Outsourcing vs hiring: the cost comparison nobody shows you
The full first-year cost of a local hire against outsourced support, including the six costs that never appear in the salary conversation.
- Salary is roughly 60% of the true first-year cost of a hire.
- Recruitment, equipment, employer tax and holiday cover add 40% or more.
- Outsourcing wins on cost and speed; hiring wins on availability and control.
- Below 20 hours a week, hiring almost never makes financial sense.
The number in the job ad is not the cost
A $60,000 salary is not a $60,000 cost. Employer tax and national insurance add 12 to 22 percent depending on jurisdiction. Equipment is $1,200 to $2,500 in year one. Recruitment through an agency is 15 to 25 percent of first-year salary.
Add holiday cover, training time before productivity, and the software seats. The real first-year cost of a $60,000 hire is typically $85,000 to $95,000.
Run the comparison properly
Take the hours you actually need. Thirty hours a week at $28 an hour is $43,680 in salary. Add 22% employer overhead: $53,290. Add $3,000 recruitment and $1,200 equipment: $57,490 in year one.
The same thirty hours outsourced at $9 an hour is $14,040. No recruitment fee, no equipment, no employer tax, no holiday cover cost.
That is a 76% saving in year one and roughly 70% in subsequent years once recruitment drops out. The gap narrows but never closes.
Where hiring genuinely wins
Immediate availability. An employee at the next desk can be interrupted. An outsourced person on a different continent cannot, and that friction is real.
Deep institutional knowledge over years. Someone who has been in your business for five years knows things that were never written down.
Anything requiring physical presence, obviously, and anything where the legal or regulatory position requires an employee rather than a contractor.
Where outsourcing wins
Speed. Two weeks to a working arrangement against two to four months to hire, onboard and reach productivity.
Flexibility. Scale hours up or down with thirty days notice rather than a redundancy process.
Cost, obviously — but the more important version of that argument is that it makes previously uneconomic work economic. Tasks you would never hire for become worth doing.
The threshold
Below twenty hours a week, hiring rarely makes sense. The fixed costs — recruitment, equipment, management overhead — do not amortise across enough hours.
Above thirty hours a week of judgement-heavy work requiring deep context, hiring starts winning on effectiveness even while losing on cost.
Between those two, it depends on how much of the work is repeatable. Repeatable work outsources well. Judgement work does not.
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Related questions
Is outsourcing reliable?
It depends entirely on the arrangement. A named person on your account with documented processes is reliable. A shared ticket pool is not. Ask which one you are buying.
What about time zones?
Ask whether they work your hours or theirs. We build shifts around client time zones and state it in the contract — many providers do not, and that is where the frustration comes from.
How do I manage someone remotely?
The same way you manage anyone: clear outcomes, written processes, a regular check-in. Remote management fails when the work was never defined properly, which is a management problem rather than a remote one.
