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How Much Does It Cost to Outsource Customer Service?

Ensuring your clients and customers have the best experience can be challenging. As the number of your customers increases, so does the difficulty handling their many needs all by yourself. Outsourcing customer service can be a huge help to your business, and the cost is often less than the amount you’d pay an extra employee. Benefits include relieving pressure on your employees, preventing poor reviews, and having the freedom to focus on other high-priority areas of your business. But what are the financial implications?

 

How Much Does Outsourcing a Contact Center Actually Cost?

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When a business employs internal contact center agents, they are typically paid by the hour, which includes both productive and unproductive time. This also means that staffing, training, and management of employees, HR, and tech upgrades are also handled in-house. When a brand outsources its contact center support, the costs for these functions are managed by the outsource provider.

Outsourcing saves you time and money, as your partners manage everyday business needs so internal teams may focus on priority deliverables. And your company only pays for productive time. The average cost to outsource customer service is $2,600 – $3,400 per agent per month. This includes potential management fees and service fees, but doesn’t include factors like call volume, additional support channels (e.g., social, chat) or languages.

 

Is It Cheaper to Outsource Customer Service Than to Keep In-House?

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In-house customer call centers are generally costly to maintain, given the need for salaries, benefits, insurance, overhead costs, technology, and training. Glassdoor estimates the average customer service representative earns $33,648 per year, plus $5,000 in benefits. With an in-house team of ten, those costs average out to the following:

  • Salaries: $336,480*
  • Benefits: $50,000
  • Manager: $49,789*
  • Staffing/Hiring: $5,000
  • Overhead (Office space, etc.): $62,500
  • IT (Software, hardware, etc.): $5,000

*Glassdoor salary estimates. Does not include telephony, training, and more.

When outsourcing customer service, these costs are all-inclusive. You don’t have to worry about payroll taxes, personnel, absences, or downtime. Most providers offer different packages to address your specific needs. This is also helpful for varying company sizes. If a small business only needs one to two representatives to handle their call volume, outsourcing is more economical than hiring and paying two full-time employees. Likewise, a larger company may lower costs and raise production levels with more outsourced agents, who resolve problems expeditiously or identify trends in customer issues.

 

What Other Factors May Affect Outsourced Call Center Pricing?

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Aside from agent rates, there are other items to consider when calculating costs. Do you need 24/7 monitoring, multilingual agents, or omnichannel support? These variables affect the monthly price of your outsourced call center, and can fluctuate based on high-volume seasons in your business.

Other variables that will affect your final price include:

  1. Unexpected Call Volume Spikes or Fluctuations

    • This may vary if managing seasonal sales spikes and downturns or launching new products or services. External factors (like delays caused by a pandemic) can play a role, and pricing may increase during surge times. You may need to adjust the number of agents on your program based on demand.
  2. Duration of Calls

    • The call center you choose to best represent your business may charge by duration of calls. Depending on the nature of your customer service calls, they can be short or long. For example, helping someone reset their password may take 1-2 minutes, vs someone with a billing or shipping question which requires a little more time and research on the representatives’ end.
  3. Levels of Support

    • Determine the type of work you’d like your call center agents to perform based on your business model. If highly skilled staffing is required, it may cost $50+ per agent per hour. Highly skilled staff requirements may include a need for multilingual agents, 24/7 service, problem solving, or persuasive speaking skills. Outsourcing partners will include additional support when calculating the costs (e.g., other necessary staff, managers, technical experts, etc.).
  4. Location Impacts

    • Onshore (United States) or offshore (Asian countries) call center teams vary in cost. Generally, offshore and nearshore (Caribbean, Latin America, Mexico) locations are less costly, but they come with their own set of limitations. Given the complexity of your needs, you’ll need to consider language barriers, managing communications, and agent skill sets. Offshore costs are typically $5 to $25 per hour.

 

The Different Call Center Pricing Models

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There are several models to choose from and choosing the right one is typically based on your needs and company size. Inbound call centers handle calls coming in from customers, often regarding order status or support with an app or website. Those models include:

  1. Shared Pricing Model
    • Agents handle calls from more than one company. Typically, companies are charged per agent per minute, ranging from $0.40 to $0.90 per minute.
  2. Dedicated Pricing Model
    • Agents handle calls for only one business. Their hourly rate is $8 to $30 per agent. Dedicated agents are best for companies who have a steady, predictable influx of calls as rates are separated from agent talk time.
  3. Monthly Flat Rate Model
    • Rates for monthly services start at $100, while some outsource partners have an additional limit on monthly talk time.

At Outbound call centers, agents make calls to customers, ranging from sales opportunities to surveys and polls. Those models include:

  1. Hourly agents are paid on an hourly basis.
  2. Commission agents are paid by commission.
  3. Hourly Plus Commission agents are paid both an hourly wage and commission based on specific standards of service levels.

 

Is Outsourcing the Answer?

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Outsourcing your customer service support may save you considerably in the long run. With a dedicated team able to handle all your customers’ needs and with the know-how to resolve issues quickly, you are free to focus on other business goals. Now’s the time to see which type of outsourcing is right for you.

Working Solutions offers an all-encompassing customer support solution for your sales and customer needs, with seamless service at every touchpoint. We deliver high-quality professionals to manage your preferred channels and also provide an all encompassing solution for your fluctuating sales and customer service needs. And we personalize care to revolve around consumers’ issues, turning customers into brand advocates and helping you sustain and grow your business. Our on-demand solutions allow you to better engage, empathize, and delight your customers, wherever and whenever they interact with your brand.

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