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How to Calculate Call Center Outsourcing Costs

Amy Bennet | Oct 2, 2013 18,020 views 6 Comments

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So you’ve been handed responsibility for investigating the benefits of potentially outsourcing your company’s customer service for the first time. How do you start to compare your in-house apples to those outsourced oranges? What math should go into the business case around call center outsourcing costs? (And if math isn’t your strong suit, skip this read and contact us today for a cost analysis of your center!)

Let’s break it down to the basics.

1. Understanding an “agent hour.”

In-house, you are paying for 100% of an agent hour. In an outsourced model, typically, you are paying only for productive agent time.

You aren’t paying for an agent to be waiting for a call. You aren’t paying for coffee breaks or even coaching time. Generally speaking, you could expect a call center agent to be productive for 85% of an hour.

Let’s take a real life example. A Level One Tech Support Agent working in Dallas, Texas will cost his employer about $30USD per hour, loaded. As his employer, you pay 100% of that hour. With an outsourced call center model, using a productivity projection of 85%, that same agent will cost you $25.50 per hour. A savings of 15% right off the top. Before we even get to the good stuff.

2. Realizing a reduction in FTE.

Successful contact center outsourcers have deep expertise in forecasting, staffing, and managing for maximum efficiency. In addition, a great contact center partner will:

  • Offer leading-edge call center technology for efficient call distribution,
  • Manage time-shiftable tasks for maximum efficiency,
  • Cross-train to maximize efficient staffing for peaks and valleys,
  • Utilize shared pool options for lower volume hours of operations.


And the over-all result will be a reduction in FTE with no loss of service or quality. When calculating call center outsourcing costs for your business case, it is generally safe to assume, you will realize at least a 5% reduction in FTE.

3. Understanding “All-In.”

The per agent hour rate your contact partner charges typically includes associated management costs. In a Blue Ocean solution, for example, your coaches and project management costs are included in that agent hour or per minute rate.

On-going technology costs are also generally included. In fact, we often see companies choosing to outsource when the need arises to invest in a new or existing technology platform. Essentially, this represents risk mitigation. In a call center outsourcing model, your partner is shouldering the risks of managing both human and technology resources.

This table gives a quick snapshot of how to calculate costs when considering an outsourced customer service solution.

Basic Comparison Chart for Calculating Call Center Outsourcing Costs

In-House Call Center

Outsourced Call Center

Productive Agent Time

100%

100%

Non-Productive Agent Time:

  • Breaks
  • Coaching
  • Wait time

100%

0%

Supervisor/Manager for Customer Service Agents

100%

Included in agent hourly rate

Quality Assurance

100%

Included in agent hourly rate

Infrastructure:

  • Workstations/IT support
  • Telephony
  • Facilities

100%

Included in agent hourly rate

HR Support including:

  • Recruiting
  • Payroll
  • Benefits Management

100%

Included in agent hourly rate


Using the basic calculation of call center outsourcing costs, you will have the foundation for a more rigid business case, but that’s just the starting point in how to choose the best outsourced contact center for your business.

Still looking for some guidance on the math? We’re here to help – start calculating your call center outsourcing costs today.

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Republished with author's permission from original post.


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6 Responses to How to Calculate Call Center Outsourcing Costs

  1. Christian Morales May 26, 2014 at 12:48 am (2 comments) #

    This is a very helpful guide. But we reckon that an effective way of looking at whether or not a call center is cost effective for your business is to weigh whether it fits within your needs. If you don’t require that many agents and the cost would just be an added expense, then maybe you should put it of for a little longer, until such time that the need arises.

  2. Outsource2india February 2, 2015 at 10:20 pm (1 comment) #

    Now, calculate the resources and budget required for your call center project with Outsource2india’s new call center calculator.

    To find out the required number of call center agents and the total cost incurred per week, all you have to do is enter in the type of your project, the service type, the target country, the call count, the average handling type and your shift coverage preferences. Once you enter in your details, you will just need to click on the “Calculate” button to find out the answer immediately. – See more at: http://www.outsource2india.com/callcenter-staffing-calculator.asp#top

  3. Mike Wilsonn February 4, 2016 at 1:58 am (1 comment) #

    Hey Amy, Nicely explained article, The Basic Comparison Chart for Calculating Call Center Outsourcing Costs is really helpful. Also, it’s quite evident with the chart itself that outsourcing customer services has edge over having an in-house call- center .

  4. George March 3, 2016 at 7:39 am (1 comment) #

    This is why the typical call center operator doesn’t know a basic thing about the area that they are meant to be giving support on as also they don’t know a thing about basic politeness and courtesy.

    It’s not clear why you include training in the in-house operator costs and not in the outsourced costs. At least with in-house operators your staff are better placed to know the procedures and be in contact with the back-office staff.

    I am not against outsourcing to cut costs but we must be realistic if we want to obtain an acceptable level of quality which is not what I am seeing here.

  5. Robert December 23, 2016 at 3:32 am (1 comment) #

    This is very informative post and is really helpful for those who are new to hiring such services. But in my view a company should be transparent with their costing. This is both professional and ethical. Clients should know what work is being done and what will be the cost for such work before they even hire the services. The call centre will not be cost effective, if they do not fit for your needs.

  6. Mary Parsons June 19, 2017 at 1:56 pm (1 comment) #

    This is a very good article that shows why outsourcing can be really beneficial to companies especially in the global marketplace. The level of talent around the world is increasing so the drop in quality is not what it used to be in outsourcing. You may be even able to find better quality workers for half the hourly price and that’s not even including other overhead. With more and more jobs becoming remote anyways why not give outsourced workers a try.

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