The hidden cost of employment

We all know that there are additional costs and taxes, but most are oblivious to the exact cost. And it is staggering. In fact, 90% of businesses are blissfully unaware of the true costs of employing someone.

Businesses are under pressure right now, with rampant inflation and soaring salaries. Sadly, the basic salary number is just the tip of the iceberg.

The actual cost of employment can reach 100% on top of the base salary.

Obvious things include government taxes, health insurance, and bonuses. The less obvious include holidays and sick leave, onboarding, training, retention, and software subscriptions.

The stealth costs of recruitment services and the office, hardware, and facilities are often overlooked – but super expensive. Then, you have the HR department that makes all of this happen – which also comes at a cost.

The hidden cost of employment
The hidden cost of employment

It’s no wonder that total employment costs far exceed the salary.

Humans are expensive!

Offshore staff also incur similar overhead costs. Even though they are sitting offshore, they are similarly protected by local labor laws and subject to taxes, etc. And this is fantastic!

However, offshore salaries are typically 70% cheaper – meaning that typical employment overheads are also about 70% cheaper.

So a US-based employee with a $100k salary might have a total cost of $200k. In comparison, a similarly capable person in the Philippines might have a salary of $30k, with a total cost of $60k.

The ratios are still the same, but the total cost is $200k versus $60k. You stand to save $140k – for the same person!

Don’t believe me?

The table below breaks down the true, complete costs of employing someone in the Philippines. Note: this is the cost only and does allow for any margin that might go to an offshoring firm.

costs of employing someone in the Philippines

As the world heads into tougher economic times, thousands of businesses are finding new ways to drop costs and source great staff.

The question for your business:

What are the real, all-in costs of your team?

Read more thought leadership articles here:

Start your
journey today

  • Independent
  • Secure
  • Transparent

Access fantastic talent at world-leading prices

Scale your business fast while reducing costs —
the average all-in employment costs in the
Philippines are typically 70% less than its
Western counterparts

Philippines United Kingdom Australia United States
Software Developer
HR Manager
Team Leader
Copy Writer
Customer Service
Virtual Assistance
Select a role to view salaries
Philippines $7,221
United Kingdom $39,913
Australia $62,653
United States $81,994

Avoid guesswork. Talk to the experts, free.

Get 3 free quotes

You can save 70% on staff costs, whilst driving quality & growth. Connect with an outsourcing expert to see how outsourcing can transform your business.

Why choose us?
  • Independent and unrivalled expertise
  • We carefully match you from 2,300+ leading suppliers
  • Access to Outsourcing Savings Calculator & Report

Get Started

How many staff to outsource?

About OA

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

The #1 outsourcing authority

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.