Remote work and Outsourcing found new stardom amidst covid-19 lockdowns and subsequent employment losses. Organizations that survived are now facing an economic pandemic. Due to the stimulus checks and rising attrition in the US, it is becoming increasingly harder to employ a workforce. Even if you hire the required talent somehow, the operational cost is steep because of the pending increased $15 minimum wage. So, how do companies battle this dilemma?

The answer is offshore Outsourcing.

Battling Turnover, Attrition, And Minimum Wage Increases with Outsourcing

Attrition and Turnover in the US

As a reaction to Covid-19, many governments created specific financial plans similar to the stimulus relief packages by the US Govt. Stimulus checks worth $1400 were distributed on average, which consequently created a mindset that it pays more to stay home than to actually work; this results in even more increased attrition than ever before.

Attrition rates have always been on the rise in the US, more so now that the pandemic’s after-effects are felt. The Govt. is pulled on both sides for the minimum wage raise decision, where economics has to battle sentiment. However, we cannot overlook the facts: –

According to, A Bureau of Labor Statistics report says that the US turnover was:

  • 43.3% in 2017

  • 44.5% in 2018

  • 45% in 2019
  • An average of 54% in 2020 – 2021

However, in a disparate workforce report by ADP, these numbers are shown to have grown at an alarming rate:

The national average turnover rate is 82.2% in Q1 2021 – ADP workforce report

Turnover and attrition are top drivers for companies to find alternative solutions, in order to function, irrespective of company size. As firms are forced to comply with the $15 baseline, they are presented with two choices to offset it; either raise the price of their product or find other ways to cut cost. Therefore, considering outsourcing is the only option to maintain productivity and quality.

The Mindset of the Modern Worker

According to an article in the New York Times, there is a labor shortage despite many people available for work and currently unemployed. Added unemployment benefits may serve as an incentive to not return to work, completely defeating the purpose of restoring jobs later on.

40% of Americans would earn more if they stayed unemployed-

Some of the debatable reasons state that the pandemic rescue plan is too generous in providing unemployment benefits compared to actual working incomes. It’s no wonder why some would choose to stay unemployed rather than earn lesser by actually working a job.

With the general mindset changing towards the gig economy, companies will have a hard time finding anyone willing to work full time and long-term. All the more reason to outsource to offshore locations for access to highly dedicated professionals to become part of your internal team.

Outsourcing Poised Even Better

A higher retention rate can help maximize a company’s profits by 4 times ( Working remotely has increased employee expectations for better benefits and more job perks. Organizations now need to develop versatile working rules to placate their resources. If not, then attrition would only increase. This translates to companies facing increased hiring costs and even more internal expenses for training and replacements.

According to, voluntary turnover costs for a company exceed $600 billion annually.
The cost of replacing an employee for a company ranges between more than one half to twice their annual salary – Gallup

Not only does turnover upset your operations, but also the cost of replacing employees is a huge load on your wallet. It also gives your competitors the time and edge to beat your business in the market, while you are looking for the right fit.

As per,

One-third of newly hired employees quit their job within 6 months

With an outsourcing company, employee turnover is cared for because your BPO partner arranges for dedicated, highly talented resources, bearing all expenses. All the while, the end cost is considerably lower for the client. The associated functional effort is also the outsourcing partner’s responsibility to manage.

A seasoned BPO partner can provide you instant staffing of the best available resource in global data redundant locations. The cost of living is lower in some parts of the world like, Philippines, Pakistan, and China; which contributes to readily available, qualified resources that can work in shifts to give you 24/7 operational capability.

How the $15 Baseline affects Your Company

Raising the minimum wage would consequently increase inflation. To avoid that, all job levels from low income to mid-level posts would have to accommodate the wage shift. This domino effect would mean organizations would have even more burden on their finances. As a result, companies would replace as many possible human tasks with automation to manage the sudden increase in pay scales. According to an article on Forbes, workers will be displaced by technology in almost every industry to manage increased costs.

A McKinney research suggests; the future of work holds more adoption of AI for jobs that require physical contact during Covid-19 and after.

Also in another study,

The Congressional Budget Office estimates a reduction of 1.4 million workers in consequence of the wage act.

With talented employment scarce and the future showing uncertainty, businesses will likely face a storm in terms of revenue and overall availability of long-time, high-quality, dedicated resources to keep operations steady. The work would still have to be done. With a substantial number of people becoming unaffordable assets to organizations, the alternative for this work is outsourcing.

About 68% of US companies outsource to reduce costs

Offshoring is the solution that allows companies to effectively deal with overlooked costs such as training, QA, recruiting, healthcare, turnover cost, etc. while proving high-quality resources to replicate the same as the in-house standard.

How Premier BPO Can Help

In light of the minimum wage act, we realize the need to effectively manage internal expenses and ROI for any company. Attrition is a major problem in the US, one which Premier BPO can handle expertly. Our attrition rates are as low as 2% monthly, with dedicated, proficient resources working round the clock.

With an internal employee wage of $15 an hour, your fully loaded cost would easily reach $32 – $33 total per employee per hour. You can calculate an estimate of cost savings at our interactive ROI calculator to see how offshoring operations will reduce your expenses.

An offshore outsourcing company with years of industry experience; we at Premier BPO, combine technology and manpower for customized solutions and long-term benefits. We immerse ourselves within our client’s culture for the achievement of aligned goals. We offer a wide range of services from Back-Office, IT Support, Contact Center Solutions, E-commerce Support, Finance & Accounting Services, Healthcare Solutions, etc. Contact us today to get a free expert consultancy.

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