A Better Alternative to Customer Service Outsourcing

Having a prompt outsourced customer service can be a game changer for a business. Interactions with customers have a significant impact on the reputation and overall business performance. Maintaining a better customer relationship needs a better customer service team. 

It becomes difficult to form an in-house customer service team since it requires a big staff and infrastructure. However, initially, companies opted for outsourcing to Business Process Outsourcing BPOs, changes to international or offshore outsourcing teams, and finally culminated into a recent solution which offers benefits of outsourcing and of insourcing– Employer of Record (EOR).

According to the study, 88% of consumers are more likely to make another purchase when they receive excellent customer service. Due to this businesses are constantly looking for a better option that is a more efficient and cost-effective work model. Here is the companies’ journey to finding the best work model to form a customer service team. Each stage of the journey has some advantages and challenges which eventually reflect on efficiency, cost savings, and better quality of customer service. Let’s understand this crucial evolution of businesses.

In-House Customer Service Team Challenges

Initially, many businesses opted for in-house customer service teams for better control over quality and operational activities. The team operates within the company’s premises. However, as this model offers some advantages of control over quality and operations, it also brings a few challenges.

The prime challenge for establishing a customer service team is infrastructure. This office requires a significant investment in infrastructure. The expenses include office space, equipment, and technology. If the company is a small to mid-sized business, it will bring a financial burden. 

It seems having an In-house team is an expensive option. Scaling would be a challenge during peak times of holidays or at the time of project launching. Also, training and hiring would be a time-consuming process.

Managing an in-house customer service team includes administrative overhead, payroll, benefits, and compliance with labor laws which affects the concentration of the core business functions. To overcome these challenges companies looked for specialist in the industry of customer service who could offer better solutions with lesser cost than running the operations internally.

Outsourced Customer Service: A BPO

Most businesses have started utilizing business process outsourcing (BPO) to overcome the challenges of in-house teams. BPOs are known for handling customer service functions with the help of their prowess and economies of scale.

Outsourcing appeared as a cost-saving option. BPOs select regions that are less expensive in terms of labor costs. It also reduces the cost of infrastructure and personnel. BPOs are better than in-house teams when ramping up or down their functions to complete the demands and provide flexibility. With the help of outsourced experts, the company experiences quality service and customer satisfaction.

However, the evolution is inevitable. Companies may demand more control over the quality of service. Following the service standards and brand representation can be challenging for an outsourced customer service team. Businesses were still not satisfied with the cost it saved. Communication is another challenge the companies faced that impacted the customer experience.

As the result of evolution, offshore outsourcing customer service appeared as an option with the capability of serving the purposes.

Offshore Outsourcing of Customer Service

Due to the concerning nature of local BPOs or outsourced customer service teams, companies chose to go global. When a company grows or wants to expand its customer base internationally, they have always chosen offshore customer service. 

Due to the different time zones, companies can offer 24/7 support to their customers which will lead to better customer satisfaction. Offshore customer service often provides lower labor costs as compared to the locally outsourced customer service team. 

However, ensuring quality control and monitoring the team across the country needs a robust training and monitoring mechanism. Also, data security is a concern for outsourced customer service teams. It includes sharing customers’ information with the outsourced customer service team which raises concerns about security and privacy. 

At the same time, talent retention with the outsourcing agencies became a big concern for the businesses. Companies were looking for a model that would provide in-house and outsourcing advantages with security. Companies started exploring the Employer of Record(EOR)type of business model option that provides a comprehensive solution to all the issues. Let’s understand why employer of record.

Use Employer of Record Services to replace Outsourced Customer Service

After facing all the barriers, the businesses established a better option than outsourcing in managing remote teams which is the Employer of record.

 

Cost-effective Option: 

Forming a customer service team requires a big infrastructure due to a huge number of staff members. For post-sale virtual support where the team has to handle inbound and outbound calls, EOR has a solution as a remote team. 

Having a remote team with the employer of record service can save the cost of infrastructure and a special HR force. Employing an EOR can help assign the proper expertise and cut down on overhead expenses. Companies can tap into the global talent pool by creating an employer of record (EOR) and avoid the expensive setup and legal costs associated with setting up a customer service team abroad. Hiring competent individuals from across the globe enables companies to maintain minimal expenses.

Simplified Administration and Compliance: 

As the customer service team has client’s important information the concerns around data breaches and confidentiality rank high among businesses. Certain team members can work on similar projects from many clients at once when outsourcing.

All of the information in the employer of record is safe and compliant. The entire task of ensuring its efficient operation falls to the EOR. Navigating the legal and regulatory requirements of multiple countries may be challenging. An EOR model for offshore customer support teams takes on these responsibilities and ensures that local employment requirements, tax rules, and labor laws are adhered to. By doing this, businesses can lower their risks and avoid paying hefty fines.

Focus on Core Functions: 

EOR finds a proficient customer service team that can handle customer’s post-sale inquiries with zero errors. Also, some companies that use EOR services claim to save between thirty and forty percent of their time on administrative work. Over 60% of businesses acknowledge that EOR has lowered the risk of noncompliance.

By hiring an EOR to manage employment-related administrative duties, businesses can free up valuable time and resources. This frees them up from the complexities of payroll and HR, allowing them to concentrate on strategic projects, growth, and innovation.

Scalability and Flexibility: 

An EOR offers the ability to scale teams up or down based on business requirements. An EOR allows a company to adapt to changing conditions without being limited by traditional employment arrangements.

The EOR market is expanding and turning into a versatile choice for all companies worldwide. With a compound annual growth rate of 6.9%, the EOR market, valued at $4,236 billion in 2021, is expected to reach $6,795 billion by 2028.

Talent Retention: 

Finding the right talent is a tough task and EOR does that smoothly since they have a great knowledge of local talents. However, talent retention becomes an issue. EOR’s positive work environment and competitive perks can have a big impact on talent retention. By doing this, businesses may create enduring relationships with the offshore customer support crew and guarantee continuity and consistency in their everyday operations.

Conclusion

In conclusion, businesses must hire a flexible and affordable customer service team that will assure customer retention because with customer service teams profits can rise by 25% to 95% simply by 5% more in customer retention rates. if they want to stay competitive in this dynamic business environment. Unlike outsourcing and international outsourcing, which have only provided temporary solutions, the employer of record model provides a thorough and long-term solution for setting up and managing overseas customer care teams.

By using an EOR, businesses can focus on their core business activities, speed up administrative and regulatory processes, and access the global talent pool. Businesses may successfully harness the power of digital marketing platforms to push growth and success in the post-pandemic world by utilizing the scalability, flexibility, and integration that the EOR model for customer support teams offers. This is because it assists businesses in handling the complexities of global employment.

The best way to build a highly productive, cost-effective, and flexible customer service workforce that can compete in the global market in a setting where business is critical is to become the Employer of Record.