Do you really need to keep business onshore or just wondering if domestic outsourcing is the best solution for your company?
Is paying a premium for domestic onshoring worth it, or should you outsource to a lower-priced team offshore?
When it comes to outsourcing, there’s plenty of myths floating around—we’re here with 40+ years of experience in the customer service industry to help you sort out the facts. If you’re considering whether domestic call center outsourcing is right for your team, here are the pros and cons you need to know to make the best decision.
Pros of Domestic Call Center Outsourcing
When it comes to outsourcing, many companies turn to domestic call centers as a “safe” or “risk-free” option. Since the call center is located domestically, they assume that they’ll receive the same quality they would receive in-house.
While this is often true, high quality is just one benefit of domestic call center outsourcing—in addition, outsourcing domestically provides you with:
- Access to a skilled labor market. Outsourcing doesn’t just outsource your agents—it also outsources the job of recruiting, sourcing, interviewing, hiring, training and managing those agents. For small companies who don’t have the resources to manage that process in-house, outsourcing is a way to grow your customer service without depleting internal resources.
For larger companies, outsourcing provides an effective and affordable way to scale—especially if you need to scale up and down several times throughout the year.
- Reduced language and cultural barriers. This goes back to quality, but also extends to customer satisfaction and brand perception. With US-based employees, you’re likely to encounter very few or no language or cultural barriers, a common problem among outsourced call center teams. As such, your agents will be able to connect with your clients more immediately and reduce frustration and miscommunications with customers.
Outsourcing domestically is also easier for channels that are more casual or conversational, like social media. On these channels, customers are more likely to use slang, acronyms, idioms, sarcasm and other culturally-based phrases and communications, which will be much easier for a US-based agent to understand and respond to appropriately.
- Enhanced customer service and support. Similarly, onshore agents are more likely to be able to provide the highest quality of service and support—not just because they can better understand the customer, but because they have a higher level of connection with the customer’s situation, culture, communication styles and so on.
This is not to say that nearshore or offshore call centers won’t be able to provide this, or that every domestic call center provides exceptional quality. That’s not the case, and it would be a mistake to think so. However, brands who want or need extremely professional agents, such as healthcare, legal or luxury brands, may find onshore agents to be a better fit.
- Greater control over the outsourcing process. Quality assurance, call center processes, workplace culture, communication between teams—all of this is easier to manage and exercise some control over when it’s closer to you geographically. After all, which is easier to visit—an outsourced call center team in New York or the Philippines? Not only is it easier to visit and manage nearby call centers, but there’s also more freedom to have control in workplace culture, communication processes and more.
Cons of Domestic Call Center Outsourcing
Of course, outsourcing domestically isn’t a magic bullet, and it’s not the right option for everyone. There are some clear downsides to domestic call center outsourcing as well:
- Higher labor costs. Domestic, or onshore, call center outsourcing is typically one of the most expensive ways to outsource, due to the higher labor costs and living expenses in the United States compared to other geographical areas.
With that in mind, domestic outsourcing is still usually more affordable than managing an in-house team. When outsourcing, you have an external provider managing recruiting, sourcing, hiring and training, team management, overhead, and software costs, so your overall cost per agent is lower than in-house teams. However, per-agent costs are higher for onshoring compared to nearshore or offshore outsourcing.
- Smaller labor and talent pools. Of course, if you’re working with a domestic outsourcing provider, your labor pool is going to be limited to the labor market in the US. Sounds obvious? Yes. But consider some of the smaller consequences of such a decision: not only will your talent be limited to one geographic market, but it’s also subject to all the ebbs and flows of that market. When talent is scarce in the US, scaling up your call center staff will be more difficult (or more expensive). If prices for US talent increases, you can be sure that you’ll see that reflected in your team as well.
Keep in mind too that offshore labor markets can be much broader than the US market, with just as much talent as the domestic workforce.
- Limited access to call center services. A common misconception is that working with a domestic call center will provide you with the widest range and availability of services, but this simply isn’t true. For example, onshore call centers frequently have fewer multilingual agents, which can make it difficult for you to scale your operations (and your customer service) globally, or even serve a multilingual US consumer base.
In contrast, nearshore call centers typically have a high number of Spanish or French-speaking bilingual agents who can provide multilingual call center services for your brand. In addition, providing after-hours service, or 24/7 service, may be more difficult or more expensive when working with domestic outsourcing providers. Due to time zone differences, this is another feature that’s easier and cheaper to provide if you work with offshore outsourcing teams.
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Domestic Call Centers vs Off-Shore Solutions
If you’re not sold on domestic call centers, what are your other options?
In short, there are three types of call centers when it comes to location: domestic call centers, nearshore call centers, and offshore call centers. Onshore, or domestic call centers are located in the same country as your business, whereas offshore call centers are located in a country that is geographically far from yours. India and the Philippines are popular places for offshore call centers. Nearshore call centers are a medium-ground solution—not located in your country of business, but somewhere nearby. For US-based companies, this usually means Mexico, Puerto Rico or Latin America.
Domestic call centers offer the most control, but for the highest cost. Is paying a premium worth it? In some cases, it may be, but for many companies, offshore solutions provide a more efficient ROI.
Offshore call centers are usually the cheapest, but quality often suffers as a result. In addition, with time zone disparity, geographic distance and cultural barriers, there’s less control over operations and agents are typically less familiar with US languages and culture, often resulting in lower-quality service and connections.
For many companies, nearshore call centers offer a middle ground with both high-quality agents and affordable pricing. With nearshore, there’s less of a linguistic or cultural barrier, but labor costs are still lower compared to domestic outsourcing.
Factors to Consider When Choosing a Domestic Call Center Outsourcing Partner
If you decide to move forward with a domestic call center outsourcing partner, what factors and key features should you look for and consider before signing any contracts?
Location and time zone differences. Even with a domestic provider, there’s a possibility of small time zone differences (up to six hours in the US, depending on your location). If you’re working with a domestic partner for increased control and proximity, make sure that a domestic partner is truly the most convenient option.
In some cases, a nearshore partner offers more proximity and time zone overlap. For example, a Texas-based company working with a nearshore partner in Northern Mexico would have greater proximity than if they partnered with a New York-based provider.
Quality assurance and monitoring processes. Onshore outsourcing typically yields the most control and insight into quality assurance processes and the greatest ability to monitor and be involved with the day-to-day operations of your call center. As you look for and select a call center partner, be sure to understand their existing quality assurance processes, and determine how you will be able to be involved.
Scalability and flexibility. When choosing a domestic call center partner, ensure that they’ll be able to grow with you and provide scalability and flexibility as your needs change and expand. When it comes to scalability, a nearshore provider is typically best, as they offer access to a wider and more affordable labor pool, while also offering more pricing options that make scaling more affordable.
However, domestic call centers offer flexible options as well—you just need to consider what kinds of flexibility and scalability you’re likely to need in the upcoming years, and ensure that your potential provider can offer this.
Security and data privacy. A domestic provider often offers the highest quality in terms of security and data privacy—from familiarity with and adherence to US laws and customs to the increased security that comes with keeping customer data onshore, consider the level of security and data privacy your provider can offer—and if it matches the level that you need.
Industry regulations and funding. Finally, consider what industry or funding requirements specific to your business may limit your outsourcing options. For some industries that receive government grants or other external funding, there may be stipulations that require all company employees to be located in the US. In these cases, domestic outsourcing is your only option. There may be other regulations, whether legal, tax-related, security-related or otherwise that make domestic outsourcing your best bet.
Is Domestic Call Center Outsourcing Successful?
If you’re looking for a positive balance between ROI and affordability, domestic outsourcing can be an excellent option that frees up your internal team to focus on core growth, while also providing cost savings compared to maintaining an in-house team.
Domestic call center outsourcing can also have a big impact on your business and bottom line, and not just from the cost savings it provides. For example, Global Response’s domestic call center teams have improved customer conversions and retention, lowered business costs, increased online sales by 25%, reduced customer attrition and more.
Our decades of experience and expertise in customer service enable us to provide clients with exceptional experiences. Our onshore agents work as dedicated brand specialists, integrating seamlessly within existing processes or reinventing customer service workflows to raise the bar on customer experiences. Either way, we’re in the market of delivering real results, every time.
For domestic call center outsourcing you can trust, connect with an expert from Global Response today.
