How to Calculate Savings from Remote Staffing
A complete cost model for calculating real savings from remote staffing - including the hidden costs most comparisons miss.
What you will learn
- The three cost buckets in any hire: direct, indirect, and infrastructure
- How to benchmark US and UK fully-loaded costs correctly
- Worked examples for bookkeeper, SDR, and developer
- When savings are real versus when they are accounting fiction
- How to communicate savings to stakeholders
Before you start
- You have at least one local benchmark salary
- You know the role you are comparing
- You have access to your own benefit and overhead costs
- You are willing to do 30-60 minutes of honest arithmetic
The step-by-step process
Step 1: Start with fully-loaded local cost
Most cost comparisons start with base salary and stop there. That understates local cost by 30-50%. A proper fully-loaded US cost includes: base, FICA and unemployment taxes (roughly 7.65% employer share plus state UI), benefits (health insurance, retirement, PTO), equipment (laptop, software), office and utilities (if applicable), and an allocation of management overhead. The Bureau of Labor Statistics publishes Employer Costs for Employee Compensation (ECEC) data that benchmarks these at about 30% above base.
Step 2: Build the remote cost the same way
Build the remote cost on the same basis: salary, statutory employer costs (India provident fund, gratuity, bonus), infrastructure (laptop, tools), and management overhead. Through a managed staffing model, these usually roll into a single monthly fee. The comparison should be fully-loaded-local versus fully-loaded-remote, not base versus base.
Step 3: Include transition and onboarding costs
Hires have one-time costs: recruiting (fee or internal hours), onboarding time, and sometimes temporary overlap with a departing local employee. Amortize these across Year 1. For a typical professional role, one-time costs add 10-20% to the first-year total. For stable multi-year comparisons, they become negligible.
Step 4: Worked example: Bookkeeper
A US bookkeeper at $55k base typically runs $70k-$75k fully-loaded (BLS ECEC). A remote bookkeeper through a managed staffing partner runs $1,500-$1,900/month, or $18k-$23k per year fully-loaded. Net savings: $47k-$55k per year per role, or roughly 65-70% cost reduction at parity quality. Savings hold across similar roles (customer support, VA) in a similar range.
Step 5: Worked example: Remote SDR
A US SDR at $60k base and $80k OTE typically runs $95k fully-loaded including benefits and overhead. A remote SDR through managed staffing runs $1,700/month base plus variable, or about $25k-$30k fully-loaded. Savings of $65k-$70k per year at comparable output are common. As with any sales role, variable compensation should be structured to reward output, not just location.
Step 6: Adjust for quality and productivity assumptions
Honest savings modeling includes a productivity adjustment. For well-vetted hires with proper onboarding, output is typically at parity (100%) with the local equivalent. For poorly onboarded or poorly matched hires, productivity can land at 70-80%, narrowing the savings materially. Model conservative (80%), expected (95%), and optimistic (105%) scenarios.
Step 7: Summarize savings in a one-page memo
When communicating savings to stakeholders, keep it to one page: current local cost (itemized), remote cost (itemized), productivity assumption, net savings in year 1 and year 2, and key risks. Transparency beats optimism. Savings that hold up under scrutiny build credibility; inflated numbers do not survive the first board review.
Common mistakes to avoid
- Comparing US base to India base - understates savings and undermines credibility
- Ignoring one-time costs - overstates year-1 savings
- Assuming 1:1 productivity with no evidence - flatters first reports but fails audits
- Not accounting for management overhead - a hidden cost either way
- Treating savings as budget cuts - reinvest savings in scaling the team
Tools and templates
- U.S. Bureau of Labor Statistics ECEC tables for fully-loaded local cost
- Teckas ROI Calculator
- Glassdoor and Payscale for country-specific salary bands
- A simple spreadsheet template (our calculator includes one)
- Your own payroll and benefit data
Skip the trial-and-error.
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Book a Free Discovery Call →Frequently asked questions
What is a realistic savings percentage from remote staffing?
Most knowledge-work roles save 55-75% fully loaded when comparing remote staffing in India against US or UK equivalents, assuming parity productivity.
Do savings persist year over year?
Yes, but they compress slightly as remote salaries rise. Typical compression is 2-5% per year, still leaving substantial multi-year savings.
What if productivity is not at parity?
Model it. If productivity lands at 80%, savings shrink proportionally. Well-run engagements typically reach parity within 90-120 days.
How should savings be communicated to the board?
A one-page memo with fully-loaded costs, assumptions, and risks. Transparent, conservative numbers survive scrutiny; aggressive ones do not.
Should savings be reinvested or returned to budget?
Most mature operators reinvest part of the savings in scaling the team and keep part as margin. This compounds the strategic value.