Offshore hiring for small business: is it worth it under 20 staff?

Yes, for most businesses under 20 staff, above one clear threshold: an offshore hire through Pear Tree costs AUD$1,800 per month all in, and pays for itself once it frees up roughly four hours a week of owner or fee-earner time. Below about 15 hours a week of genuinely delegable work, it is not worth it yet. 78% of Australian companies using offshore staff are SMEs (AU-05), and businesses with five to ten employees are now making their first hire (MKT-06).

Is offshore hiring worth it for a business under 20 staff?

For most, yes, and the maths is not close. The question is not really whether a small business can afford an offshore hire, it is whether there is enough delegable work to fill the role properly. That is the actual constraint, and it is worth being honest about it before anything else.

This is not a niche play any more. Australia has 2.4 million businesses with fewer than 20 employees (ABS Business Counts 2025, AU-12) and New Zealand has more than 530,000 (MBIE Small Business Report 2025, NZ-08), and SME offshore adoption across ANZ is up 45% in three years (Employment Hero and SEEK 2024-25, MKT-05). 78% of Australian companies using offshore staff are SMEs rather than large corporates (AU-05).

The reason small businesses adopt faster than large ones is simple. In a 12-person business the owner is still doing admin at 9pm, and one good hire changes the week. In a 500-person business it is a procurement exercise.

What does it actually cost a small business?

An offshore admin hire costs AUD$1,800 per month all in through Pear Tree, being AUD$1,400 in salary plus the flat AUD$400 per month management fee, or AUD$21,600 a year. There is a one-time placement fee for the search and vetting on top, and no superannuation, no KiwiSaver, no payroll tax, and no desk.

The local comparison is the part small business owners tend to under-count. A $60,000 admin salary in Australia is not $60,000: add 12% superannuation, now legislated at its final rate since 1 July 2025, and a recruitment fee of 15 to 25% of first-year salary (AU-16), and year one lands between $76,200 and $82,200. In New Zealand a NZ$51,500 salary plus KiwiSaver at the new 3.5% employer default from 1 April 2026 plus a 15% recruitment fee comes to roughly

One genuine advantage of being under 20 staff: most businesses that size sit below the state payroll tax thresholds, so payroll tax does not feature in either column. What does feature is the cost of getting it wrong, and a bad local hire runs $50,000 to $150,000 to unwind (SEEK and Hays 2024, AU-10). Pear Tree includes a six-month replacement guarantee (PT-04).

How many hours does it need to free up to pay for itself?

About four hours a week of owner time, if your time is worth $100 an hour. That is the whole business case in one number, and it is worth doing the sum on your own rate rather than taking a provider's word for it.

The arithmetic: AUD$1,800 a month is AUD$21,600 a year, or AUD$415 a week. Divide that by what an hour of your time is actually worth, in billings, in sales you are not making, or in the market rate for what you do, and you get the hours the hire has to give back before it is free.

Put the same figure another way. Over a 38-hour week, AUD$1,800 a month works out at about AUD$10.93 an hour for a full-time professional. That is the number to hold in your head when you are deciding whether the work is worth delegating.

When is it not worth it?

Offshore hiring is not worth it when you cannot fill the role, cannot supervise it, or cannot define it. Those three failure modes account for most of the disappointing first hires, and none of them is about the offshore part.

If you have fewer than about 15 hours a week of genuinely delegable work, a part-time local contractor or better systems will serve you better than a full-time hire you cannot keep busy. If nobody in the business has half an hour a week to run a check-in, the hire will drift regardless of how good they are. And if the role is a vague pile of leftovers rather than a defined set of outcomes, you will not be able to brief it, test for it, or measure it.

There are also roles that genuinely need to be in the room: anything requiring a physical presence, a licence to practise locally, or constant unscheduled face-to-face contact. Being straight about this matters more than winning the argument, because a hire made for the wrong reason churns within six months and costs more than not hiring.

Can a small business manage an offshore hire without an HR function?

Yes, and most Pear Tree clients under 20 staff have no HR function at all. What the role needs is a named manager with about an hour a week, not a department: a standing weekly one-to-one, a written 30-60-90 day plan, and clear expectations of what good looks like.

Structured onboarding is what makes the difference, and it is cheap. Effective remote onboarding lifts retention by 82% and productivity by 70% (BambooHR 2024, RET-03), which for a small business mostly means having logins ready on day one and someone who answers questions in the first fortnight.

The compliance side does not need an HR function either. An Employer of Record or Contractor of Record engages the person compliantly in their home country and carries the local tax, payroll, and classification obligations, from $400 per month per person (COM-04).

What does a small business need to get right before day one?

Three things: a defined role, a named manager, and secure access. None takes long, and skipping any of them is the most common reason a first hire underperforms.

Write down the ten to fifteen tasks the person will own, the tools they need, and what good looks like at 90 days. Pick who they report to and put a weekly half hour in the calendar. Then set up access properly: every Pear Tree placement is onboarded within one to two weeks with VPN, two-factor authentication, and compliant cloud workflows (PT-08), so your data stays in your systems.

Sourcing is where a small business is most exposed, because you do not have a recruiter and you cannot afford a miss. Pear Tree screens 200 to 400 applicants per role to shortlist three to five (PT-05), which is the part a 12-person business cannot realistically do itself.

What happens after the first hire?

Most small businesses that make one offshore hire make a second within a year, and the second is easier. The first hire teaches you how to brief, delegate, and check work at distance, and that skill transfers.

Time zones help here more than people expect for the first hire. The Philippines sits at UTC+8, zero to three hours from Australian eastern time (PH-07), so your team member is online during your working day rather than sending updates overnight. Well-managed offshore teams reach 90 to 95% of onshore productivity (McKinsey and Deloitte 2024, RET-05).

The pattern across 750-plus Australian and New Zealand companies (PT-02) is consistent: start with one clearly defined role, run it for three to six months, then add the second once the rhythm is there. Pear Tree holds a 90% retention rate against a roughly 60% industry average (PT-01), which matters more in a small business than a large one, because in a team of 12 one departure is 8% of the company.

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The bottom line

For a business under 20 staff, an offshore hire at AUD$1,800 a month pays for itself once it frees about four hours a week of owner time, against a local equivalent costing $76,200 to $82,200 in year one. The threshold that matters is not headcount or revenue, it is whether you have 15-plus hours a week of definable work and someone with an hour a week to manage it. If you do, the answer is yes. If you do not, fix that first.

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AUTHOR BIO: Nick is Co-Founder of Pear Tree, a direct offshore talent placement company helping Australian and New Zealand businesses hire world-class Filipino and South African professionals without the agency markup. With offices in Sydney, Auckland, Cebu, Manila, Cape Town and Hawke's Bay, Pear Tree has placed talent with 750+ companies and maintains a 90% retention rate.

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