In every U.S. community there are vacant houses, abandoned buildings and school buses that interesting people drive around as RVs, empty lots that once held neighborhood schools and playgrounds. Many would be encouraged to pick up everything including their American flag and move to one of the many crumbling cities while others are just abandoning ship… fleeing for employees outside of the United States. Well, who’s right? Is it un-American to hire overseas? Is it smart to hire Americans? When do you put your countries interest aside to keep your own ship sailing straight to the promise land? Lets take a look at these two hotly contested options.
The most obvious reason to hire overseas are lower wages, partially based on domestic employee wage laws and local standards of living, where the US has a median salary of $26,364. Compare this to a worldwide average of $1700 and where 2/3 of the world lives on $2 or less, granted many of them wouldn’t be too great at coding Ruby on Rails none-the-less turning a computer on. Bottom line, if you are looking to save money on employees, look overseas. The median US worker does bring home way more than most others but perhaps there are other intangible costs to add on to overseas employees.
First and foremost are healthcare costs, spiraling out of control here in the states. Sometimes the cost of surgery here can cost 100x compared to the exact same procedure in other countries. Related to workers, many countries provide “free” healthcare, paid for by others in their country, which you can leverage for your company. Here’s a list of countries that offer excellent health care to consider. Compare this to the States where for example GM gets the pleasure of tacking on $1525 to the price of every car they sell just to pay for healthcare benefits for it’s retiring employees. Add to this the healthy, active and jovial lifestyle accompanied with many Americans and it’s easy to see why considering internationally makes sense.
Relating to taxes for overseas employees, you are not responsible for taxing these overseas contractors and employees. Compare this to FICA, SUTA, FUTA, and whatever else the IRS wants to pile on, you can sometimes be paying 35+% of your revenue as tax, in a country that supposedly provides much less for their citizens. Now some would say that leveraging overseas employees as a tax loophole is un-American. Well, how about we just look at some of America’s top tech companies tax rates: Google (2.4%) , Apple (9.8%), and Microsoft (7%), some of which is attributable to overseas employees but also some is just fancy dancy “official” money laundering. Also by hiring locally you are helping fund great initiatives to spend tax dollars on things like the Gravina Island Bridge, Monkey House, and my favorite shrimp treadmills.
Now some would say that having an abundant work force to choose from is an excellent opportunity, assuming you have the cash to hire these employees. Heck, our unemployment rate is 8.1% while our underemployment number (which is for example holding a part-time job despite desiring full-time work) is 18.3%, so there are plenty of people locally looking for work. Not saying that overseas employees don’t goof off but here are a couple of extreme examples of American employees taking it to the extreme:
Add to this the 700k technical graduates from India plus millions of others elsewhere, which are the types of jobs that some say are going to drive the growth in our economy. So, with an abundance of highly educated, underemployed workers available locally, it’s hard to see why anyone would want to hire un-Americans. And if you are concerned about hiring someone not only outside of your office but outside of your country, consider using Worksnaps to ensure your offshore team is working as efficiently as possible.