above variables, it’s time to take a close look at all the pricing models mentioned above and determine which of them is right for you. Hourly billing, pre-paid hour blocks, retainer hours, and service package pricing may all be part of the equation, but one (or two at most) will probably work better than the others.

4. Perform Research (Online and Offline) to Find At Least 4 Qualified Virtual Assistants in Your Preferred Pricing Model

The basics are out of the way, and it’s time to start looking for a professional who fits your profile. You can either go on a freelance marketplace, or look for dedicated assistant services that tend to cost more but bring increase credibility. Whichever route you take, look for at least (and preferably more than) four qualified candidates that match your profile.

5. Check References, Reviews, and Past Work for Any Potential Candidates

For the candidates and services you’ve found in the previous step, perform some more in-depth research. Online reviews on independent sites are a great place to start, and you can also ask for references and past work of any candidates you’re looking to partner with. Use that information to form a qualified opinion.

6. Contact Each VA Option to Make the Final Call

The final step comes down to a conversation. With every candidate that has passed the previous test, set up a time when you can learn more about their background, expertise, and approach to working virtually. That will give you everything you need to make that final call.

From there, it’s to the contract. Most VAs will have a standard contract outlined with their pricing model and hourly pay. Review it closely to make sure it matches your budget and expectations. Then, sign the dotted line, and you’re ready to start working with your new hourly virtual assistant.