The number nobody puts in the business case
Offshore hiring decisions get made on a salary comparison. Someone builds a spreadsheet, puts the local cost in one column and the offshore cost in the other, and the gap is large enough that the decision looks obvious.
The spreadsheet is usually right about the salary and wrong about the total, because it assumes the person you hire is the person you still have in two years. In offshore support and technical roles, that assumption fails more often than it holds.
What the industry figures actually say, and how much to trust them
Two numbers get quoted constantly in this space.
The first is contact centre attrition, commonly cited in the range of 30 to 45% a year, with offshore voice operations often quoted higher and average agent tenure sitting around 14 to 15 months.
The second is the cost of replacing an employee, generally attributed to the Society for Human Resource Management and usually given as 50 to 200% of annual salary depending on seniority.
Both are worth knowing and neither is worth relying on.
Trace either figure and you find the same pattern: outsourcing vendors citing other outsourcing vendors, aggregator sites citing the vendors, and no primary research at the bottom of the chain. The SHRM range in particular is quoted almost universally without a locatable SHRM publication behind it. The direction of both numbers is not in dispute. The precision is entirely invented.
So use them as an order of magnitude and calculate your own.
How to work out what turnover actually costs you
Four components. Only the first appears in most budgets.
1. Recruitment. Sourcing, screening, interviewing, offer, notice period. Four to eight weeks of elapsed time and a real cash cost, whether you pay an agency, a sourcing fee, or your own team's hours.
2. Ramp. The period between someone starting and independently working at the standard of the person who left. For a Tier 1 support role, perhaps six weeks. For a Tier 2 engineer on a product with any real complexity, three to six months is honest. For a developer inside an unfamiliar codebase, longer.
3. Output quality during ramp. This is the component that never gets counted and is usually the largest. Slower resolutions. More escalations into engineering, which costs senior time at senior rates. Mistakes that reach customers. A backlog that builds while someone learns.
4. Management time. Yours, and your team's. Interviewing, onboarding, reviewing, correcting, and absorbing the work the departed person used to absorb.
Add those together, multiply by your actual annual departure rate, and compare the result against the difference between the cheapest provider and the one that keeps people. In our experience the comparison is rarely close.
A worked example
Take a technical support specialist at USD 2,500 a month all-in, which is roughly what a senior one costs in Indonesia.
Recruitment might cost a month of that salary equivalent once you count sourcing and your own time. Ramp to full productivity on a complex product, call it four months at an average of 50% effective output, so two months of salary equivalent lost. Escalations into engineering during that period consume senior time that is worth considerably more per hour than the support salary. Management overhead adds more.
Without inflating anything, replacing that one person costs somewhere between three and six months of their salary. At 40% annual attrition across a team of five, you are replacing two people a year, every year, in perpetuity.
The saving you captured by choosing a provider USD 300 a month cheaper is USD 18,000 over that period across the team. The turnover is costing more than that, and it is also costing you customer experience, which does not appear in any column.
Why offshore support churns, and what actually stops it
The causes are consistent, and pay is rarely the first one.
Isolation. Someone working alone from home for a company in another timezone, with no colleagues nearby and no local employer, has very little holding them. This is the most common cause and the least discussed, because it does not show up in an exit interview as clearly as money does.
No progression. A support role that leads nowhere loses its best people to roles that do. The strongest performers leave first, which is the expensive way round.
No local HR presence. When something goes wrong in someone's employment and the only route is a support ticket to a platform in another country, small problems become resignations.
Fixed-term contracts. Employing people on rolling fixed-term contracts to preserve flexibility tells them exactly how much commitment to give back.
What works is unglamorous and mostly structural:
Permanent employment. In Indonesia that means PKWTT contracts rather than fixed-term PKWT. It is also the compliant instrument for ongoing work.
A physical place to work. Dedicated workspaces solve the isolation problem more directly than any engagement programme.
Local HR who know the person. Someone reachable in their timezone, in their language, who can resolve a problem before it becomes a resignation.
Benefits above the statutory floor. In Indonesia, meaningful supplementary cover above BPJS.
Somewhere to go. Professional development that makes the role a step rather than a destination.
Colleagues. Contact with other professionals in the same situation, which is the part most remote-first arrangements never provide.
What this looks like in practice
MixWork employs people permanently on PKWTT contracts, provides dedicated workspaces in Jakarta, includes Total Care 360 with every Employer of Record engagement at no extra cost, runs monthly check-in calls with both the employee and the client, offers Flex Benefits above the statutory floor, holds cultural activities with other professional remote staff, and runs professional learning sessions.
Retention runs above 90% across the board.
That figure deserves a caveat rather than a flourish. The 30 to 45% attrition benchmarks quoted earlier describe contact centre agents, typically on high-volume voice work and often on shifts. MixWork places permanent professional staff into product teams. Those are different populations doing different jobs, and part of the difference is the role rather than the model.
What it does demonstrate is that the churn most buyers treat as an unavoidable cost of offshore hiring is largely a consequence of how the arrangement is built. Build it differently and the number changes.
The question to ask a provider
Not "what is your attrition rate", because everyone has an answer ready.
Ask these instead:
What contract type do you employ people on, and why?
Where do they physically work?
Who in your organisation knows this person by name, and where are they based?
What happens, specifically, when someone gives notice at month nine?
What is your average tenure, not your attrition rate?
The answers separate providers who have thought about retention from providers who have thought about pricing.
Working out your own number
If you are building the business case, the cost calculator will give you an all-in monthly figure for a specific role, which is the input the calculation above needs. Our guide to Employer of Record in Indonesia covers the employment mechanics, and the article on hiring a technical support team in Indonesia covers what these roles cost and how to structure them.
Or book a free consultation and we will work through the numbers for your specific roles, including the ones that make the comparison less flattering to us.
