Staffing costs are one of the largest expenses for most businesses, accounting for anywhere from 40% to 80% of their gross revenue. With inflation and economic pressures on the rise, most businesses are looking at how to reduce staffing costs without sacrificing quality services.
Whether you’re a startup, small business, or large enterprise, outsourcing staff is a proven strategy for reducing labor costs, while streamlining operations. By leveraging external talent, you can maintain your high service standards, while significantly reducing staffing costs and overheads, even up to as much as 70%.
These are some tips for how to reduce staff costs and how outsourcing may benefit your business, in more ways than one.
How does outsourcing reduce labour cost?
Outsourcing provides businesses with a powerful tool to reduce labour costs without sacrificing quality. By hiring external teams, you eliminate costs related to recruiting, training and managing in-house staff, already saving you countless hours, money and resources. It also gives you the flexibility to scale your workforce up or down based on your demand, helping you save money during quieter periods and avoid the costs of overstaffing.
Reducing Turnover in the Workplace with Outsourced Staff
High staff turnover can drain time, money, and morale. If you’re reading this, we likely didn’t even need to tell you that, as you’re probably looking for how to reduce staff turnover. However, if you’re constantly rehiring for the same entry-level or admin-type roles, you’re not alone. Many U.S. businesses face this challenge, particularly in industries where job satisfaction is lower, but labor costs are high.
One very effective, and also very cost-efficient, solution is outsourcing. Hiring skilled offshore staff, particularly in regions like the Philippines, can help you reduce staff churn, keep things running smoothly, as well as boost your bottom line.
Here’s how outsourcing can be a game-changer when it comes to reducing turnover in the workplace.
Why People Leave So You Can Learn Ways to Reduce Turnover
Before you can fix any problem, you need to understand why it’s happening. Some of the most common causes for why high staff turnover happens is due to:
- Low job satisfaction
- Limited career progression
- Repetitive or unfulfilling work
- High local wage expectations for low-skilled roles
- Toxic or high-pressure workplace culture.
It may also be the type of job and its perception. For example, in the U.S., admin and customer-facing roles, like data entry, appointment setting or reception jobs, are seen as stepping stones, not careers. As a result, people often won’t stay in these roles for long, leaving employers in a constant recruitment loop.
How to Reduce Staff Turnover With Outsourced Teams
1. Fill low-retention roles with long-term offshore talent.
Many roles that are seen as short-term, stepping-stone roles in the U.S., like customer service jobs, are seen as stable and desirable jobs in countries like the Philippines. These team members often stay longer, take pride in their work, and value the opportunity, reducing your turnover headaches.
2. Reduce labor costs without compromising on quality.
Hiring locally for roles that require minimal training but demand high reliability often leads to paying premium rates, or facing constant churn when you don’t. Outsourcing gives you access to experienced professionals at a fraction of the cost (up to 70% less), helping you reduce staffing costs and reinvest savings elsewhere.
3. Access to pre-vetted, trained talent.
Outsourcing providers, like Offshore MVP, maintain a waitlist of qualified candidates ready to jump in, saving you the time and stress of recruiting. Plus, outsourced professionals are often cross-trained and experienced in multiple systems and industries, reducing onboarding time, and even bringing new skills to the team.
4. Increase team stability without overhiring.
Instead of hiring more people locally just to cover turnover, outsourcing helps you always have the right number of people. You can maintain productivity and service quality while avoiding the steep costs of constantly having to replace people. This applies to many roles, from customer service to admin support, with call center outsourcing being just one common example.
5. Support existing in-house teams.
Your in-house teams also benefit from outsourcing lower-interest, simpler or repetitive tasks. By reducing the stress of your in-house team members, or off-loading the tasks that take up their time from other higher value tasks, you’ll likely increase in-house retention rates, as well as retaining people in those hard-to-keep roles too. This kind of support can make a real difference in industries facing ongoing labour shortages. For example, car dealerships can benefit from outsourcing customer support to handle routine enquiries, freeing up their sales teams to focus on conversions. It’s a win-win.
How do you reduce staff turnover without sacrificing performance?
Reducing staff turnover isn’t just about throwing perks or pizza parties at employees. It’s about creating a sustainable workplace, using outsourcing to fill high-churn roles with committed, experienced professionals who value their work, while giving your local team more room to grow and focus on higher-impact tasks. The result is better retention, better morale, and better business performance all-round.
Chat with us today about building a more stable, high-performing team.
