Outsourcing 101: Breaking Down Outsourcing Cost

TaskUs SVP of Client Services, Kerry Carstairs, discusses the most challenging outsourcing cost implications on Inside Out.

Published on January 9, 2023
Last Updated on April 28, 2023

When it comes to outsourcing business functions, one of the most common and crucial concerns is cost. Outsourcing can be a great way to save money and free up resources for other business areas. However, it can also drain the budget if your outsourcing partner fails to deliver. So, is outsourcing cost really worth it?

To understand outsourced call center pricing and other topics surrounding outsourcing on a deeper level, TaskUs launched Inside Out, an online series where leaders talk about the most challenging outsourcing questions and situations. In its fourth episode, Kerry Carstairs, TaskUs Senior Vice President of Client Services, answers the determining questions about call center outsourcing costs to help businesses make the best decisions possible.

Is it cheaper to outsource versus operating in-house?

There is no doubt that one of the advantages of outsourcing is its ability to cut costs. However, cheaper options are not always the best solutions.

The answer to the question of whether outsourcing is always the more affordable option depends on many factors. Businesses are built uniquely and their requirements vary. Most of the time, this is why in-house is preferred to control the operations better.

However, keeping operations in-house can also be more expensive than outsourced customer service costs. Besides hiring and training employees, businesses may need to invest in additional equipment or infrastructure. Additionally, in-house operations may be less efficient, as employees may have a different level of expertise than those working for a third-party provider.

On the other hand, outsourcing allows businesses to tap into specialized expertise and global resources. A small business, for example, may outsource its billing or IT support to a third party with more experience and resources in those areas. Global companies can outsource customer experience management to locations with specific language requirements.

“The thing that's interesting about cost implications is ensuring companies are clear on what is included in outsourcing costs versus in-house. Many times, the in-house cost implications are not fully realized, which is why it’s great to partner with a company that will help make sure you're comparing in-house costs and outsource costs.”

Turning your operations over to a third party may or may not be the only way to cut costs. It takes a good business process outsourcing (BPO) partner to evaluate your needs, provide you with the best solution possible, and make the most out of your partnership.

What pricing models exist in outsourcing? 

There are different pricing models that BPO companies offer. By understanding the options available, businesses can make informed decisions about which pricing model is most appropriate for their needs.

“There are a few pricing models, which include productive hour pricing, per-minute pricing, and outcome-based pricing. Other things to consider are geography, scope of work, and complexity of work,” Kerry elaborates. 

It is essential to carefully consider the various pricing models available when outsourcing work, as they can significantly impact the project’s cost and effectiveness. The most appropriate outsourced call center pricing model will depend on the specific needs and goals of the client and the nature of the work being performed.

What are the inclusions in outsourced call center pricing?

A 2022 report by Deloitte showed that cost reduction is still one of the top reasons for outsourcing. However, more and more businesses are considering outsourcing to access new capabilities, shift to flexible business and operating models, and keep up with technology. Companies aren’t just cutting costs anymore; they’re seeking to add more value to their partnerships. 

Because of that, outsourced customer service costs include a variety of factors. Kerry explains, “It can be an all-in pricing or it can be separated out by role or by function. What's most important is to understand what is included in either model. Is training, quality, recruitment, implementation costs included or is it in the all-in pricing? And, are there any value-added services that the client may want to have included that are important to get identified?”

In general, clients and BPO providers must have clear and transparent communication about the services needed and the outsourcing costs to create and maintain a healthy and productive partnership. The offered call center outsourcing costs should never have any hidden charges or compromises in other aspects of the business.

Reimagine Outsourcing with Us

With a Ridiculously Good partnership of You + Us, we can navigate through hurdles and continue to achieve positive outcomes. When it comes to outsourcing costs, we continue to provide flexible solutions for our clients’ best interests. 

“At TaskUs, we have two different opportunities to take advantage of—both our launch team and our enterprise team—which provides our clients with flexibility based on what their needs are,” Kerry explains. 

Recognized by the Everest Group as the World's Fastest Growing Business Process (outsourcing) Service Provider and quickly gaining popularity in Gartner Peer Insights Review, our team has been agile, reactive, and proactive in the face of micro and macro conditions. Fueled by our dynamic partnerships with our clients and support from our Ridiculously Talented Teammates, we’re well-positioned to take on no matter what the future brings. 

We will be covering and discussing more outsourcing topics soon. Keep an eye out for our next episodes!

outsourcing cost outsourced customer service cost
  • 1^The Pros And Cons Of Outsourcing
  • 2^Global outsourcing survey 2022 
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