Key Takeaways:
- Tariffs can create cost pressure beyond the goods directly affected
- CFOs can protect margins by reviewing controllable operating expenses
- Offshore teams can reduce role costs without automatically reducing capability
- Connext provides dedicated offshore staffing solutions through its Recruit Right, Retain Right, and Manage Right framework, helping businesses control costs, retain talent, and maintain performance.
Tariffs can affect more than the imported goods they target. For mid-market companies, tariff changes can disrupt pricing assumptions, cost forecasts, and margin plans, leaving CFOs to decide which expenses can be adjusted without weakening the business.
The most common responses are: cutting costs, revising budgets, or raising prices, each involve trade-offs. CFOs need to separate unavoidable external costs from operating costs that can be redesigned to protect margin, preserve capability, and keep growth plans on track.
What Is a Tariff?
Tariffs are taxes charged on imported goods and may be used to protect domestic industries, generate government revenue, or influence another country’s behavior. For companies that depend on imported goods or materials, tariffs can increase the cost associated with purchasing those products. Those increases may eventually affect pricing decisions, financial forecasts, or margin expectations. For CFOs, understanding where tariff exposure exists is the first step toward determining which financial levers remain within the company’s control.
Do Tariffs Apply to Services and BPO?
As stated by Connext, tariffs on goods are import taxes, while services face a different type of barrier. Instead of a duty collected at the border, service trade barriers can include licensing requirements, data localization rules, foreign ownership limits, and work permit restrictions. These barriers do not necessarily increase the price of a physical product. Instead, they can increase the cost and complexity of delivering services across borders.
For businesses that outsource, this distinction matters when evaluating tariffs and outsourcing as part of a broader operating strategy. Requirements involving data flow and cybersecurity can affect how offshore teams support customer service, back-office operations, analytics, and other functions. Cost savings from offshoring are more sustainable when the delivery model accounts for compliance and operational requirements from the beginning. CFOs should therefore evaluate not only the cost of the team but also how the provider supports the infrastructure surrounding it.
HELP US REACH MORE PEOPLE
Like what you’re reading?
Add Connext as a preferred source on Google — it only takes a moment and helps more professionals find our content.
- 1 Click Add as preferred source below
- 2 Sign in to your Google account if prompted
- 3 Check the box next to Connext Global to confirm your preference
- 4 Close the tab — you're done. Thank you!
How CFOs Can Rebalance Operating Costs
PwC’s June 2025 survey found that 71% of CFOs viewed tariff policies as a moderate or serious risk. In response to economic and policy volatility, many were already adjusting forecasts, reducing non-layoff costs, and assessing tariff exposure.
For mid-market companies, this creates a practical mandate: look beyond direct tariff exposure and review the parts of the cost structure where management has more control.
Price increases can help, but they do not eliminate the underlying pressure. According to KPMG’s 2026 Tariff Survey, 78% of organizations reported higher cost of goods sold. CFOs must decide how much of that increase can be passed to customers and how much must be absorbed through smarter operating decisions.
Where CFOs Can Take Action
Tariffs can push CFOs to separate external costs they cannot control from operating costs they can actively restructure. This is especially important for mid-market companies, where margin pressure can affect hiring, investment, pricing, and customer experience at the same time.
- Review controllable operating costs. Staffing, workflows, and delivery models often give CFOs more flexibility than tariff rates or imported-goods costs.
- Protect capability while reducing expenses. Operating cost reduction planning should not eliminate work the business still needs.
- Avoid relying only on price increases. Passing higher costs to customers may protect margins in the short term, but it can weaken competitiveness and demand.
- Restructure how work is delivered. Moving suitable functions to a more efficient operating model can help offset tariff costs while preserving needed skills and capacity.
How Offshore Staffing Can Help
When goods cost more, CFOs may need to rethink where work is done, not whether the work should exist. Offshore staffing gives companies another way to manage controllable labor costs without making headcount cuts the only option. According to Deloitte’s 2025 Tax Transformation Trends, 86% of tax and finance leaders surveyed use outsourcing for at least one tax process, while 94% see reduced operating costs as a benefit of outsourcing.
Not every outsourcing model provides the same level of control. Vendors with limited transparency can create concerns around visibility, quality, and accountability. In a co-managed team, the client continues to direct daily work, priorities, tools, processes, and performance while the staffing partner supports employment and operational infrastructure.
Offshore professionals then work as an extension of the client’s organization, with support for recruiting, employment administration, HR, IT, and local operations. This helps CFOs lower the cost of selected roles without sacrificing capability, a distinction that matters more as margin pressure rises.
Compare offshore staff rates and discover how much you can save.
Conclusion
The impact of tariffs on mid-market businesses gives CFOs another reason to examine which costs are fixed by external conditions and which can still be redesigned. Tariffs may raise the cost of goods, but the response does not have to rely only on price increases or capability cuts.
Offshore staffing can give companies another operating-cost lever by changing how selected roles are structured while maintaining business oversight. With a partner such as Connext, mid-market companies can access offshore finance talent, improve cost efficiency, and preserve the control they need to keep the business moving.
Why Partner with Connext
Connext provides offshore staffing solutions across industries, including finance and accounting. Its offshore professionals can support finance-related work such as taxes, billing, tariff concerns, and invoices, while Connext handles employee-of-record services, including payroll, administration, and HR.
Unlike a traditional BPO model that focuses mainly on filling roles, Connext uses a structured framework built around recruiting, retaining, and managing the right offshore team.
Recruit right. Connext first clarifies the roles, skills, and team fit the client needs, then sources candidates for the client to review and select.
Retain right. Connext supports employee engagement through comfortable workstations, workplace amenities, events, and celebrations designed to help people stay and perform.
Manage right. Operations directors and managers work with clients to support day-to-day performance and team execution.
Through this framework, Connext helps clients reduce staffing costs while recruiting the right team, supporting retention, and maintaining operational visibility. Its co-management model gives clients control over their business while a trusted offshore manager supports daily operations.
Frequently Asked Questions
Start with roles that have clear responsibilities, repeatable workflows, and measurable outcomes, and that can be done well from another location. Begin with suitable positions rather than moving whole departments, so you can test the model before expanding.
Not necessarily. A smaller team lets you validate workflows, communication, and performance expectations before adding roles.
Define success measures before launch, such as productivity, quality, turnaround times, and service levels, and compare the financial results against expectations. Clear measurement shows whether expansion is justified.
Finance should work with the leaders who understand the roles, which may include operations, HR, IT, security, or department heads. Involving them early uncovers requirements a cost comparison can miss and establishes clear ownership.
Review how team changes are handled, what happens when staffing needs rise or fall, and which responsibilities belong to each party. The agreement should support your operating needs, not constrain them.
Managers should set clear expectations, communication, feedback, and integration plans, and define how work is assigned, performance is reviewed, and issues are escalated. Documenting existing processes beforehand keeps the working relationship consistent from the start.
Related Reads
Understanding Tariffs on Services: The Next Frontier in Global Trade Policy
What Benefits Does Connext Deliver for Operational Excellence?
