Offshore outsourcing has become a practical and cost-effective solution for businesses looking to reduce costs without sacrificing quality. Once reserved for large corporations, it’s now a common strategy among startups, SMEs, and mid-sized companies wanting to do more with less.
Functions like customer support, IT services, digital marketing, HR support, and financial admin are increasingly handled by offshore teams in places like the Philippines, India, and Eastern Europe. The appeal is simple: access skilled global talent at a lower cost than hiring locally.
In this article, we’ll break down where the savings come from and help you estimate what your business could save by making the shift.
Understanding the Cost Structure of Offshore Outsourcing
The most immediate advantage is lower labour costs. Salaries in the Philippines or India can be up to 70% less than their Australian equivalents, without compromising on capability or professionalism. For instance, while a full-time customer service agent in Australia may cost $60,000 to $75,000 annually, the same role offshore may cost $18,000 to $25,000 including benefits.
You also save on employment-related expenses. Offshore providers often manage payroll, benefits, tax compliance, and HR admin, cutting both costs and admin workload. With remote or hub-based offshore teams, there’s also little to no spend on office rent, internet, utilities, or IT infrastructure.
Favourable exchange rates can stretch your budget further though if you’re planning long-term, it’s worth keeping an eye on currency fluctuations.
The Real Savings from Offshoring Non-Core Functions
Many of the most outsourced tasks fall under non-core functions essential, but not directly tied to your competitive edge. Think data entry, payroll, virtual assistance, helpdesk, or routine IT support.
When done offshore, these roles maintain output while freeing up your local team and trimming overhead. Some businesses cut costs by up to 70% by moving these functions offshore. One Australian business, for example, outsourced bookkeeping, customer service, and social media scheduling saving over $150,000 per year while improving turnaround times.
Offshoring also gives your local team room to focus on higher-impact work like sales, product development, or customer experience.
Reducing Overhead and Infrastructure Costs
Beyond wages, physical infrastructure is another major cost centre: office rent, electricity, IT gear, software licences, and even cleaning. Offshore providers usually cover all of this. Whether your offshore team is in a managed office or working remotely, you avoid the capital spend on hardware and workspace.
One Melbourne-based professional services firm closed its satellite office after building an offshore team in Cebu. Just on rent, they saved over $4,000 a month which they reinvested into lead generation and CRM automation.
Many offshore partners also handle IT support, cybersecurity, and software licensing. This is particularly helpful for SMEs without in-house IT teams, making security and compliance easier to manage.
Improved Productivity and Operational Efficiency
The benefits of outsourcing aren’t just financial. When you hire offshore, you tap into a broader talent pool especially useful in areas where local skills are scarce or costly, such as web development, digital marketing, or data analytics.
You also get the benefit of time zone coverage. With teams offshore, you can operate outside the 9–5, ensuring round-the-clock support for customers or faster project turnaround.
For example, a Sydney-based agency cut delivery times in half by working with a creative team in the Philippines. The offshore team picked up tasks after hours and delivered by the time the Australian team logged back on.
With proper onboarding and consistent communication, offshore teams can match or even outperform local staff. The key is treating them as part of the team, with clear expectations and regular check-ins.
Long-Term Gains from Offshore Partnerships
Over time, outsourcing delivers more than just cost savings, it gives you a platform for growth. As offshore teams become embedded in your business, processes improve and productivity rises.
Economies of scale kick in when you build larger offshore teams. You can introduce shared roles (like team leads), cross-training, and refined workflows that lower your cost-per-output. Many outsourcing providers also bring industry best practices and insights that add value beyond day-to-day work.
One fast-growing SaaS company tripled its customer base over three years without expanding its local office. Instead, they built an offshore support and onboarding team lifting customer satisfaction while keeping operating costs steady. They later moved QA testing and lead generation offshore too, with strong results.
Estimating Your Business Savings
To work out your potential savings, start by calculating your current annual spend on:
- Wages and superannuation
- Payroll tax
- Admin support
- Office space and utilities
- Equipment and software
Then compare this with offshore rates from a trusted provider. For example, if you’re paying $90,000 per year for an in-house admin team, offshore that might drop to $30,000. Add savings from office space ($15,000) and licensing ($5,000), and you’re looking at around $80,000 saved annually not including time or productivity gains.
Getting the Most Out of Offshore Outsourcing
The case for outsourcing is strong: lower costs, higher flexibility, faster scaling. But to get the most value, you need the right partner, one that understands your goals, fits your culture, and can grow with you.
That’s where Onboard Outsourcing comes in. We help Australian businesses build offshore teams in the Philippines that feel like a true extension of their local operations.
- Local Australian contact
- Skilled, culturally aligned staff
- Transparent, flexible models
- Proven track record with Aussie SMEs
Ready to Build Your Offshore Team?
Scaling with a remote workforce doesn’t have to be overwhelming. With the right hiring strategies, onboarding process, and management systems, your offshore team can be the key to taking your business to the next level.
If you’re ready to make the leap, we’re here to help. Book a free consultation with Onboard Outsourcing today and start scaling smarter!