Call Center Philippines: The hourly cost breakdown

Published December 18, 2021, 4:33 AM

by MB Technews

For years, call center outsourcing to the Philippines has been an excellent way to improve operational efficiency, reduce costs, and increase ROI. Unfortunately, many SMEs that are looking to outsource to the Philippines for the first time take price into account as the primary consideration. “This can turn out to be a costly mistake in the long run. Knowing the hourly cost breakdown of a call center in the Philippines is critical to gaining a full understanding of the many factors and the true costs involved in outsourcing this important business function,” says Ralf Ellspermann, CEO of PITON-Global, an award-winning, mid-sized call center in the Philippines.

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Many vendors will offer extremely low pricing on the front end, and that can be hard to resist. However, these low-cost vendors are competing only on price, not quality. They are often forced to make significant compromises—not just on one but on all levels—and that impacts the service quality and program performance. With hundreds of call centers in the Philippines, it’s imperative to choose a premium provider with experience and expertise in delivering consistently high quality.

The hourly rate breakdown is one of the most overlooked factors when outsourcing support services to call centers in the Philippines. However, this critical piece of information can help you make the right decision on which vendor to work with, saving you time and money in the long run. The hourly cost typically breaks down as follows: agent compensation (30 percent), management (15 percent), support (10 percent), facilities, infrastructure, and technology (10 percent), bandwidth and telco (5 percent), and vendor margin (30 percent).

Consider a scenario where an outsourcing service buyer is comparing two vendors: a low-cost provider and a premium provider. The average hourly price for a low-cost vendor breaks down to US$6 to 8 per hour. For a premium call center in the Philippines, the average hourly rate is US$12 to14. On the surface, a low-cost provider is an attractive option until you dig a bit deeper.

Most importantly, a premium vendor’s workforce compensation is almost double that of a low-cost provider. This, of course, attracts the most qualified agents in the country, those with superior experience, skill level, and English proficiency. The same holds true for the differences in quality of management between a premium and a low-cost provider.

“A higher hourly rate also means a call center can make investments in support resources such as IT. It allows them to utilize the latest contact center technologies (including hardware and software) and invest in quality infrastructure and state-of-the-art facilities. All these elements increase operating efficiencies, reduce downtime, and enhance the customer experience. They’re also contributing factors in attracting a top-quality, motivated workforce,” says Ellspermann.

A call center in the Philippines that charges US$12 to 14 per hour might make a bit more money than a low-cost vendor offering a US$6 to 8 per hour rate, but it is able to reinvest those profits into all other parts of the business. A low-cost contact center simply cannot afford to make the kinds of investments in their programs as a premium provider can. This directly correlates to (and ultimately impacts) the service quality and the overall program performance. Even at a rate of US$12 to 14 per hour, clients are still able to save 40 to 50 percent over standard onshore vendor rates.

“At the heart of any well-planned and executed offshore outsourcing strategy is excellent customer experience. When outsourcing call center functions to the Philippines, the cost savings will be there, regardless of whether it’s a low-cost provider or premium vendor. The more important question is, what will be the overall quality of the program? No matter how much a buyer saves by going the low-cost route, if quality service is not delivered as promised, there will never be a positive return on the investment,” explains Ellspermann.

Knowing how the hourly cost of a call center in the Philippines breaks down is the first step in understanding how critical it is to partner with the right vendor. Considering the time, resources, and monetary investments made in contact center outsourcing to the Philippines, it’s easy to see that premium providers deliver significantly more value over time than low-cost vendors.

 
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