In-house vs outsourced customer service: a cost comparison worksheet
Comparing an outsourcing quote with agent salaries makes outsourcing look expensive and in-house look cheap. A fair comparison counts every cost on both sides and divides by the work actually done. This worksheet shows you how.
The short answer
Outsourcing is often cheaper, but the only way to know is to compare fully loaded cost per handled contact on both sides:
- Add up every monthly cost of your in-house team, not just wages.
- Add up the full monthly cost of outsourcing, including your own time managing the partner.
- Divide each total by the calls, emails and chats handled in that month.
The lower cost per contact wins on price. Then weigh quality, control and flexibility, which the numbers do not capture.
In-house: cost lines to include
Use monthly figures. For yearly costs, divide by 12.
| Cost line | How to work it out |
|---|---|
| Agent pay | Number of agents × monthly pay, including overtime |
| Benefits and payroll taxes | Health cover, retirement contributions, employer taxes and paid leave for each agent |
| Recruiting | Advertising, agency fees and interview time for each hire × hires per month |
| Training | Trainer time plus new hires' paid time before they take contacts on their own |
| Staff turnover | Recruiting and training cost for each replacement × leavers per month, plus lost output while seats are empty |
| Supervisors and quality assurance | Team leads, QA reviewers and workforce planners, with their benefits |
| Workspace | Rent, utilities and facilities for the space the team uses |
| Equipment | Computers, headsets and furniture, spread over their useful life |
| Software seats | CRM, helpdesk, chat, phone system and QA tools × number of users |
| Telephony | Phone lines, numbers and call minutes |
| After-hours and weekend premiums | Shift differentials, on-call pay or extra staff to cover evenings, nights and weekends |
| Management time | Hours your managers spend on the team × their hourly cost |
Outsourced: cost lines to include
| Cost line | How to work it out |
|---|---|
| The provider's charge | Depends on the model: seats × seat rate, billed minutes × per-minute rate, a fixed monthly fee, a project price, or commission on sales |
| Setup | Any one-off onboarding or setup charge, spread over the months you expect the program to run |
| Your oversight time | Hours your team spends on calibration, reviews and answering agent questions × their hourly cost |
| Integration and access | Extra software seats for the provider's agents and any work to connect phone and CRM systems |
Not sure which pricing model fits your volumes? See per-seat vs per-minute pricing.
Calculate cost per handled contact
- In-house cost per contact = total monthly in-house cost ÷ contacts handled in the month
- Outsourced cost per contact = total monthly outsourced cost ÷ contacts the provider handled in the month
Count contacts the same way on both sides, for example calls answered plus emails and chats resolved. Run the numbers for your busiest and quietest months as well as an average one: idle time in quiet months raises in-house cost per contact, and peaks can mean overtime or missed calls.
Costs that are easy to miss
- Missed and abandoned calls: lost sales and repeat contacts when nobody answers, especially after hours. See after-hours and overflow coverage.
- Empty seats: while you recruit and train replacements, the rest of the team absorbs the work or customers wait.
- Management attention: time spent hiring, scheduling and coaching is time not spent on the rest of the business.
When in-house wins
- The work needs deep product, technical or regulatory knowledge that is hard to hand over.
- Volume is small and steady enough for existing staff to absorb without extra hires.
- Customer conversations are central to how you compete, and you want them close to product and leadership.
A common middle path is to keep complex or high-value contacts in-house and outsource overflow, after-hours or routine contacts.
Comparing with KCG BPO
KCG BPO offers five ways to buy from Kingston, Jamaica: dedicated agents priced per seat, per-minute pricing billed on talk time with no minimum commitment, managed services for a monthly fee, project-based outsourcing quoted per project, and commission-based sales paid on results. Every program runs 24/7, agents work in your own CRM and ticketing systems, and you receive weekly performance reports and monthly review meetings. Most programs go live in 2–4 weeks.
Send us your monthly volumes, hours and channels and we will quote the models that fit, so you can drop real figures into this worksheet. See also how to brief an outsourced call center, call center KPIs explained and how to choose an outsourcing partner.
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Outsourcing costs: FAQs
Is it cheaper to outsource customer service?
Often, but not always. Compare the fully loaded cost of your own team, including benefits, recruiting, training, staff turnover, supervision, workspace, tools and management time, with the full cost of outsourcing, including your own oversight time. Divide each by the contacts handled to compare like with like.
What is the fully loaded cost per contact?
It is everything you spend on customer service in a month divided by the number of calls, emails and chats handled that month. Using the full cost, not just agent wages, is what makes an in-house team and an outsourced quote comparable.
When does keeping customer service in-house make sense?
When the work needs deep product or regulatory knowledge that is hard to transfer, when volume is small and steady enough for existing staff to absorb, or when customer conversations are a core part of how you differentiate. Many companies keep these in-house and outsource overflow, after-hours or routine contacts.
Want real figures for the outsourced column?
Send us your volumes, hours and channels and we'll quote the models that fit.