Relocating business operations back to the United States can offer strategic advantages like improved shipping times and tighter supply chain control. However, onshoring introduces significant workforce-related expenses. This post unpacks five key areas of workforce cost to consider when evaluating a move back to the U.S.
As project teams consider the options to return business activities to the US, workforce expenses are among the elements that can add significant cost. The list below touches on a few of the areas where relocation project budgets must account for workforce costs.
U.S. Wages Are Higher—But Not Always More Efficient
Employees in the US may have higher wages, whether based on salary or hourly earnings, than workers in some other regions. It’s also important to understand if the same workers—or the same number of workers—can continue to fill the need once operations return to the US. For example, it may be necessary to add employees if your plan includes new shift hours to accommodate increased production runs. You might also require new headcount if domestic regulations stipulate that you have people with specialized licenses or credentials on staff.
Benefits Obligations Can Vary Widely—and Expensively
Maintaining compliance with employment regulations will likely put additional cost burdens on the enterprise. Each region has its own rules about which benefits employers are obligated to provide, and different cultural norms may influence the perks workers typically receive. Everything from parental leave to subsidies for public transit could be part of the conversation. Even if regulations don’t require some existing benefits, your business may choose to extend them post-relocation as part of your worker retention strategy. The business might also incur costs to terminate overseas benefits contracts if they extend beyond the planned workforce transition to the US.
Relocation Support Adds Financial and Operational Drag
Moving workers and their families to the US can be an expensive part of a project. Your firm may choose to provide full reimbursement, offer partial subsidies, or leave it to employees to decide if the cost of relocating for the job is worth it to them. You might also opt to limit relocation support to those roles that would be most difficult to replace. Along with moving expenses, there may also be costs tied to lost productivity and reduced operational capacity while employees are in the process of preparing their personal items for relocation.
Training and Upskilling Are Often Non-Negotiable
Whether you plan to relocate workers to your new US operations, hire new employees from the domestic talent pool, or use a blended strategy, there may be educational components to consider. Some technical skills can be difficult to find in the US workforce and competition is tight for top candidates. Upskilling current employees may be the most time- and cost-effective way to gain those critical competencies as part of the relocation process. Other skills that already exist within your workforce might benefit from refresher training or updated education on the latest regulatory requirements or best practices.
Cultural Integration Is a Cost Center with Strategic ROI
Carefully designed workshops and educational programs can go a long way to helping relocated international employees and US-based workers learn to communicate and collaborate effectively. You may have different cultural norms and societal behaviors that will soon come together as a group. Some employees may come from regions with rigid processes around colleague interactions, for example, while others are accustomed to more fluid collaboration structures. Providing everyone with the knowledge to understand and appreciate those differences—along with the tools to unify around shared strategies and goals—helps workers maintain momentum after the move.
Onshoring: The process of relocating business operations that were previously moved overseas back to the company’s home country, in this case, the United States.
Bringing operations back to the U.S. means more than just shifting facilities—it requires a comprehensive workforce strategy that accounts for higher wages, expanded benefits, relocation packages, upskilling, and cultural alignment. Planning for these costs early can prevent downstream budget overruns and project delays.
Workforce Costs When Onshoring to the U.S.
What is the biggest workforce cost when relocating to the U.S.?
Wages are typically the most significant expense, especially when transitioning from lower-cost international labor markets.
Are U.S. benefits legally required or optional?
Some benefits like Social Security contributions and certain health coverages are mandatory, but many—such as paid parental leave or retirement plans—are competitive rather than required.
Can training costs be minimized?
Yes, by investing in internal training programs or strategic partnerships with educational institutions, companies can reduce third-party costs.
Should all employees be relocated?
Not necessarily. Many companies only relocate key personnel and hire new employees domestically to control costs.
How important is cultural training in onshoring?
Very. Cultural friction can derail collaboration and productivity, so training is essential for long-term team performance.