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Call Center Outsourcing: How It Works and Why You May Want to Choose a Different Path

This article was updated on January 5, 2024

Considered call center outsourcing for your business? It’s been around for a while and is something many businesses have traditionally explored.


Perhaps you have a skills gap in your workforce or lack the capacity to handle a particular process? Could outsourcing be the solution? Does the apparent convenience outweigh the potential downsides? Read on and you’ll find out.

Illustration of a female call center agent facing a computer monitor and wearing a phone headset. Floating above the monitor are voice bubbles indicating a conversation.

What Is Call Center Outsourcing?

Call center outsourcing involves hiring a third-party service to deal with your business calls. There are many dedicated companies that operate in this space, so if it’s a route you’re thinking of going down, there are lots to review and choose from.

Generally speaking, call center outsourcing services come in two flavors: inbound and outbound. Inbound services — as the name implies — deal with calls coming into your business, such as customer queries. Meanwhile, outbound centers place calls on your behalf and so are more often used for tasks like sales campaigns.

You’ll find that the cost and the level of service can vary depending on whether you use a shared or dedicated provider. Shared outsourcing agents deal with calls for multiple clients at a time, so the service is often cheaper but lacks the exclusivity you get with a dedicated service. Such dedicated services provide agents to work solely for your business, but this is typically more expensive.

Outsourcing a call center service isn’t an all-or-nothing decision, though. Many organizations use outsourcing for a subset of their call operations while retaining some in-house.

Which Call Center Services Might a Business Choose to Outsource?

You might elect to outsource call center services for a variety of specific purposes. Here are a few common services that are often outsourced:

Call Center Support Services

One of the most popular call center outsourcing services is customer support provision. Businesses of differing sizes may choose this option for different reasons.

For smaller companies with low inbound call volumes, it can make sense to outsource this function rather than maintain an in-house team which might not receive a high enough volume of calls to justify the expenditure. On the other hand, huge corporations often engage third-party customer support services in order to cope with their high volumes of customer calls.

Market Research

Market research is an interesting one. Many of the companies operating in this sector are research specialists rather than generalist call center providers.

While conducting market research is essential for any modern business, quite a few organizations simply don’t have the capacity to retain specialized market research teams in-house. Outsourcing tasks like customer feedback collection and market trend analysis can help with the job of generating actionable, business-critical insights.


Professional selling is a highly specialized skill. The agents employed by the kind of outbound call centers that deal in sales have a lot of experience at this kind of work. For many companies, outsourcing to take advantage of this expertise is one way to grow their presence in competitive markets. If you’re thinking of going down this path, however, expect to pay incentivizing rates. Most sales agencies will expect some kind of performance-related pay somewhere in the mix.

Benefits of Choosing Call Center Outsourcing as a Solution

Whether you’re looking for outbound or inbound call center solutions, outsourcing can offer several benefits.

Cost Reduction

This is probably the first reason many people think of, and it’s often a significant contributing factor in any decision to outsource call center operations.

Outsourcing means you don’t have to pay for:

  • extra computers

  • specialist software licenses

  • phone systems for call center buildings

  • in-house labor costs

In addition, there’s the phenomenon known as “offshoring.” This means outsourcing call center services to a company located in another country. Labor costs can vary depending on the country to which you outsource call center services.

Simplified Staff Management

With outsourcing, you don’t need to recruit, train, or manage call center staff yourself. Typically, your service provider handles all personnel requirements, while you can focus on core business tasks.

Round-the-Clock Service

When you outsource inbound call center operations, it often makes it possible to provide 24/7 customer support. That’s partly because agents may work across different time zones. It’s a service that many outsourcing companies generally offer because it’s in-demand among customers and, therefore, a popular selling point.

Drawbacks of Call Center Outsourcing

At this point, you may be thinking this all sounds like a great idea. Lower costs, less HR-related hassle, round-the-clock service — what’s not to love?

Well, there are some downsides. There are some very real reasons why not every company uses outsourcing. Let’s take a look at some of the most important ones:

Lack of Specialized Knowledge

While some outsourcing companies do bring specific expertise to the table, they can also lack in-depth knowledge of different market sectors. In general, such companies aren’t likely to be as knowledgeable about your company and products as in-house employees. 

If your business is in a highly technical field, for instance, outsourcing to a general third-party agency might not be a great plan.

The last thing you want is to risk alienating your customers by providing them with a subpar support service. That’s a quick way to lose business. So, if your area of work is very specialized, it can better suit your business to leave customer support in the hands of an in-house team.

Loss of Control

You can negotiate a very detailed contract and be meticulous about specifying your brief to an outsourcing company. The reality is, though, you’re handing over a crucial responsibility to someone outside of your company.

By definition, this means that you will typically have less control than before. You will be largely dependent on the outsourcing provider to do a good job, and if they don’t, it might send negative effects cascading down the line, from a less-collaborative employee experience to frustrated customers to a hit on your bottom line.

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Collaboration Bottlenecks

Similarly, splitting out your call center functions means collaboration between the agency staff and your in-house teams can be less efficient. This can cause issues if, say, you need to respond quickly to new developments or do a speedy pivot to address an unforeseen operational challenge.

For instance, your business may move and adapt quickly. That can lead to rapidly evolving scenarios such as new policies, new product offerings, and more. If your call center services are outsourced, you must fully update the provider of all such changes. This takes time and can slow down your implementation of changes.

There’s also the simple fact that because they’re not part of your company, outsourcing staff may not be fully aligned with your goals. After all, theirs are slightly different. Sure, they want to keep you happy as a client, but those brand values that define your business? They won’t necessarily be a priority.

Language Barriers

A specific risk of offshoring is that the local agents may not speak your customers’ language clearly enough to communicate with them easily. This can be frustrating for customers looking for a quick resolution to a problem.

The truth is that developing good customer relationships depends on building trust over time. That begins with excellent communication, so it’s crucial nothing gets in the way of that goal.

Data Security Concerns

If you outsource, it’s possible you’ll be sharing sensitive customer data with the company you hire.

As you can imagine, this can be a tricky area to negotiate. Just think how much effort and resource your business puts into staying compliant with legislation such as HIPAA or GDPR. Then ask yourself this question: Do you trust an outsourcing company to be as conscientious?

Many outsourcing companies do take great care, of course. They have to, because this concern is a particularly serious one for most businesses considering signing up to their services.

The point is, can you be 100% confident your customers’ data will remain safe in someone else’s hands in the same way you can if it’s your own responsibility?

Typical Call Center Outsourcing Costs: What to Consider

Let’s suppose you do decide to put your company call center in the hands of an outsourcing service. What factors influence the kind of costs you’ll be looking at?

Shared or dedicated service: Sharing a taxicab with a friend to split the cost works out cheaper than having the whole cab to yourself. The same principle applies in outsourcing. If you want an outsourcing team to work exclusively on your business, expect to pay more.

Payment model: Payment by the hour is generally the most common model for outsourcing call centers. With this system, you’ll only pay for time that the agents actually spend on calls. However, some contracts can also stipulate performance-related payment or a mixture of the two. A typical example of where you’d see this would be for an outbound sales service.

Call volume: Typically, the more calls you need the outsourcing company to make or receive, the higher their own costs may be. However, unless it’s specifically agreed as part of the deal, you won’t necessarily find that the rate changes as call volumes fluctuate.

This variation can be baked into the contract. Nevertheless, this factor may be an important element of the initial contract negotiations, all depending on which provider you decide to work with.

Range of services: The more services you need, the more you will likely need to pay. The level of skill required to deliver each service also matters. If you just need someone to handle basic inbound call support, you’ll often pay less than you will if you want outbound lead generation performed by marketing experts, for example. Consider the balance of services you need versus what you’re able to budget for.

Location: Thanks to advances in communications technology, a VoIP call center can operate from anywhere in the world. But where outsourcing companies are based will typically impact how much they charge for their services. As businesses, they must account for labor, property, and other costs in their home nations.

Best Practices If You Do Manage an Outsourced Call Center

If you go with an outsourced call center option, there are a number of best practices to follow. Taking these steps will give you the best chance of minimizing the potential hazards of using an outsourcing solution.

Double-Check Security Standards

This is a must. As we’ve already pointed out, sharing your customers’ information with a third party likely involves an element of data security risk.

While outsourcing companies may update their software regularly, it’s still a good idea to ask about this in advance of signing a deal.

What you really need to focus on — and it can sometimes be quite tricky to get the full picture on this — is the outsourcing company’s broader informational environment. Specifically, it’s critical to establish not just that they take their data security responsibilities seriously, but also exactly how.

Ensure that the outsourcers you consider are willing and able to explain how they protect customer data. Any inability to do so should be considered a red flag.

Verify the Range of Services Offered

Does the company you’re considering offer all the services you want? What about other services you might anticipate needing further down the line? 

If you’re in a growth phase, it’s possible your call volume requirements might suddenly explode. Will the provider be able to adapt quickly enough to handle that kind of huge increase?

Outsourcing your call center is a big commitment. It’s important the company you choose is a good fit for your business and will be able to deliver what you need not just for the first few months, but over the long term.

Make sure to establish what their capacity is, and whether they can offer the different types of expertise you’re looking for.

Put the Right Tools in Place

Leave nothing to chance. While your outsourcer will already have their own communications equipment, it’s possible you might have specific requirements that call for special tools.

For instance, if you’re outsourcing your market research, you might prefer to use a particular analytics platform or share your CRM data directly with the outsourcer to optimize workflows. The tactical element of how this will work should form part of your research and discussions.

A Better Alternative to Call Center Outsourcing 

The reality is that outsourcing isn’t always the best choice. Luckily, there are alternatives.

Larger companies may choose to set up and operate their own, dedicated call center as a physical entity — with its own premises, staff, and equipment. Or, businesses may consider software solutions which can make it easier to incorporate call center services into their current operations.

Vonage Business Communications (VBC) is such a solution. Operating in the cloud, VBC makes it easier to connect with customers across channels, including by email and video, as well as voice calls. It’s easy to use and implement, lets you answer questions, address concerns, and build positive experiences from any internet-connected device — all while allowing you to maintain full in-house control.

It’s a useful choice for boosting productivity and delivering the kind of customer experience your valued clients deserve.

Contact an expert today to learn more about how VBC can help you meet your call center needs.

Still Have Questions About Call Center Outsourcing?

Many of the risks of outsourcing customer service have their roots in the possible disconnect between your business goals and processes, and those of the outsourcer. For one thing, it’s unlikely any outsourcer will be able to understand your business as well as your own employees do.

And since third-party agents have less of a direct stake in your success, they can sometimes be a little less motivated when it comes to delivering the kind of results you’re hoping for.

Add to that the potential for data security problems and possible inefficiencies with cross-team collaboration, and it’s easy to see why many companies may think twice before outsourcing.

It’s not exactly the same thing, but it’s related. Essentially, BPO involves any kind of business process being outsourced. So, for example, it’s not uncommon for smaller companies to outsource services like accounts management or IT support. 

Call center outsourcing is simply one of the many processes that can be outsourced, so it’s a more specific niche.

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