Written by Dion Jay Tality
A call center is integral to handling customer-facing tasks in business. They are vital to streamlining front-office operations, whether assisting customers, pitching sales, or providing technical support.
Enter business process outsourcing (BPO). A third-party service provider can handle your call center operations to help increase your profits and decrease your expenditures. However, preparing for outsourcing costs and setting your budget is crucial.
This page shares the call center cost breakdown. Read on to understand the aspects included in your BPO partner’s service fees.
Call Center Cost Breakdown: What Is Included?
The total contact center cost includes several factors, from labor and technological expenses to related fees and hidden charges. When reviewing fees, remember that outsourcing your call center operation, hiring the right BPO provider, and choosing the correct pricing structure can help you save money in the long term.
Let us explore the various costs involved in your call center operations.
1. Labor Cost: Making the Most of Your Workforce
Labor should be at the top of your call center cost breakdown. Your call center agents are on the front lines, ensuring day-to-day operations. The labor cost includes the following:
- Head Count: The number of agents employed in a call center directly impacts labor costs. A larger workforce typically translates to higher expenses.
- Agent Expertise: The experience and expertise of call center agents influence labor costs. Hiring agents with vast knowledge and specialized skills affects overall expenses.
- Recruitment: The hiring process involves sourcing, screening, and selecting suitable candidates for call center positions. Recruitment expenses can add to your total labor costs.
- Onboarding and Training: Both processes are essential in preparing call center agents for their roles. Costs associated with onboarding and training include administrative tasks, equipment setup, and process or product training programs.
- Employee Wages and Benefits: These aspects form a massive part of labor costs. You consider the salaries and employee benefits, such as health insurance, paid time off, and retirement plans.
2. Technological Expenditures: Harnessing the Power of Technology
Technology should be a more substantial portion of your call center’s cost breakdown. Digital tools and resources are crucial in today’s call center operations. Consider the following technological expenditures:
- Telecommunication: Telecom costs are the expenses of phone lines and telephony services. When opting for a BPO call center, financially prepare for its deployment, ongoing maintenance, and regular usage.
- Tools and Technology: Leverage computer telephony integration (CTI), contact as a service (CCaaS) software, and other applications in your call center operations. Evaluate these expenditures to guarantee efficient utilization of resources.
- Facilities, Equipment, and Resources: Facility costs include office leases and the software, hardware, systems, and networks required to support call center operations. Budgeting for all these items is crucial for maintaining a productive environment.
3. Service Expenses: Ensuring Cost-effective Service Delivery
Service costs are vital to your call center’s cost breakdown. Many businesses outsource to save money.
To know what BPO is, consider this business strategy as entrusting your call center operations to third-party providers. Below are specific outsourcing functions and associated costs:
- Customer service means assisting customers by answering questions, processing requests, providing updates, and resolving issues. Prepare for BPO agent salaries, training costs, and other additional resources required to deliver exceptional customer service.
- Sales and telemarketing seek to promote a business and sell its products or services. Consider associated expenses, such as BPO agent wages, outsourcing structures, lead generation tools, and sales enablement technologies.
- Technical support assists end users of technology, such as computer devices and mobile phones. The service costs include hiring and training staff, implementing help desk software, and maintaining knowledge bases.
Note: The global call center market might grow from $461.1 billion in 2022 to $741.7 billion by 2030. It can expand at a compound annual growth rate (CAGR) of 6.1%. Many businesses outsource their call center operations to third-party providers worldwide.
4. Call Utilization Costs: Maintaining and Reducing Call Consumption
Call utilization costs comprise the largest portion of your call center cost breakdown. This factor refers to how your call center receives incoming calls, places outgoing calls, or both. The higher your call consumption, the greater the price you pay. Therefore, consider the following:
- Call Volume: This refers to the number of incoming and outgoing calls your call center handles. Manage call volume efficiently through proper forecasting and scheduling.
- Call Distribution: This involves routing incoming calls to the most suitable agents within your call center department. Ensure effective and efficient call distribution to reduce customer wait times and optimize agent productivity.
- Call Type: Inbound and outbound calls can have different pricing. See how you can make the most of them, whether receiving incoming calls, placing outgoing calls, or doing both.
- Hours of Operation: Operating hours also impact the call center cost. A call center running during regular business hours is less expensive than a 24/7 operation.
5. Management Cost: Paying Extra Services for Optimized Operations
Management support costs are included in your call center cost breakdown. You need a management team to support your operations, including agents and quality assurance (QA) staff. Take note of the following:
- Operations Management: Your management cost includes salaries for operations managers, supervisors, and team leads, as well as tools and technologies used to effectively manage operations.
- Workforce Management: Workforce management costs are related to the processes and tools used to optimize agent scheduling, forecasting, and performance tracking.
- QA Team: QA team costs pertain to the personnel and resources dedicated to monitoring performance and ensuring adherence to call center protocols.
6. Other Fees and Hidden Charges: Preparing for Extra Costs
Aside from those mentioned above, preparing financially for other fees and hidden charges is best. Set up a contingency plan with proper budgeting for your call center cost breakdown. Below are some costs to expect:
- Consulting Set-up or Onboarding Fees: Fees associated with the consulting services provided by your BPO partner before launching your call center operation
- System Update and Maintenance Fees: Charges for system updates, maintenance, and upgrades to ensure the smooth functioning of your call center technology
- Data Storage and Security Charges: Costs for storing and securing call center data, including fees for cloud storage and investments in data security measures
- Reporting and Analytics Charges: Costs associated with using analytics to gain insights into call center performance and generate reports
- Overtime or After-Hours Support Fees: Extra charges for call center support outside regular working hours and during a high volume of calls
- Contract Termination Costs: Expenses incurred for premature contract termination, such as contractual penalties and remaining contractual obligations
Call Center Cost: How Much Are BPO Services Today?
In call centers, the outsourcing cost varies from one BPO service to another. It also depends on other factors, from geographical location to specialized services. To give you a better idea, the hourly cost of a BPO service can range from $7 to $40.
Now that you understand the call center cost breakdown, the table below shows how much BPO services cost.
|Location||Hourly Cost for Large BPO Company||Hourly Cost for Mid-sized BPO Company|
(U.S. and Canada)
|$32 – $40||$26 – $34|
(Central America, South America, and the Caribbean)
$14 – $20
$11 – $17
(Asia and the Pacific)
|$13 – $17||$7 – $13|
|Eastern Europe||$25 – $30||$19 – $26|
|Western Europe||$28 – $34||$26 – $30|
|Africa||$12 – $16||$10 – $14|
The most expensive outsourcing is onshore, followed by nearshore. BPO firms in these locations can give you access to expertise, technology, and resources to optimize your call center operations. But to save money, work with BPO service providers in Asia-Pacific and Africa.
BPO call centers are generally cost-effective. They can reduce labor and operating expenses without compromising efficiency, quality, or customer satisfaction. However, partnering with the right service provider is the secret to outsourcing success.
Learn about the various pricing structures and see which best suits your outsourced call center operations.
Different Pricing Models for BPO Call Centers
According to Deloitte, cost reduction is the top reason for outsourcing. Businesses of all sizes primarily outsource to cut labor and operating expenses.
To achieve this objective, check the call center cost breakdown and see which BPO pricing model below suits your business.
- Fixed Price (FP) Model: You pay a predetermined, fixed price regularly for call center services. The cost includes the actual volume of calls, workforce, and resources utilized. You get billed monthly, quarterly, or yearly.
- Time and Materials (T&M) Model: You pay for the time and resources used in your call center operations. This pricing structure is often cheaper than the FP model.
- Staffing Model: You pay for the dedicated agents in your call center operations. The total cost is based on the agent headcount and associated salaries.
- Cost Reimbursable Model: You get billed for the cost of providing call center services. These include direct expenses and overhead, with additional markup.
- Consumption-based Pricing Model. You pay for using specific resources or services within your call center. As such, the costs vary based on the level of utilization.
Practical Tips for Optimizing Operations and Reducing Call Center Cost
We discussed the cost breakdown. Now, let us help you find the best ways to save money in the long run.
A balance between optimizing operations and reducing expenditures is key to a successful BPO call center operation. Here is how to achieve this perfect balance:
- Pick a Cost-effective BPO Destination: Choose a country offering lower labor costs, favorable laws, and government support, such as the Philippines, India, Malaysia, Poland, and Ukraine.
- Examine Operations and Set Requirements: A thorough examination will help you identify your call center needs and set your outsourcing requirements.
- Hire The Right Service Provider: What better way to have a robust call center operation than by partnering with the right BPO provider? Hire a partner best suited for your business size, type, niche, budget, and needs.
- Capitalize on Favorable Pricing Structures: Consider the pricing models above and see which fits your business needs and outsourcing requirements.
- Create a Service-Level Agreement (SLA): This legally binding contract defines your operational objectives, key metrics, work scope, and other critical clauses required for a successful BPO operation.
- Decrease Call Volume and Duration: Implement strategies to reduce call volume and duration based on the call center cost breakdown. Provide proactive customer support, offer self-service options, and establish efficient issue-resolution processes.
- Leverage On-demand Staffing: You can employ part-time or remote agents for business flexibility. They help scale your call center operations up and down based on demand.
- Invest in the Latest Digital Tools and Technology: For instance, leverage CCaaS software. About 73% of contact centers report investing in cloud technology to increase uptime, while 72% mention accessing otherwise costly applications.
- Provide BPO Agents with Proper Training: Implementing robust training programs for BPO agents ensures they possess the necessary skills and knowledge for optimized call center operations.
- Streamline Standard Operating Procedures (SOPs): The goal is to improve your call center’s efficiency, guarantee quality service, and increase customer satisfaction (CSAT).
The Bottom Line
Understanding the call center cost breakdown is imperative for effective financial management. Study the actual pricing of a BPO call center operation. Consider the factors impacting the overall cost and choose a pricing model best suited for your business needs and outsourcing requirements.
Ultimately, understanding what you are paying for in a BPO call center helps minimize your financial risks and maximize your overall profits!
Looking for a BPO partner for your front-office functions? You have come to the right place, so let’s connect! Unity Communications can establish your call center operations with a customer-centric workforce and modern technology.
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About The Author
Dion Jay Tality is a content writer and one of the creative forces behind Unity Connect’s blog posts and marketing copy. Before joining Unity Communications, he spent over five years in the BPO industry, wearing various hats—from being a CSR and email and chat support specialist to being an SME and QA analyst. Name it; he tried it!
Passionate about writing, Dion loves to bring ideas to life through the power of words. When he’s not busy crafting content, you might find him working out, enjoying mindful walking, exploring conspiracy theories, or singing at the top of his lungs.