As labor costs rise and margins tighten, U.S. businesses face a critical decision:
Keep building teams onshore—or shift strategically offshore to scale smarter
Over the past five years, U.S. wages, benefits, and compliance expenses have risen faster than revenue growth for many industries. For leaders trying to expand without burning cash, the staffing model you choose can determine your company’s competitiveness, flexibility, and long‑term profitability.
To make the right call, you need a crystal‑clear understanding of what you’re really paying for with onshore roles—and what you stand to gain by offshoring.
What Is Offshoring and Onshore Staffing?
Onshore staffing refers to hiring employees within your home country—typically where your headquarters is located. This model offers proximity and cultural alignment but comes with higher labor and operational costs.
Offshoring, on the other hand, involves delegating tasks or entire business functions to a team in another country, such as the Philippines.
The benefits of offshoring go beyond cost savings; it’s about accessing skilled talent, improving scalability, and maintaining operational efficiency.
Cost Breakdown: Offshoring vs Onshore Staffing
Here’s a simplified costs comparison between a mid-level professional in the U.S. versus an offshore counterpart in the Philippines:
| Expense Category | Onshore (U.S.) | Offshore (Philippines) |
| Base Salary | $60,000–$80,000/year | $15,000–$20,000/year |
| Benefits & Insurance | $10,000–$15,000/year | Included in service fee (statutory benefits like 13th month pay, SSS covered by provider) |
| Office Space and Utilities | $8,000/year | Included in provider cost |
| Recruitment and Training | $5,000–$7,000 | Included in provider cost |
| Compliance and Taxes | High | Minimal (handled by provider; potential incentives) |
Key takeaway: Offshoring can reduce labor costs by up to 70%, while eliminating overhead expenses like office space and compliance management.
Hidden Costs of Onshore Staffing
While onshore staffing offers convenience, it comes with hidden expenses that quickly add up:
- Payroll taxes and insurance premiums
- Office rent and maintenance
- Employee turnover costs
- Recruitment fees and onboarding expenses
These costs often make scaling onshore teams financially challenging, especially for growing businesses.
U.S. employers spend an average of $12,000 per employee annually on benefits alone, according to the U.S. Bureau of Labor Statistics.
Why Offshoring Is Cost-Effective
Offshoring, particularly in the Philippines, offers significant financial advantages:
- Lower labor costs without sacrificing quality: The Philippines is home to highly skilled professionals fluent in English and trained in global business standards.
- Reduced overhead: No need to invest in office space, utilities, or compliance infrastructure.
- Scalability: Easily expand your team without the financial strain of onshore hiring.
When comparing offshoring vs onshore, the numbers speak for themselves. Offshoring in the Philippines allows businesses to save thousands annually while maintaining operational excellence.
Beyond Cost: Strategic Advantages of Offshoring
Cost savings are just the beginning. Offshoring provides:
- Access to a global talent pool: Specialized skills in IT, customer service, creative, and back-office support
- Time zone coverage: 24/7 operations for better customer experience
- Business continuity: Offshore teams ensure uninterrupted workflows during local disruptions
Conclusion: The Smarter Choice for Growth
When weighing offshoring vs onshore cost breakdown, offshoring, especially in the Philippines, emerges as the smarter, more sustainable choice. It’s not just about cutting costs; it’s about building a lean, agile, and globally competitive organization.
Ready to reduce costs without cutting quality?
Partner with iSupport Worldwide and discover how offshoring in the Philippines can transform your business.
Schedule a consultation today.
