Reduce Staffing Cost

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expenses, optimization, outsourcing, payroll, tax

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Reduce Staffing Cost

Do you rely on expensive sales reps or area managers to handle repetitive general customer support calls? Or do you already have a large pool of customer support reps, but are looking for a more cost effective solution while preserving the same quality? Are you hiring within your geographic area from a limited pool of applicants? 

These are just some of the questions many operations managers, project managers and customer support directors have to evaluate on a regular basis. Not having the right support structure in place can derail your organization. Your highly paid and incentivized sales reps can not focus on value added tasks which they were hired for,  i.e. to convert leads and generate new business. Your local customer support reps are great, but what about the hefty fees and payroll taxes, allowances, paid and sick leaves and other costs and benefits that you have to pay. As a response to these challenges, nowadays more and more companies are employing remote workforce and accessing a worldwide pool of talent.

Ways to decrease cost of customer support

1. Hire agents from nearby smaller towns

  • An obvious way to save some money is to move your customer support operations from your downtown office to a more cost effective, but nearby location. Typically rents and salaries are lower, but employee satisfaction still can be kept constant as your employees spend less time and money commuting which contributes to better work-life balance. Overall cost savings can be 5-15%.

2. Move your customer support operations to affordable regions

  • If you are ready for a larger scale, but still local project, you can consider opening an office in a state where costs are lower. In the US typically such states and cities known for customer support are Atlanta, GA, Dallas, TX and Phoenix, AZ. Overall cost savings range from 10-20%.

3. Outsource nearshore

  • If you are looking for optimizing your customer support and looking for outsourcing locations still in the same time zone Mexico, Domincian Republic, Puerto Rico might be the right choice for you. These locations could offer good quality for a reasonable price, however key emphasis must be placed on controls, analytics and quality metrics. With the right outsourcing partner this option is favorable for many US and Canadian companies. You can save up to 45-60% of your budget.

4. Outsource offshore

  • Largest cost savings can be achieved by outsourcing customer support to offshore locations specialized in client service. The Philippines is one the best locations worldwide for high quality, reliable and well trained workforce. JPMorgan, HSBC, Wells Fargo and Citibank are just some of the largest banks which employ tens of thousands of agents there, mainly due to the work ethic and for the fact that a large number of customer support professionals in the Philippines can speak English with little or no accent. Cost saving can be anywhere from 60-80%.

Other considerations

To decide whether to manage customer support in-house or to work with a BPO company is a business decision. Outsourcing has many pros and cons to consider.

Pros of Outsourcing Customer Service

  • Cost savings. Working with a company specialized in flexible outsourcing  customer support can yield to significant cost savings due to the aforementioned factors. Further cost savings can be achieved by working with a cloud-based provider as the shrinkage (no. of agents available to take calls divided by no. of all agents) is much favorable since external shrinkage factors, such as holidays, sickness and annual leave are managed by the outsourcing provider. Another easy way to save cost is by dynamically adjusting capacities based on the volume fluctuations to avoid overstaffing, thus overpaying.
  • No HR issues. As part of the outsourcing agreement, the agency is making sure that all hiring, training, scheduling, scaling tasks are taken care of. You do not need to hire a Human Resources personnel and deal with time consuming people issues.
  • Flexibility. Traffic spikes (such as Black Friday) can put a significant strain on any business, which can lead to lost sales – or worst, angry customers. Outsourcing is a solution as BPO companies can mobilize almost real time extra human and IT resources if needed.
  • Business continuity. No need to purchase extra servers and assign IT personnel to ensure system uptime as this is also taken care of the outsourcing partner

Cons of Outsourcing Customer Service:

  • Bullet-proof processes for remote management are required. Make sure your selected contact center has SOPs, policies for data protection, quality assurance processes, agent monitoring tools and real time reporting in place. Make sure you don’t sacrifice quality for the lower price. 
  • Lack of company knowledge. Compared to your in-house staff, remote workforce might not be as engaged and know your company’s processes that well. Well structured training sessions, gamifications and remote management best practices can be a solution here.
  • Agent focus might be divided. Some BPOs offer shared solutions, whereby an agent represents multiple businesses at the same time. This can considerably decrease the scope of outsourcing in terms of complexity of tasks an agent can be trained for as well as might lead to suboptimal quality. To achieve best results, it is suggested to work with dedicated agents only.


There are many ways to save costs, but this must not be to the detriment of quality. Largest costs savings can be achieved by offshoring, which can yield 60-80% savings. Quality can be assured by working with an experienced, reliable outsourcing partner that has a large pool of agents and can provide transparency in terms of agent selection, processes, management practices and has the expertise and track record to do this on scale. This way you do not need to deal with HR issues, business continuity and pay high fixed costs, however always make sure that bulletproof processes are in place, agents are well trained and work with dedicated agents only to achieve best results. Agents Republic provides all sourcing models in a remote environment, including local, rural, nearshore and offshore solutions, that best fit your business needs. Get in touch with us!

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