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Customer Service Outsourcing
The labor cost savings alone can make the practice of exporting customer support jobs outside the U.S. seem like a very appealing alternative. For example, the average salary for a customer service agent in India is only about $2,400 per year, a far cry from the salary companies typically pay for similar services in the U.S. In addition, call center workers in India are nearly all college educated, whereas their domestic counterparts are generally only high school graduates. Cheaper, better-educated labor sounds like a dream come true for most corporate executives. However, there are a few drawbacks to the offshoring scenario in addition to the obvious benefits.

Over the past few years, companies have relocated numerous call centers to India by U.S. companies anxious to take advantage of the massive reduction in overall labor costs that can be accomplished by such a move. In fact, there are now more than 60,000 agent professionals in India, who are devoted entirely to offshore outsourcing, a number that was up significantly from the previous year. India is clearly the fastest growing center for such activity, followed by Mexico and Canada. However, the picture for offshoring is not completely rosy. Companies have had to face a few unexpected problems in the drive to outsource functions to other countries.

One of the biggest difficulties lies in the language barrier. If customers cannot understand the other end of the conversation, it is problematic for the customer and may end up being detrimental for the business as well. Customers who dont have a good experience the first time, are not likely to become repeat callers or purchasers.

Even though labor costs can be drastically reduced through an offshore solution, other costs may skyrocket. For example, even though telephone charges for locations outside the U.S. have decreased substantially over the past few years, they are still considerably higher than domestic call costs. Although a phone call to India may be down to about 8-9 cents a minute, it is still considerably more expensive than the 3 cents a minute calls that US domestic phone companies offer. Other costs that may make the reduced cost labor less viable include infrastructure costs, travel costs, training costs, and dual management expenses. In addition to the public controversy about lost jobs and lack of appropriate communications skills on the part of overseas agents, these aspects of offshore outsourcing can create some very real problems.

One solution that some companies are moving toward is either a combination approach, or outsourcing to companies in Canada or Mexico. The advantage of a combination approach, or having more than one call center around the globe, is that 24-hour operation becomes a reality without the problems generally associated with it. Uninterrupted service becomes less costly when calls can simply be transferred automatically to whichever call center is currently open within the parameters of regular business hours. This type of hybrid approach lets a company realize thecost savings of offshore labor, without some of the headaches that have been associated with it.

And, India is not the only place where call centers can be located for labor cost savings. Recent estimates indicate that moving a call center to Canada can provide a small savings over U.S. labor costs and a move to Mexico can save up to half the cost of labor. The advantage of moving to Canada is that the language barrier is virtually nonexistent by comparison with India or even Mexico. Companies that do business in states with large Spanish speaking populations can realize the same advantage by switching these operations to Mexico. However, the real solution may be the hybrid approach, with different call centers located in different parts of the world to serve different needs and lower overall costs for multinational companies.


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