I’ll just get this out of the way, having an offshore team is not about stopping investment in the UK, Frontline clients don’t stop recruiting in the UK because they have an offshore team in Manila, but they can be more selective about who they recruit.
I’m sure you have answered hundreds of questions on the cost of employment recently and I’m sure you’ve run your own firm’s numbers to see how it is going to affect your resourcing strategy for 2025 and beyond.
Read on for my take on what the rising cost of employment means to us and the behaviours I believe it should drive.
In the wake of the UK’s recent budget announcement, businesses across the nation are facing a new reality: the cost of employment is on the rise. With increased minimum wage and National Insurance contributions, employers are under pressure to reassess the financial implications of every hire.
Recruitment mistakes are no longer just unfortunate missteps—they carry a substantial financial penalty, both in terms of recruitment fees, a hefty cost from the UK Gov and not to mention the other associated costs of employment, which will also run into the £000’s.
With this new high-cost environment, the need for focused performance management has never been greater. Businesses can no longer afford to carry underperforming employees or those who are happy to coast through their careers.
Whilst increased costs could deter some companies from expanding their workforce, they should not be viewed as a reason to stop investing in your onshore team. Rather, it should be seen as a call to refine your resourcing and workforce strategy, focusing on the selection and development of employees; whilst also integrating offshore support to enhance team productivity and cost efficiency.
1. The Cost of Poor Recruitment Decisions
Every hire is an investment, and with significantly higher employment costs, every hiring decision needs to be more calculated. Gone are the days when hiring managers could afford to ‘take a punt’ on someone.
With recruitment fees usually around 20% of starting salary, a minimum of £8k for an accountant (depending in region) can be expected. For many firms, this is significant, particularly when compounded by the onboarding costs and the additional resources required to bring a new employee up to speed.
To add to the growing list of things to consider, (what seem to be) counter productive employment policies giving candidates full rights from day 1; may make recruitment mistakes even costlier. An unfit hire can quickly turn into an expensive liability, resulting in not only lost productivity but also the drain on existing resources required to manage performance issues, rehire, or reassign work.
So, what can be done about it… I believe firms will need to be more decisive and strategic approach to recruitment and people management.
2. Performance Management
Firms simply cannot afford to carry underperformers. Where remote work is prevalent, staff need accountability on delivering to timescales. Performance management is essential to ensure that every member of the team is contributing to the organization’s success.
3. The Sum of the Whole Team Is More Than Its Constituent Parts
Businesses must be more deliberate when hiring new employees. Recruitment can no longer be about putting ‘a bum on a seat’; it must be about selecting candidates who can add measurable value to the organization.
This requires a thorough understanding of both the technical skills and cultural fit needed to succeed within the organization. A well-considered recruitment process is an investment that pays off in the long term, as it reduces turnover and strengthens the team’s collective capacity.
Beyond assessing hard skills, businesses should evaluate the alignment of a candidate’s personal values and the company’s culture. A hire who resonates with the company's mission is more likely to stay motivated, reducing turnover costs and enhancing overall team morale.
This level of rigor in recruitment not only mitigates some of the financial risk, but also fosters a positive team dynamic, which is crucial for sustained productivity and innovation.
4. Offshore Support: An Efficient Solution to Enhance Onshore Teams
As part of every recruitment and resourcing plan, firms need to balance the rising costs of employment in the UK with offshore support. By integrating an offshore team, businesses can achieve cost-efficiency without compromising the quality of their workforce.
With the right training and support, offshore teams can handle all tasks that their UK team currently does, (I’m happy to introduce you to many of our existing UK firms already doing this).
Offshore teams can also help lighten the load by taking on routine or administrative tasks. This allows your onshore team to focus on strategic, high-value activities that drive business growth.
The division of labour & optimizing resources is key to your firm maintaining operational efficiency as employment costs rise. Offshore support provides flexibility, enabling companies to scale their teams according to demand without the constraints of a recruitment market that’s ‘tighter than ever’.
This strategic approach to workforce management allows businesses to focus the required investment in the UK roles that are crucial for customer engagement and growth, while relying on offshore teams for functions that can be effectively managed remotely.
5. Investing in Employee Development to Maximize ROI
The increased cost of employment should also encourage businesses to invest more in employee development. An employee’s value to your organization grows with skills; fostering a culture of learning should lead to higher levels of performance and retention.
By offering development opportunities, companies can motivate employees to engage in their roles more fully, enhance their skills, and contribute meaningfully to the business.
Frontline is investing heavily in the roll out of our new training program that supplements what is provided from our partner firms.
Your Frontline staff will benefit from the same mentorship, and career growth pathways as your onshore team.
A well-trained employee is more likely to exceed expectations no matter where they are based in the world, and focusing on employee development reduces turnover rates, as employees are more likely to stay with companies that invest in their professional growth.
Conclusion: A Call for Strategic Workforce Management
As UK employment costs continue to rise, businesses must adapt by becoming more intentional in recruitment, vigilant in performance management, and proactive in employee development.
This environment should be viewed not as a barrier to growth but as an opportunity to refine workforce strategy. Integrating offshore resources, committing to rigorous hiring processes, and prioritizing the development of dedicated employees can help companies thrive despite the challenges posed by increased employment costs.
The key lies in maximizing the return on every hire—ensuring that every team member contributes meaningfully to the organization’s success. By investing in a strategic workforce management approach, companies can position themselves for long-term growth and resilience.
If you would like to discuss your approach to recruitment and overall growth, book in a call with me, and we can discuss the Frontline service and my Artificial Intelligence + Actual Intelligence approach to scaling your firm.
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