How outsourcing saves money

Labor is one of the biggest operating expenses for most businesses, with the likes of recruitment, training, wages and annual leave accounting for as much as 70% of total costs in some organizations. Hiring more people also typically requires additional infrastructure such as office space, furniture and IT equipment and, in turn, many organizations find themselves struggling to balance the cost of staffing with the potential sales or revenue they may generate. Outsourcing allows businesses to ease such financial pressures, with studies finding cost reduction is the number one reason1 businesses choose to outsource.

With the cost of living in the Philippines much lower than in Western countries, partnering with a quality outsourcing provider can save businesses up to 70% on employment costs for the same level of talent and output quality. In the battle to maintain pace with competitors, outsourcing is a simple but highly effective way to make savings in one area and reinvest them where profits can be maximized such as product research, marketing or increased production.

Outsourcing also allows executives and managers to avoid many of the administrative burdens associated with staffing, with providers taking responsibility for the likes of recruitment, training, performance management and overall supervision. Such benefits are a major reason why the global outsourcing market is set to rise to almost $436 billion by 20282.