Call Center Management Featured Article
To Outsource the Contact Center or Not to Outsource
If you’re starting a new customer support program, or rethinking the one you’ve already got, you may be wondering if it makes sense to keep operations in-house or outsource. After a little delving into the topic, you realize your decision will be based on costs, and comparing in-house agents to outsourced call center services is a bit like comparing apples to alligators…it’s not easy to make a side-by-side comparison of costs and benefits. While painting the full picture with details could fill a book, some of the things you need to keep in mind when making this determination include:
Labor
While it would be nice to imagine your employees work every hour they’re on the clock, this isn’t the case. In-house employees take breaks and lunches, call out sick, arrive late and leave early. On average, employees work about 75 percent of the time you’re paying them to work. With outsourced call center services, someone else is paying the agents, and you’re paying for only time spent working, leaving someone else to absorb that 25 percent of non-productive time.
Taxes
In-house workers, of course, mean paying employee taxes. For your own employee, you’ll pay half of their Social Security taxes (12.9 percent of worker wages), half of Medicare taxes (2.9 percent), and all of the employees’ federal and state unemployment taxes. Once again, with outsourced agents, someone else will be paying these taxes.
Facilities
Unless your in-house workforce is working from their homes (which is a way that many companies keep customer support costs affordable), you’re likely paying for a facility and the utilities and other services to support it. If you’re in a high cost of living area, these facilities costs are probably eating into your profits significantly. Additionally, if your contact center isn’t fully staff, you’re likely wasting a lot of space. Outsourced call centers are often located in low-cost areas and run for maximum occupancy.
Operations
This includes computer systems and hardware, software, IT and redundancy, which can lead to significant cost overruns very quickly as you take on new applications. When you outsource, you’re turning these costs over to the outsourcer.
Quality
So you’re ready to outsource now…right? Not so fast. While the cost savings may be significant, the law of diminishing returns applies here. Sending call center operations out to foreign locations may seem tempting from a cash savings point of view, but quality could suffer. Many people don’t like dealing with agents who have heavy foreign accents, or the perception that companies are sacrificing U.S. jobs for money.
The alternative is to outsource to a cheaper part of the U.S., or an outsourcer who employs home-based agents. This way, you can take advantage of cost savings without worrying that your customers will begin disappearing. Even if you keep your outsourced agents within national borders, it’s a given you’ll lose some control over call center operations. As a call center manager, it’s your job to decide how much you’re willing to give to save money.
Edited by Maurice Nagle