Doing More With Less: Cost Savings and Increased Efficiency Through Outsourcing

A BPO company in Phoenix with overseas operations can streamline your back-office processes, regardless of your business type. 

When you are constantly engaged with the core business and have little time for other duties, outsourcing functions to a BPO provider is advantageous. This method can enhance your efficiency while decreasing expenses. 

This article explains why your Phoenix company should consider working with a third party instead of doing everything in-house. It discusses how cost savings and efficiency can be achieved through outsourcing. 

Read until the end for valuable tips on outsourcing for better returns on investment (ROI).

The Importance of Cost Savings for Phoenix Businesses

Arizona and its cities, particularly Phoenix, have grown in popularity among many Americans and businesses, resulting in remarkable economic growth and a steady population increase. The essential factors that draw them to the Valley of the Sun are economic diversity, a competent workforce, and an enjoyable quality of life.

According to the Alliance Bank of Arizona, Phoenix remains vital for the state’s economic growth. In 2022, employment in Phoenix rose by 73,700 jobs or roughly 3.3%, surpassing the overall U.S. figure (3.2%). The city’s unemployment rate remains below pre-pandemic levels at 3.2%.

What do these trends mean? As Arizona’s economy grows faster than expected, the quality and availability of the local workforce decreases. This trend may potentially lead to a labor shortage. With more businesses relocating to the major cities to capitalize on the opportunities, talent competition intensifies. 

The result? Phoenix companies, especially small and medium-sized businesses (SMBs), must raise salaries to attract the required talent. They must also adjust their recruitment practices to better train, upskill, and retain employees and avoid losing them to competitors in the foreseeable future. 

While favorable for the majority, economic and business growth typically translates to short to medium-term labor shortages. Such an outcome leads to higher salary, compensation, and recruitment costs for organizations. These impact SMBs the most. 

Outsourcing can help Phoenix companies fill talent gaps while reducing costs. How? Keep reading to find out. 

The Cost-Saving Benefits of Offshore or Nearshore Outsourcing

A substantial number of businesses in Arizona belong to the micro-enterprise, or SMB, category. They considerably contribute to the state’s gross domestic product (GDP). Almost 592,500 businesses in Arizona are SMBs. Phoenix is its largest city, with a population of over 1.5 million.

So, what is business process outsourcing’s (BPO) role in your Phoenix business? If you are a startup or an SMB, you likely have limited financial, human, and technological resources. Partnering with a service provider greatly benefits you.

BPO companies employ competent bookkeepers, accountants, data entry specialists, customer service agents, healthcare administrative assistants, and other back-end professionals to support your daily tasks. They can provide back-office outsourcing services via two approaches:

• Offshoring. The tasks you assigned to the third-party provider are managed and processed outside the Americas (e.g., Asia or Eastern Europe), far from your Phoenix office. Your online retail business, for example, can outsource customer support technology to a contact center as a service (CCaaS) provider in the Philippines.
• Nearshoring. The outsourced tasks are performed in a country close to your Phoenix headquarters. For instance, you transfer your medical administrative duties to a BPO provider in Mexico or Costa Rica.

Consider outsourcing’s advantages in terms of cost savings and efficiency.

Lower Operating Costs for a Better Bottom Line 

Decreased ongoing expenses largely contribute to the cost savings you can achieve through outsourcing. Running internal back-end operations can be time-consuming and costly. 

Check the different cost savings possible through outsourcing:

• Office area, equipment, and supplies. Forming and managing an internal back-office team requires investment in new hardware, software systems, and other equipment (which you must maintain and upgrade). You must also expand your physical space to accommodate more employees and facilities. 
• Recruiting. Using BPO services lessens salary costs. The BPO partner also covers the lengthy and expensive recruitment processes, including vacancy postings, candidate vetting and testing, and new hire onboarding and training.
• Monetary and non-financial expenses. Regardless of the company circumstances, permanent in-house personnel receive salaries, overtime, and other financial incentives. Non-monetary perks, including sick or vacation time, are legally mandated. 
• Skills enhancement. Minimal to zero re-training expenses are another way to save costs through outsourcing. Your BPO partner shoulders upskilling and similar development programs. The service provider improves the competencies of their professionals to address unfamiliar issues and challenges. 

Scalable Procedures for Cost Optimization

Scalability enables the BPO provider to quickly adjust the size of the third-party team or the number of processes needed without disturbing present operations. It helps your business achieve significant cost savings and growth through outsourcing. 

Below are the ways scalability encourages expansion and prevents wasted resources:

• Cost-effectiveness. To reduce operating expenses, your company can engage the appropriate number of third-party specialists. You can lower staff size when sales are slow and raise it when transactions pick up. The service provider can also assist you in determining the scope of present operations required to maximize your available funds.
• Continuity. The third-party provider helps you brace for crises by reducing their effect on your operations, particularly in customer service activities.
• Responsiveness. Outsourced processes allow your business to react swiftly to changing customer, client, or organizational demands and conditions. Offshore or nearshore providers offer adjustable services, increasing your business’ flexibility and competitiveness. 

Affordable, Reliable Remote Workers to Maximize Budget

Offshore vendors from the Philippines and nearshore companies from Mexico can provide skilled, efficient, and inexpensive work-from-home (WFH) professionals, allowing you to gain cost savings. These outsourced workers have the formal education, character attributes, and technical abilities to efficiently deliver services. 

The table below demonstrates the substantial cost savings of offshore or nearshore outsourcing. It shows the average monthly salary figures (in U.S. dollars) of third-party medical assistants, information security analysts, and customer service representatives in the Philippines, Mexico, and Phoenix, Arizona. 

Salary Explorer and Glassdoor furnished statistics data for the Philippines and Mexico; Indeed provided data for Phoenix, Arizona (U.S.).  

Note: Salary amounts from Salary Explorer are in domestic currencies and were changed from Philippine pesos (PHP) and Mexican pesos (MXN) to U.S. dollars ($) for comparison. 

Let us compare the Philippine salary with Phoenix’s. Based on the preceding figures, hiring a third-party medical assistant from the Philippines for your Phoenix-based medical practice can save you about $2,854.83 ($3,272 less $417.17) monthly.

The figures and computations above are estimates. Contact a BPO company to know the exact cost savings possible through outsourcing. 

Abundant Trained Workforce to Provide Excellent Services 

Numerous Filipinos and Mexicans over 15 are eager to work. In particular, the labor force participation rate in the Philippines is 61.1%, and Mexico’s is 59.77% (check the following table). This suggests that six out of ten working-age Filipinos and Mexicans are ready to find a job. Each country produces thousands of well-trained, dedicated, and driven graduates.

Trading Economics supplied the statistics.

Your business can benefit from a large pool of available outsourced labor. A plentiful workforce means low wages, enabling you to achieve cost savings through outsourcing. Salaries stay relatively consistent when the market has sufficient workers. Conversely, labor shortages increase pay and service rates, raising operating costs. 

Adept in Customer Service Best Practices for Excellent Experience 

The service provider’s practical application of proven techniques leads to exceptional customer satisfaction and improved performance of the third-party team.

Below are examples of best practices that can help you achieve cost savings when outsourcing:

• Interact with patients or clients via their preferred channels. Third-party professionals effectively communicate with individuals of every generation. They understand that baby boomers and Generation X are more familiar with phones and email services. They also adapt to millennials and Gen Z, who are more comfortable with social media. 
• Leverage feedback. Third-party agents gather customer opinions, comments, and recommendations for your organization. They evaluate the information collected to better understand the consumers’ needs and provide enhanced service.
• Deliver individualized patient care. BPO workers are instructed, trained, and advised to offer service via human touch or connection, helping strengthen customer relationships.

Upbeat Remote Workers for High Performance and Productivity 

The third-party professionals’ positive work attributes can increase process efficiency, helping you gain cost savings through outsourcing.

The following are some healthy work traits:

• Optimistic. Offshore professionals, particularly Filipinos, are naturally lively despite challenging circumstances. A positive mindset contributes to better cooperation, efficiency, and customer relationships.
• Courteous. Third-party professionals show respect for officers and supervisors, addressing them as “boss,” “sir,” or “ma’am,” signifying professionalism, compliance, and dedication. 
• Reliable. Third-party workers can complete tasks without supervision, express enthusiasm, learn quickly, and listen actively. 
• Service-centered. Offshore customer care agents, especially Filipinos, are among the most experienced in assisting patients and other clients. Their best qualities are hospitality, politeness, and friendliness.

Amenable to Varying Work Shifts for Non-stop Customer Care 

Many third-party professionals agree to work with changing shift schedules. They do their jobs and resolve customer and client concerns and issues, regardless of the outsourced process or the time.

Among American companies’ preferred outsourcing destinations is the Philippines. The Asian country is about 15 hours ahead of Phoenix. When your office starts at 8 a.m., the time in the Philippines is 11 p.m. They work U.S. hours, and most Filipino third-party agents work the night shift.

So, while your in-house staff attends to customers during the day, the Filipino third-party team continues the operations from night until morning. Attaining 24/7 customer service is one reason outsourcing benefits your business. 

Organized Remote Workers for Increased Productivity

Many BPO providers excel at handling remote support teams for higher efficiency, aiding you in attaining cost savings through outsourcing.

Discover some practical procedures remote workers use to raise efficiency: 

• Utilize communication applications. Virtual workers engage with one another using simple and affordable video and audio chatting apps. 
• Harness cloud-based platforms. With cloud computing, remote workers can quickly obtain relevant and timely information. 
• Hold regular virtual meetings. They consistently meet with their team leaders and colleagues to discuss the project status. 
• Establish a knowledge center. Using an online resource with up-to-date and helpful information, agents can effectively handle complicated customer questions and issues.

How to Find an Outsourcing Partner 

Follow these six tips to find the right BPO partner to maximize the ROI of outsourcing in Phoenix.   

• Develop targets and benchmarks. Formulate outsourcing initiatives with decision-makers, managers, and other organization members. Pick the appropriate workforce size, communication modes (e.g., live chats, messaging apps, and social networks), and outsourcing method (offshore or onshore) for your specific needs.
• Look into prospective BPO partners. Examine each prospect’s skills, expertise, and assets. Pick an offshore outsourcing company with specialized teams and the latest solutions. They enhance the efficiency of assigned activities, helping improve your cost savings through outsourcing. Skilled and experienced third-party workers are required. 
• Obtain an exhaustive list of service rates. To better manage your Phoenix company’s budget, get a detailed list of service fees, including additional and unexpected charges. Check screened BPO providers’ pricing, compute payment bundles, and perform comparison research. 
• Prepare a request for proposal (RFP). Narrow down the pool of applicants and issue an RFP to every interested candidate on your list. It must specify the nature and extent of the outsourced duties, timetables, cost limits, and recommended solutions to expected challenges. 
• Team up with a service provider that follows your specifications. Draft a service-level agreement (SLA) with the new vendor, outlining the required scope and types of assistance. The SLA specifies outsourcing guidelines and key performance indicators (KPIs).
• Keep in constant contact with your partner. Maintain open communication channels while tracking outsourced procedures. Assessing the third-party team’s performance per the SLA helps you realize better cost savings and efficiency. Sustain communication when outsourcing to quickly address misunderstandings and concerns. 

The Bottom Line

Outsourcing your back-end processes lets you focus on your core competencies. These income-generating projects include designing and introducing improved products and services, increasing marketing activities, and investing in research and development to enhance our competitive edge. 

Third-party professionals can work on non-core processes without disrupting your primary operations. Collaborating with the right BPO provider can mean doing more with less. You improve output, efficiency, and, ultimately, revenue cost-effectively. 

Let’s connect if you want to learn more about increasing cost savings and efficiency through outsourcing!