The Hidden Costs of a Customer Service Team

Companies who want to offer quality customer service face a choice: manage it in-house, or outsource to a customer support specialist?

Costs are a critical factor in making this decision. But many companies consider salary and benefit costs alone. In reality, building a support team in-house involves a number of hidden costs including recruiting, training, infrastructure, and inefficient scheduling. All these add up to a hefty sum for a function that may not be core to the business.

Hidden costs are like the fine print in a legal document - they're not in plain sight but they will affect you down the road. Therefore, you want to have a very complete picture of the costs involved for each.

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Hiring Costs

If you’re hiring, you must go through a sometimes lengthy process that involves time and money. Advertising the position, paying for background checks and other similar costs may seem minimal but they add up.

According to the Society for Human Resource Management, the average cost-per-hire is $4,129, and it takes 42 days to fill a given position. That's a lot of time and money!

In short, talent acquisition can rack up a size-able bill even before the agents step foot in your company. Furthermore, the customer service industry typically has very high employee turnover. Every agent lost is a cost. A customer service rep will then need three months of onboarding and even more to be fully productive. After this, bear in mind that employee churn in this space is high and it costs a significant amount to replace a rep. Ouch!

Outsourcing specialists, by contrast, have a competitive advantage that makes it cheaper to outsource a call center and recruit customer service agents. CloudTask, for example, engages with top talent in the industry, and can easily bring on new people when clients require it.

Salaries

Let’s begin with the basic costs one would consider for an in-house team of reps: salaries.

The average salary in the United States for a Customer Service Representative is $30,688 and the average for a Customer Service Manager is $39,694 a year.

Customer success is more complex than support and costs way more. The average salary of a Customer Success Rep is $70,179 a year and the Manager is $81,414 a year.

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Infrastructure Costs

If you’re hiring in-house, you need office space, desks or workstations, headsets, phones, computers, and more. The real estate alone costs alone can be prohibitive, particularly for smaller companies.

Monthly rent for urban office space ranges from $1.74 per square foot in Atlanta to $6.16 in New York. You probably want a minimum of 100 square feet per person, which means office space for one customer service agent could run you more than $7,000 per year.

Furthermore, you may need to plan for potential growth of the customer service team, and take up office space accordingly.

Training Costs

Poorly trained customer support staff can misrepresent your brand, and can cost you money. It’s imperative to create a training program in which the agents are taught not only the ins-and-outs of the product they will be servicing, but also, the company’s core values and policies, customer service best practices, and more. Training programs have to be periodically updated as the company evolves.

The time and money invested in creating these training programs is non-refundable. In comparison, customer service outsourcing firms can rely on their experience to create appropriate training modules quickly and efficiently. Plus, training programs are continually updated to keep up with latest industry trends and for compliance with changing regulations.

Counting the Costs

Are you prepared to cover all the costs above on an on-going basis? Perhaps you should consider outsourcing customer service? Not just because you save time and money, but because you want to increase your customer satisfaction and retention with the help of trained teams of experts.

About the Author

Wesley Burger, Marketing Director at CloudTask, a managed workforce provider for growing companies looking for B2B Sales and Customer Support solutions. A strategic brand marketer and thought leader with 10+ years of sales and marketing experience managing B2B service brands, and helping companies design products, services, concepts, experiences and ecosystems.  

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