That offshore discount isn't one flat number for every hire

The seat a firm most needs to fill offshore is the one the discount covers least. ConnectOS says the saving on an offshore hire is not one number. Outsource Accelerator reported that the Melbourne outsourcing firm's expected revenue is A$100 million this financial year, about $69 million, up from A$80 million. Founder Steve Evans told the Australian Financial Review that an offshore worker costs about a third of an onshore one, once payroll taxes, superannuation and equipment are counted.

Then came the qualifier. Higher-demand technology roles sit at around half that saving, Evans said, because demand in the Philippines is as high as it is in Australia. The firm employs more than 2,500 outsourcing staff and about 140 support people, serving more than 350 customers. More than 20 of them are accounting firms.

Where the discount thins

A third is a geography number. Half of it is a market number. The first compares what a desk costs in Manila against what one costs in Melbourne. The second compares what a scarce person costs when two countries bid for them. Those are different claims, and the brochure quotes the first one.

Evans put the qualifier on the record himself, which rate cards don't. Offshore pricing is a second labor market rather than a discount applied to the first. It has its own shortages. A shortage lifts a price there exactly the way it does here. Cheap is a fact about who else wants the person.