Outsourcing Costs Break Down

The anatomy of outsourcing

The anatomy of outsourcing

People want to know how much outsourcing costs. Unfortunately, the answer is not a simple one.  I would love there to be a Netflix of employment, but alas, employing people is complex – and so the cost structure tends to reflects this. 

But stick with me – this is worth knowing. **Cue the flip chart and had puppet**

For a start, salaries can vary tremendously. Do you want an entry-level admin or a senior Web3 dev? A junior sales associate or a veteran VP of sales?

On top of the salary, you’ll incur typical government taxes, insurance, healthcare, and employer contributions – as is the case with any country.

anatomy of outsourcing
The anatomy of outsourcing

Then there is the office, facilities, and hardware. It’s a lot more common these days to work from home – but it’s not necessarily the best approach for everyone. Call me old, but I still believe in offices.

Then there is the service fee. This is the money that goes to the outsourcing firm to make all of this happen – seamlessly and reliably. Yes, these guys also have to make some money. They are the glue that sticks it all together. These fees are sometimes a percentage of the salary costs (markup), and sometimes they are a flat fee. 

You also have the option to get very light support from the outsourcing firm, or alternatively, they can offer maximum support to the point where they can run the department for you.

Sometimes, these separate costs are hidden, and the client is presented with a simpler all-in price. But generally, if you aren’t privy to all the separate costs, you’re probably paying higher margins to the intermediary.

It’s a bit like making a sandwich.

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Philippines United Kingdom Australia United States
Software Developer
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Philippines $7,221
United Kingdom $39,913
Australia $62,653
United States $81,994

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About OA

Outsource Accelerator is the trusted source of independent information, advisory and expert implementation of Business Process Outsourcing (BPO).

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Outsource Accelerator offers the world’s leading aggregator marketplace for outsourcing. It specifically provides the conduit between world-leading outsourcing suppliers and the businesses – clients – across the globe.

The Outsource Accelerator website has over 5,000 articles, 450+ podcast episodes, and a comprehensive directory with 3,900+ BPO companies… all designed to make it easier for clients to learn about – and engage with – outsourcing.

About Derek Gallimore

Derek Gallimore has been in business for 20 years, outsourcing for over eight years, and has been living in Manila (the heart of global outsourcing) since 2014. Derek is the founder and CEO of Outsource Accelerator, and is regarded as a leading expert on all things outsourcing.