Your offshore cost per seat has gone up every year since the center opened, and the business case that funded it never had a line for that.

The center was a good decision. You ran the numbers, picked a credible city, hired well, and the savings showed up on schedule. Somewhere around year three the finance team started asking a quieter question: why does a seat cost noticeably more than it did at go-live, and what happens to the case if that keeps going? After four years of 5 percent raises, the wage cost of a seat is about 22 percent higher than it was on day one. You had answers. Wage inflation, local competition for talent, currency. All true. None of them the actual cause.

Here is the pattern I have watched play out in every offshore geography I have worked in. A city becomes the answer because its talent is good and its cost is low. Your company moves in. So does everyone else who did the same math. Within a few years the city is full of your competitors, hiring the people you trained and paying a little more to get them. The talent pool you helped create is now the labor market you are bidding in.

A former global head of GBS at a major carrier said it to me plainly not long ago: a location that worked will burn itself out, not because it was wrong, but because it was right. Offshoring succeeds, and its success is its own inflation.

Nobody’s cost base doubles in a year. It compounds. WTW’s July 2026 Salary Budget Planning Report puts salary increases in the Philippines at 5 percent this year and 5.1 percent next year, and the 2025 edition of the same report had India at 9 percent. Those are budget medians, not headlines. Hold 5 percent for ten years and the wage cost of every seat is about 63 percent higher than the day you opened. Hold 9 percent and it more than doubles. That is arithmetic on WTW’s rates, not a forecast, and it is the arithmetic most business cases skip when they assume the cost line stays flat.

The dollar side of the ledger does not rescue you either. Your customers price in dollars. Your offshore cost rises in a currency and a labor market you do not control, in a city that everyone else in the industry discovered at the same time you did.

The standard response is to move. Manila becomes Cebu or Davao. A tier-one city becomes a tier-two city. The shortlist becomes whatever the next site selection deck says. Each move is defensible. Each move also resets the same clock: a new pool to build, a new competitor set to attract, a new cost curve that starts low and then does the only thing cost curves do in a successful location.

I built a nearshore center in Bogota a decade ago. When we started, the pool of people with real freight forwarding experience was thin, so we built it: hired who we could, organized the work so people moved up through it, and grew the bench we would need in year three. It worked. Then every forwarder in the hemisphere noticed and moved in, and the pool we had built became the market we were competing in. Bogota is a deep, mature talent market today, and it is still the right answer for some work. It is no longer the right answer for all of it. That is the point. Moving is not a strategy. It is a delay with severance attached.

Here is the assertion, and you are free to argue with it: the cost line keeps rising because the decision was made at the wrong level. You chose a country for the operation. The operation is not one thing. It is a portfolio of work, and each piece of it has a different answer.

Back office and mid office work, the entries, the documentation, the settlement, the exceptions, does not care much where it lives, so long as it is owned and governed. That work can follow the cost curve, and should. Front office work, the customer-facing conversations that carry your relationships, cares a great deal, and your customers will tell you so. Regulated work, customs brokerage being the obvious example, may need to sit in one country whether you like the wage rate or not. I have seen operators centralize their entire customs operation onshore for exactly that reason, and it was the right call.

Decide task by task and something changes. Onshore stops being the thing you left and becomes one more legitimate answer. Nearshore stops being a destination and becomes a fit for specific work. The offshore center you already run stops being the whole strategy and becomes one node in it. Your cost base stops riding a single wage curve in a single city.

There is a name for deciding at that level, and it is not offshoring or nearshoring, both of which answer where and stop there. It is bestshoring: where the work lives, who does it, and how it is organized, decided in that order. The Six Dimensions of Bestshoring Readiness™ is the framework for asking whether your operation is built to make that decision, and Talent is only one of the six.

Picture the same finance conversation two years from now. The question is no longer why the seat cost went up. It is which work sits where, why, and what the cost curve looks like for each. You hold a portfolio, not a bet. When one city’s curve steepens, you move the work that is sensitive to it and leave the work that is not. Cost per seat becomes a number you manage instead of a number you explain. The center you built is still there, doing the work it is best at. The next site selection deck gets shorter, because it only has to answer for the work that is genuinely sensitive to cost. And the business case finally has the line it was always missing.

1. For the center you run today, can you say which work sits there because it should, and which sits there because that is where the center happened to be?
2. When the cost per seat rises again next year, is your first move a new city or a task-level review?
3. If your closest competitor opened next door to your center tomorrow, which of your people would they hire first, and what does that tell you about where that work belongs?

Sources and notes. Salary figures: WTW Salary Budget Planning Report, Asia Pacific, July 2026 edition as reported by The Philippine Star, and the July 2025 WTW release for India. The 22 percent, 63 percent, and more-than-double figures are arithmetic on those published rates, not forecasts, and they apply to wage cost, the largest line in a seat; facilities and technology move on their own curves. The Bogota build and the customs example are TJRMGI practitioner experience. The carrier GBS remark is from a private conversation and is unattributed by design.

About the Author

Johnnie Moore is the Founder and CEO of The JR Moore Group. He spent 38 years in logistics and supply chain, 28 of them at DHL Global Forwarding, where he scaled the shared services for the Americas to 1,300 FTEs and developed global frameworks adopted across a network of nearly 6,000 employees worldwide. He defined Bestshoring as a strategic discipline and advises freight forwarders, 3PLs, 4PLs, and supply chain and logistics operators on where work should live, who should do it, and how it is organized.