Now that the economy is finally on the mend after the never-ending pandemic slump, it is now time for businesses to pick themselves back up by their bootstraps and start making money again. And they are. Employees are physically going back into the office, people are hustling and bustling to and from their jobs, and businesses are interacting with each other once again. Things seem to be getting back to “normal.”  

But there is one thing lurking in the background that still needs to be addressed by business owners: the rise in the national minimum wage and the impending continuous rise for the next four years. 

With the Raise the Wage Act looming over business owners, which is already in effect and will continue until 2025, people are scrambling to find a creative solution to cut costs, save money, and make quick decisions to save their bottom line. 

It is time to ask yourself this question: what are you going to do to not only stay afloat during these imperfect economic times…but to thrive

If you’re a business owner who is interested in learning more about outsourcing for a remedy to the minimum wage problem, keep on reading. 

Downsides to the increase in the minimum wage

Of course, raising the minimum wage is favorable for many groups of people––no one is denying that. We acknowledge that more money for individuals is a good thing. More money in pockets means more money is being spent, which means more money for businesses like yours. This doesn’t negate the fact that business owners get the brunt of the situation. Both sides of the coin are true simultaneously. 

Where there are upsides, there are downsides.

When wages rise, where does a company get the additional money to pay their employees? 

Do they cut staff hours? Raising prices is an option, yet that might cause a company to lose valuable customers and clients since they will no longer be competitive. Certain positions can be moved around or taken out of the equation entirely, but who actually wants to do that?

Losing valued employees and important customers is the ultimate downside for a business owner to endure. 

Since future minimum wage increases aren’t going anywhere, now is the time to be proactive and seek out alternate options to tackle the problem. 

Have you ever thought about outsourcing?

Outsourcing as a viable option 

An article in Forbes presented results from a survey that was given to employers regarding how they will keep their business running even after being negatively impacted by the minimum wage rise.

These were the results:

89% report that they would experience lower earnings, 

58% would decrease their number of employees, 

60% would reduce employee hours,

67% would leave an open position unfilled, 

87% would raise prices and

56% would increase their number of part-time employees.

There is one option that they did not mention in the survey––the viable option of outsourcing.

Outsourcing employees offshore can save business owners a lot of money. 

A good place to start when considering the option of outsourcing is to look at which positions and skillsets can be done by someone else remotely. 

Areas that may be worth outsourcing include IT, data entry, accounting, and payroll. Once employers determine what areas or skill sets they can easily find remotely and overseas, they can start the hiring process. 

Choosing to outsource employees can have tremendous benefits on your company. Why not leverage the most efficient and cost-effective strategy? Keep your prices the same, keep your employees content, and don’t lose income yourself. By outsourcing, you can have it all.

Advantages of outsourcing 

Outsourcing, such as 4D Global does, allows employees to pay employers less than they would in the United States and avoid the negative effects of the rising minimum wage. There are big-name companies around the United States that have gone the outsourcing route such as Google, Slack, Apple, and Nike. Outsourcing is not only for large companies; even small ones can reap the benefits of choosing this business model. 

Some of these advantages include: 

  • lower costs (due to economies of scale or lower labor rates)
  • increased efficiency
  • variable capacity
  • increased focus on strategy/core competencies
  • access to skills or resources
  • increased flexibility to meet changing business and commercial conditions
  • accelerated time to market
  • lower ongoing investment in internal infrastructure
  • access to innovation, intellectual property, and thought leadership

Outsourcing is a far better option from compliance, price, and speed of claims processing standpoint.

One major benefit of outsourcing is that your business can be open 24/7; work can be done while you are sound asleep. 

For example, employees do all data entry during the U.S. evening time and are working while you are sleeping creating a 24-hour service—something you can not get from a U.S. employee. It can’t get any more convenient than that.

How much outsourcing can save you

Using differential cost analysis is how you will determine what your outsourcing costs will be and how much you will save from choosing it. 

A business article on the topic describes four steps to take to determine outsourcing costs.

  1. As stated previously, decide which specific operations you will choose to outsource. Think about the benefits of allowing an offshore employee to take over those job responsibilities, and decide how many employees you will need for those operations. You’ll want to keep core operations in-house and choose services such as data entry or IT to be done offshore. 
  1. Once you determine which jobs you will outsource, how many employees you’ll need for those jobs, and what qualities and characteristics you want in those employees, you can start doing some math. Figure out how much you’ll save by choosing outsourcing over keeping or hiring employees for these jobs in-house. Think about these things: hiring costs, software, hardware, other equipment, physical space, office supplies, travel expenses, benefits, in-house training, etc. And of course, don’t let out the salary. 
  1. Now take the total amount you have calculated and subtract the amount that you might receive from selling the existing supplies, equipment, and software, if that is applicable. 
  1. Research how much you can pay someone offshore to do the same exact jobs. 
  2. To calculate the final cost savings from outsourcing, simply take the difference between the total in-house costs and the total outsourcing cost.

Even though these calculations will only be an estimate, you can easily see what a huge difference outsourcing can make monetarily. 


Choosing to move certain operations offshore will be highly advantageous to your business and your bottom line. As an employer, choose to outsource employees and spend less money as the minimum wage continues to rise––and still continue to grow and expand your business at the same time. Outsourcing is a realistic and efficient way to manage the minimum wage raise.

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