Five Reasons Companies Outsource Contact Centers
by King White, on Nov 10, 2023 8:00:00 AM
The ever-changing business environment continually prompts companies to reassess their operational strategies, and contact centers are no exception. Many factors impact these decisions, including recessions, scalability limitations and labor market challenges. The trend of outsourcing contact center operations, in whole or part, remains strong, driven by multiple compelling reasons. Here is an exploration of the five more important ones:
1. Access to Global Talent
- Diverse Skill Set: Labor conditions for contact center talent have become challenging in many world regions due to low unemployment and market saturation. Tapping into strategic onshore, nearshore and offshore talent pools provides companies access to a broader range of skills, languages and cultural understandings crucial for serving international customers. Business process outsourcers can often be nimble and enter less traditional geographies to help tap into alternative labor markets.
- Training Capabilities: The contact center industry typically has high employee attrition rates. Business process outsourcing providers often have rigorous training programs to help train agents more efficiently and effectively. They are up-to-date with industry best practices, product knowledge and customer service excellence.
2. Labor Arbitrage
- Labor Cost Reduction: Labor costs vary worldwide. Places like the U.S. and Australia have become very expensive, with billable outsourcing rates of $30 to $50+ per hour. By outsourcing to less costly nearshore and offshore regions where the labor market is more cost-effective, companies can achieve a 30% to 70% cost reduction.
- Flexibility and Scalability: Companies need flexibility to increase and decrease headcount for seasonal work, as well as the ability to scale quickly when in a hyper-growth mode. Business process outsourcers can provide the flexibility to scale up or down based on demand without incurring prohibitive costs.
3. Headcount Reduction
- Cost Efficiency: Employing a large in-house team for customer support is a significant financial undertaking. Between salaries, benefits and overhead costs, the expenses add up. Outsourcing eliminates these burdens by shifting the responsibility to third-party vendors, resulting in substantial cost savings.
- Operational Simplicity: Managing an in-house contact center requires layers of oversight, from hiring and training to HR functions. By outsourcing, companies can streamline operations and focus on their core business.
4. Business Continuity
- Risk Management: Any number of disruptions, from technical outages to natural disasters, can hamper the functionality of an in-house contact center. Outsourcing, especially to providers with multiple locations, ensures business operations continue unhindered during unforeseen events.
- 24/7 Availability: With providers spread across different time zones, companies can ensure round-the-clock service, catering to global customer bases without interruption.
- Staying Ahead of the Curve: Business process outsourcing providers specialize in contact center operations, so they invest heavily in the latest technology. Partnering with these entities allows businesses to benefit from cutting-edge tools, such as the latest AI platforms, without direct investment.
- Integration and Adaptability: Outsourced contact centers often come equipped with systems that seamlessly integrate with existing CRM and other platforms, ensuring smooth operations and data flow.
Outsourcing contact centers is not just a cost-saving strategy; it’s a holistic approach to enhancing customer service, ensuring operational continuity and harnessing global expertise. It is all about balance, so finding the optimal mix of in-house versus outsourced contact center functions is critical to finding the right solution for your company. If you need help evaluating business process outsourcing vendors or opening an in-house contact center, our team of experts can help you consider all the options.