Outsourcing vs. In-House Cost: The True Comparison
The in-house vs. outsourcing cost comparison isn't just about salary — it's about total cost of employment versus a flat monthly rate. When you factor in benefits, taxes, workspace, equipment, training, and turnover costs, outsourcing saves 60-80% on total employment costs.
Key Data: True in-house cost breakdown for a $50K employee: Salary $50,000 + Health insurance $7,200 + Payroll taxes $4,500 + 401K match $2,000 + Workspace $6,000 + Equipment $3,000 + Training $2,500 + Management $4,800 = $80,000/year. Outsourced equivalent: $18,000-$28,000/year. Savings: $52,000-$62,000.
Key Areas
- Salary comparison — US: $40K-$65K; Philippines: $12K-$20K for equivalent roles
- Benefits cost — US: $7K-$15K/year per employee; Outsourced: included in monthly rate
- Overhead cost — workspace, equipment, utilities: $8K-$12K/year; Outsourced: $0 additional
- Turnover cost — average US turnover costs $5K-$15K per incident; agency provides free replacement
- Management time — in-house requires HR, payroll, compliance management; agency handles all
- Total savings — 60-80% reduction in total cost of employment per position
For related resources, explore offshore general solutions for pricing, how offshore teams handle outsourcing cost calculator effectively, virtual assistant pricing: a comprehensive for businesses, how a dedicated real estate pricing VA can transform your operations, offshore general solutions for pricing.
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