Wage wisdom; navigating salary arbitrage for quality outcomes ⇨   

Salary arbitrage; the balancing act

Salary arbitrage can seem like a slam dunk – access talented professionals abroad and save a bundle. But it’s a tricky tightrope walk. 

Globalization has allowed businesses to access high-quality staff in lower-cost countries, with diminishing complexity and friction, meaning that small and medium enterprises can compete on the global stage.

But how do you ensure quality whilst cutting costs?

This is the art of salary arbitrage—maximizing value without ever compromising on the standards.

Leveling the playing field

In the US, the top tier companies get the pick of the talent. You want a top 5% developer or engineer? Good luck.

Google, Amazon, and Facebook will snap them up first, and in doing so raise salary expectations for such roles into the stratosphere. OpenAI is reportedly offering salaries of $10 million to lure AI engineers away from Google.

But for an outsourcing hotspot like the Philippines, the top 5% isn’t just available, it’s coming at an incredibly discounted rate.

This means not only being able to compete with the big boys, but to do so in a way that doesn’t kill your bottom line.

Peanuts ≠ monkeys

Make no mistake; this isn’t a race to the bottom in terms of what you can pay for someone to do the job.

Sure, there are cheap options that might work, but why take the risk?

With salary arbitrage, you can ensure high quality staffing options at an affordable price, that still pays an above average wage in the developing world.

For your business, you’re solving problems and saving money. 

For the local economy, you’re creating well paying jobs, building profitable businesses, and contributing taxes. 

This is a win/win for everyone involved

Running the numbers

Say you need to hire a top tier developer. In the West, that’s $100k-$150k easily.

The same level of talent can be hired in the Philippines for only $30k-$45k, a whopping 70% discount.

This is an incredible 3-for-1 deal, with enough left over for a 10% bonus and a staff Christmas party.

Plus increasing your headcount means a greater potential for growth; no more turning away clients or projects because of a lack of resources.

You can take on any opportunities that come your way.

Not just entry-level

We’re not just talking about entry-level staff here.

Hiring a junior team member means less real world experience, which may mean delays in getting them up to speed.

With global arbitrage hiring a senior staff member becomes an affordable option.

Not only can you hit the ground running, but adding more junior team members in the future becomes a breeze.

This yet another superpower of salary arbitrage; incredible cost-saving, combined with easy and efficient scaling.

The question for your business

How will your company leverage global arbitrage in 2024?