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Researching global labor costs is a fundamental step of any business’s financial planning, as they can vary dramatically depending on the region or country.
These costs include not just salaries but also taxes, benefits, compliance costs, and other employee-related expenses.
For companies looking to hire offshore (in distant countries) or nearshore (in nearby countries), understanding these differences allows them to maximize cost savings while ensuring compliance with local labor laws.
Labor cost averages across countries
Use our map below to navigate different average costs around the world, originally organized and converted in USD by the International Labour Organization.
A country’s average global labor costs are calculated by considering several key factors, which vary depending on the country’s economic conditions, legal framework, and industry standards.
The process typically involves adding different components of employment-related expenses, including wages, benefits, and other costs associated with employing workers.
Global labor costs: key considerations for outsourcing talent
While labor cost is a crucial aspect, it’s equally important to balance cost savings with the quality of talent. Hiring the cheapest option may not always be the best choice, as it could lead to lower productivity, higher turnover, or challenges in managing a distributed workforce.
Other elements to keep in mind include different time zones, language barriers, complex international regulations, and cultural fit.
You should aim to find the right balance between cost and quality. If you are unfamiliar with local laws, taxes, and payroll regulations, working with an employer of record (EOR) efficiently manages global hiring and avoids global risk.
An EOR serves as the legal employer of workers in foreign countries, handling payroll, taxes, benefits, and compliance while allowing you to focus on managing the employee’s day-to-day responsibilities and growing your business.
