The Call Center Cost Matrix: Is It Worth It To Outsource Offshore?

Outsourcing call centers have become a hugely popular business model over the years given the huge benefits in terms of cost reduction. When considering the cost matrix for comparison between in-house and offshore call centers, there are several points of interest to be taken into account.

Overhead Costs

Running a call center internally can be an expensive affair particularly when it comes to overheads. Overhead costs can run the gamut of not just infrastructure in the form of office space, telephones, IT equipment, workstations, software, and so on, but also maintenance, as well as upgrade costs. Technology invariably needs to be upgraded every few years for updates as well as improved speed and efficiency. Also, consider the need for additional paid technological support to ensure your call center operations function smoothly with little to no downtime.

Labor Costs

An in-house call center places the onus on you, the manager, to control the labor costs associated with both hiring new staff via recruitment campaigns as well as maintaining existing staffing levels. Costs for outsourced call center agents are generally significantly lower than the costs associated with hiring within western countries. On an average, for example, a Filipino call center worker can be paid around $600 to $700 per month whereas a basic support agent in the U.S can be paid around $30 per hour.

HR Costs

Labor costs take on a new dimension when you consider factors such as training and development, medicals, benefits and insurance expenses, in addition to the hiring and day to day management. Outsourced call centers generally manage the manpower expenses themselves taking a huge load off of your labor costs.

Agent Hours

Outsourced call center costs are calculated in terms of agent hours as opposed to the fixed hour format followed by in-house models. In an in-house model, you typically pay for the staff’s non-productive time during their schedule as well which includes breaks, call waiting times as well as training days. With outsourced models, on the other hand, you pay for actual production time only which factors at roughly about 85%. Bear in mind that your agent hour costs also typically include infrastructural, labor, management, HR and quality control costs, therefore reducing your overall individual expenses.

Other Cost Factors

There are many different service providers in the outsourcing market today which can make choosing the right company a difficult task. Bear in mind that whilst cost is a big consideration when picking the right partner for your company, a lot of it also boils down to the company itself. Does the company align with your core business values and offer you competitive advantages in terms of know-how, quality, and feedback? It’s important to evaluate your call center provider in terms of a long-term, beneficial, strategic partnership before signing the dotted line.

At Callnovo, for instance, we offer you cost-effective and high-quality call center solutions based on over 10 years of operations and over 20 years of Industry experience. We are the leading service provider in China offering all round call center capability at an affordable price.