Low Unemployment: One More Reason to Outsource Your Contact Center
February 11, 2019
By: Scott Newman
The low U.S. unemployment rate, currently four percent, tends to have a detrimental effect on employee retention, especially among low wage, entry-level positions, such as those found in contact centers. In those cases, turnover rates spike as competition for labor increases.
That’s why, in today’s economic climate, companies should not rely on filling their internal contact centers but outsource all or part of their customer service needs, not only as a cost savings measure but also as a diversification and stability plan.
Scalable Staffing During Busy Seasons
Outsourcing relieves the burden of staffing during busy seasons when recruiting new agents ramps up.
A retail organization that needs to hire 100 full-time customer service employees to staff the busy holiday season but finds that competition in the job market makes it untenable, runs a considerable risk: Customer satisfaction score decrease, AHT goes up, as do response times and abandonment rates. Quality and service level are adversely affected as well.
Diversifying by adding an outsourcing partner or two allows the retailer to scale up or down more easily and offload some of the hiring responsibilities. It’s almost like guaranteed staff for their business.
One client of ours, in Canada, follows that path: Rather than risk their business during the busy season trying to staff all the jobs themselves, they outsource to two partners. The client routes the call volume proportionally among the three centers and delivers consistently from a staffing perspective.
Offsetting Higher Wages
Another issue affecting U.S.-based contact centers is the rising minimum wage. Fifteen dollars per hour is now the going rate in many places.
The general rule (for U.S. work) is to take the raw wage to the employee and double it to get a fully-loaded cost: $15 per hour now becomes $30.
Add to that the fact low unemployment rates put even more pressure on businesses to raise wages to retain employees. Outsourcing, on the other hand, can help keep costs down. (In Belize, where our contact centers are located, companies can save as much as 50 percent or more compared to domestic rates.)
“The number one concern of U.S. businesses right now is the ability to attract and retain employees,” said Karen Kerrigan, president and CEO of the Small Business & Entrepreneurship Council, a small business advocacy organization, regarding the current economic climate.
“Many are having a difficult time finding the human capital needed to manage growth opportunities, resulting in the need to boost wage rates, offer more benefits, and provide other amenities.”
She added that businesses must decide how they will grow: “Will they wait until they can hire the employees they need or find another approach?”
“Another approach” is what outsourcing offers. It solves the employee shortage and does so cost-effectively.
“Outsourcing is a great solution for any business that wants to be more productive, grow the company, and focus on their core competencies,” she said.
Offshore vs. Nearshore Outsourcing
When it comes to outsourcing, the issue of whether to offshore to countries such as the Philippines and India or stay closer to home by choosing a nearshore destination comes into question.
For U.S. and Canadian-based companies, nearshore outsourcing to the Caribbean or Latin America presents an attractive alternative for several reasons: Time zones are similar, making it easier to communicate; travel times are reduced significantly; cultural differences are less, and cost, while not as inexpensive as the Philippines or India, is competitive.
Related resource: 3 Reasons Nearshore Outsourcing Is a Better Bet Than Offshoring
Belize offers even more benefits:
- English is the official language. Belizeans are native English speakers;
- The country is heavily influenced by U.S. media, trends, and customs. Agents can go off-script with ease;
- Belize is within two to four hours of key U.S. cities by air, and more airlines offer direct flights;
- Belizeans consider contact center jobs to be growth opportunities, which means less turnover;
- Unlike some other Latin and Central American countries, Belize enjoys a very stable government, society, and business environment where the BPO industry is respected and promoted. (Belize’s Prime Minister, Dean Barrow, even mentioned Transparent BPO in his annual New Year’s address.)
If your company is experiencing high turnover or having difficulties recruiting due to low unemployment, consider outsourcing. When you do, look at Belize and Transparent BPO.
We offer flexible, customizable, brand-boosting nearshore contact center outsourcing solutions for mid-size and enterprise companies in the U.S. and Canada. We create the right mix of value and quality to fit your business needs.
We call it The Transparent Difference — a promise we deliver on every day.