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Reduce Agent Costs by Outsourcing Call Center Services

reduce agent costs by outsourcing call center services
Reduce Agent Costs by Outsourcing Call Center Services

Reduce Agent Costs by Outsourcing Call Center Services

A common misconception about establishing a call center is that technology accounts for the majority of operational expenses. However, several cost analyses reveal that approximately 75% of the expenses in a contact center stem from staffing costs. You may be wondering why such a significant portion is spent on personnel. In this blog, we will explore this issue and explain how outsourcing can help you reduce unnecessary expenditures while maintaining efficient operations.


Direct and Indirect Hiring Costs

The costs associated with hiring a call center agent can be classified as direct and indirect. Direct costs for recruiting, hiring, and training a new agent amount to around $10,000 per agent. This includes the full salary for every minute they spend in the office, encompassing breaks, discussions, coaching sessions, and celebrations. Since every minute impacts your bottom line, the actual productivity gained from each agent is typically lower than the amount you invest.


Indirect costs arise from agent turnover, which can be significant. These include lost productivity during training, the need for re-work to address performance gaps of new agents, and decreased efficiency before an agent leaves. The indirect costs of turnover can range from $15,000 to $20,000 per instance, which increases the average annual salary of a new call center agent to around $30,000 in the U.S. Considering that a full agent pool typically turns over within three years, these costs can accumulate quickly, causing a substantial financial burden.


How Outsourcing Can Help

Outsourcing offers a powerful way to reduce contact center expenses. By outsourcing, you only pay for the productive time of agents. For instance, if the productivity rate for your project is 80%, you are billed only for 80% of the total work hours rather than paying for 100% of the time. This results in significant savings. To illustrate, a Dallas-based tech support agent might cost $40 per hour to hire. However, if you outsource, you would pay only 80% of that rate—just $32 per hour—for the same agent.


Outsourcing hinges on the concept of opportunity cost—the cost of foregoing a more efficient alternative. By paying $40 per hour for work that could be done for $32, you are losing $8 per hour by not considering outsourcing. When you factor this loss across all employees for an entire year, the potential financial impact is substantial.


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