Doing business in Australia is incredibly difficult – the business environment is not geared towards small to medium enterprises and the cost of doing business continues to go up.
The difficulty of doing business locally is compounded by the rapid globalisation of the business environment through the advent of digital communication tools breaking down geographical barriers.
Simply put – Australian businesses are now competing in a global business environment.
With the minimum wage in Australia now at an incredibly high (compared to other nations) $672 week (or $32,000 a year) for unskilled positions, sourcing key roles for your business may not be financially viable.
When other Government mandated benefits, taxes, and fixed costs are added onto this figure, it can blow out exponentially. These other costs can include superannuation, sick and annual leave, office space, shared service support and CPI wage increases. In many cases, the true cost of employing someone locally can be double or triple their annual salary!
A real-world example – Graphic Designer
The cost benefits of employing someone in a country like the Philippines are quite easy to see. Let’s look at the cost of hiring an intermediate graphic designer in Australia with three plus years of experience.
Based on Payscale.com.au, the average wage for sourcing someone in Australia is approximately $62,000 per year before factoring in superannuation, leave benefits, payroll tax, office space, IT equipment and other expenses associated with this role. Factoring all of these additional costs takes the total cost for employing someone locally to over $100,000 per year! This is an enormous cost and always laden with risk with average tenure of graphic designers being between two to four years.
Now, compare this to the cost of a senior graphic designer in the Philippines. They have experience with the entire Adobe Creative Suite (Illustrator, InDesign and Photoshop), have excellent English and proven experience working in an agency environment. Now, add on full human resource support, recruitment, onboarding and monthly provision of office space and IT services. How much would this cost your business? Well, if you leverage a service provider, you could expect to pay around $2200 a month in total costs or $26,400 a year. That is just $550 a week for a full-time team member, working in a serviced office with full shared service support.
You manage your team member just like you would someone working from home in Australia. Think about $550 per week versus $1,923 per week in costs (factoring in wages and fixed costs). Hiring a graphic designer for your business locally may not be viable, but a highly-skilled offshore resource may be! This team member would allow you to market and position your business professionally to your customer-base and empower you in creating a point of differentiation.