Vanadium dioxide (${\rm VO}_2$) is a phase change material (PCM) that exhibits a large change in complex refractive index on the order of unity upon switching from its dielectric to its metallic phase. Although this property is key for the design of ultracompact optical modulators of only a few microns in footprint, the high absorption of ${\rm VO}_2$ leads to appreciable insertion loss (IL) that limits the modulator performance. In this paper, through theory and numerical modeling, we report on a new paradigm, which demonstrates how the use of a hybrid plasmonic waveguide to construct a ${\rm VO}_2$ based modulator can improve the performance by minimizing its IL while achieving high extinction ratio (ER) in comparison to a purely dielectric waveguide. The hybrid plasmonic waveguide that contains an additional metal layer with even higher loss than ${\rm VO}_2$ enables unique approaches to engineer the electric field (E-field) intensity distribution within the cross section of the modulator. The resulting figure-of-merit, FoM = ER/IL, is much higher than what is possible by simply incorporating ${\rm VO}_2$ into a silicon wire waveguide. A practical modulator design using this new approach, which also includes input and output couplers yields ER = 3.8 dB/{\mu}m and IL = 1.4 dB/{\mu}m (FoM = 2.7), with a 3-dB optical bandwidth >500 nm, in a device length = 2 {\mu}m, and cross-sectional dimensions = 200 nm $\times$ 450 nm. To the best of our knowledge, this is one of the smallest modulator designs proposed to date that also exhibits amongst the highest ER, FoM, and optical bandwidth, in comparison to existing designs. In addition to ${\rm VO}_2$, we investigate two other PCMs incorporated within the waveguide structure. The improvements obtained for ${\rm VO}_2$ modulators do not extend to other PCMs.