How Can Outsourcing Save My Business Money?

How Can Outsourcing Save My Business Money?

There’s no denying that outsourcing is a fantastic way for businesses to save money. By hiring overseas employees in a low-cost economy you’re able to leverage labor market arbitrage – resulting in, on average, a 70% reduction in employment costs. What people often assume with this reduction in cost, however, is that the service you receive is inferior to that of a local employee, which couldn’t be further from the truth – especially if you choose a country like the Philippines to outsource from.  

With a population of over 100 million people, the Philippines remains one of the largest employment talent pools in the world, boasting a plethora of highly skilled and qualified employees available for a fraction of the price than they would be locally. Bookkeepers, assistants, marketing specialists, logistics managers, graphic designers, web developers – the list of available employees is endless. The talent pool just simply needs to be dipped into.

So with all this being said, in what section of the business will these savings occur, and where will they manifest themselves in the form of business optimisations?

Labor Costs

Ultimately, businesses exist to make money. The battle to constantly improve profit margins is a juggling act that is a challenge that can make or break a business. The easiest (and smartest) way to increase profits is to cut costs from your largest expenditure areas in a manner that won’t negatively impact your revenue, the quality of goods/services you provide or your employee experience. 

If you’re like 90% of businesses, your biggest expenditure is in labor. 

In years gone by, it was difficult to save on labor without risking potential impact on the revenue, efficiency and effectiveness of your business. Even after taking steps to improve management, increase productivity and provide better tools for employees, the savings were often minimal and took a huge, company-wide effort. Today, outsourcing your labour to utilise cheaper overseas markets presents an exciting new opportunity for many businesses to significantly lower their labor costs, without sacrificing skill or impacting quality.

Fixed Costs

Utilising virtual employees is an excellent way to reduce your fixed costs. Things like rent, facilities, utilities and bills don’t come cheap, and can be a genuine handbrake on a business looking to grow and expand. Nobody wants to work in a crowded office, and finding an affordable and appropriate new space to move into can be time consuming and expensive – not to mention the logistical nightmare that moving offices presents.

Hiring virtual employees is a brilliant solution to this problem, as their remote nature means they occupy no physical office space or require any of the utilities that a local employee has the right to. This means you can hire more employees than your physical office space may have permitted, resulting in your business being able to increase its output, improve its productivity and grow at a rate that simply wouldn’t be financially viable using only local resources.

For example, if you were going to double your team locally, in addition to labor and recruitment costs, you might expect your rent, IT infrastructure and other costs to double. But if you doubled your workforce through outsourcing, these fixed costs would stay the same. The savings you make from this could be reinvested in the business, and have an astronomical impact.


With more capital on-hand to reinvest into the business, the scope for growth and improvement opportunity is endless.

Perhaps you could increase marketing efforts to attract more customers to your business? Or employ more sales staff and provide greater training? Maybe it means upgrading your tech, investing in new strategic partnerships or conducting greater research and development? 

Instead of reinvesting the savings into internal practices, a slightly alternate – but equally as effective strategy may be to pass them onto your customers. 

You could offer highly competitive rates to retain old customers and attract new ones, or use the extra time and human resources to vastly improve the customer experience. It may even be possible to use the extra time to develop new products and break into new markets. 

Outsourcing is simply about reducing costs that weigh a business down, allowing you to focus on the most important elements of your business, plan growth strategies and implement instant optimisations.

Book your free consultation and talk to us about how outsourcing can truly benefit your business.