Offshore Staff – Costs Explained

Outsourcing has emerged as a popular strategy for businesses seeking to reduce costs and tap into global talent pools. However, before embarking on the outsourcing journey, it is crucial to understand the various costs associated with the process. This article will provide a comprehensive breakdown of the most common outsourcing expenses/fees. By understanding these costs, businesses can make informed decisions about whether outsourcing is the right approach for their needs. 


The most significant expense in outsourcing is the salary of the outsourced staff. Salaries are often lower in countries with lower costs of living, which is one of the primary reasons companies choose to outsource. The salary of an outsourced employee will depend on factors such as their skill level, experience, and the complexity of the tasks they perform. 

To determine competitive salaries for outsourced employees, it is essential to research the standard salaries for specific roles in the location where you plan to outsource. This information will help ensure that you are not overpaying or underpaying your employees. Keep in mind that while lower salaries are an advantage of outsourcing, it is crucial to offer fair compensation to maintain employee satisfaction and productivity. 

Mandatory Government Benefits 

Most countries require employers to provide certain mandatory government benefits to their employees. These benefits may include social security contributions, healthcare, workers’ compensation, and unemployment insurance. The cost of these benefits will vary depending on the country and its regulations. 

When outsourcing, it is crucial to be aware of the mandatory government benefits in the destination country and factor these costs into your budget. Failure to comply with these regulations can lead to legal issues and financial penalties. In addition, providing government-mandated benefits contributes to employee satisfaction and retention. 

Other Benefits 

In addition to mandatory government benefits, companies often provide other benefits to their employees to remain competitive in the job market. These benefits may include private health insurance, retirement plans, paid time off, and professional development opportunities. 

When outsourcing, it is essential to consider what additional benefits you will provide to your outsourced employees. Offering competitive benefits can help attract top talent and improve employee satisfaction and retention. However, these benefits will also increase your overall outsourcing costs. As a result, it is crucial to strike a balance between providing attractive benefits and managing your outsourcing expenses. 

Outsourcing Service Fees 

If you choose to work with an outsourcing service provider, you will need to pay them a fee for their services. Outsourcing service fees can vary widely depending on the provider and the scope of services they offer. These fees may be charged on a per-employee basis or as a percentage of the total salaries paid to the outsourced staff. 

Outsourcing service providers can offer valuable support in managing your outsourced employees, office space, IT, equipment, account management, payroll, taxes, and compliance with local regulations. However, it is essential to carefully review the fees and services offered by different providers to ensure that you are getting the best value for your investment. 

Hiring Fees 

Hiring outsourced employees can involve additional costs, such as recruitment fees, background checks, and pre-employment assessments. If you are working with an outsourcing service provider, they may handle these tasks and include the associated costs in their fees. However, if you are hiring directly, you will need to budget for these expenses. 

The hiring process is a crucial aspect of outsourcing, as finding the right talent is important for the success of your projects. 

It is essential to note that different outsourcing companies charge different types of fees for various purposes, such as training, equipment, extra security layers, and other fees for diverse client requirements. 

At hammerjack, we believe in transparency and straightforward pricing, ensuring that our clients have a clear understanding of the costs involved in outsourcing with us. To learn more about how hammerjack can support your outsourcing needs and provide a tailored solution, book a call with our Australia-based consultant today. Let us help you navigate the world of outsourcing and create a successful partnership that benefits your business.