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A misplaced notion about setting up a call center is that technology eats up the largest portion of the total cost of operation.  Many threadbare cost analysis have shown that about 75% of the costs of a contact center are for the contact center staff. Why such a staggering amount, you must be wondering. In this blog we will talk about this, and how outsourcing helps you save on the needless extra that you end up spending to keep things on a roll.

Direct and Indirect Costs of Hiring

The cost of hiring a call center agent can be two fold – direct and indirect. The direct cost to hire and train a new call center agent is about $10, 000 per agent. This investment includes paying for every minute of the time they’re there which starts ticking the moment they enter the office and includes breaks, discussions, coaching activities, celebrations etc. As each minute affects your bottom line the net productivity you get out of an agent is always less than what you invest

The indirect costs involved in hiring is associated with agent turnover. It usually costs the company in terms of lost productivity during the training period; increased re-work to meet performance gaps of new agents; less productivity prior to leaving etc. The indirect cost can add up $15,000 – $20,000 per turnover. This jacks up the average annual salary for a new call center agent to about $30,000 in the US. Given that it takes three years for an entire contact center agent pool to turn over, the overall costs can cause a contact center to bleed through the nose.

How Outsourcing Helps

This is where outsourcing can bring about a huge difference to contact center expenses. When you outsource you only pay for productive agent time. Typically, if the productivity rate for your project is 80%, you pay only 80% and not 100% of the work hour. And that represents significant savings. Here’s a real life example. A Dallas-based tech support agent will cost his employer about $40USD per hour and as his employer, you need to pay the entire amount. But with an outsourced call center model, you only pay 80%, which will cost you $32 per hour for the same agent.

Outsourcing works on the concept of opportunity cost i.e. cost of losing a potential benefit from another workable alternative. If you spend $40 per hour for a work that should ideally cost you $ 32 per hour, you’re costing your business $8 per hour simply by overlooking outsourcing. When you add this figure up for all your employees for a year, you know how big you stand to lose.