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Home | Blog | Call Center Cost Breakdown: What Are You Paying For?

Call Center Cost Breakdown: What Are You Paying For?

By Magellan Solutions

Updated on June 3, 2024

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Call Center Cost Breakdown: What Are You Spending For?

Call center services are essential for most organizations. They help companies cut workforce budgets. However, before partnering with a BPO company, many factors must be considered.

One essential thing to check before deciding is the cost of call center services. Between in-house and outsourcing, outsourcing is more affordable. Considering everything you need to know about call center outsourcing, it would be best.

The first step for a business needing a call center is to decide whether to have an in-house team or outsource it. An essential factor to check before deciding is the call center cost breakdown.

Why Pay for a Call Center Service?

As stated, call centers are an essential part of every firm. 61% of customers nowadays still prefer a phone answering service with a call center agent, even if there are other channels for call center support. Next would be the delayed response emails with 60% and live chat support with 57%.

However, many customers prefer an online call if a traditional phone call is unavailable. This proves customers still prefer to interact through calls despite companies having omnichannel call center services.

With that in mind, customers prefer talking to a live agent. They feel secure having a natural person assisting with their concerns.


Call Center Cost Breakdown Inclusion

The computation for the cost of call center services differs by company. Here are some factors that affect the call center cost structure.

  • Number of Seats
  • Expertise of Agents
  • Current Labor Market Rate
  • Length of Contract
  • Call Volume

As mentioned, these factors are not present in every company. Some companies may only consider the number of seats. Others may combine the call volume and current labor market for the computation.

Let us take a closer look at each factor:

Number of Seats

This is one of the most vital factors in the cost of a call center. By determining the number of seats, you can also identify how many agents to work with.

In some instances, the company has a local counterpart. In that case, they only need to lease a space and seats for their agents. These leased seats come with workstations, computers, and the internet.

Other BPO companies offer seat leases that can provide complete IT support for the team. These include dialers, VOIP, and call center platforms.

Expertise of Agents

Like in any other field, the more experienced and skilled the person is the higher the rate. Whether the agent is new or has been in the area for years, they will all undergo thorough training.

Different countries have different outsourcing expertise. In India, their best service is tech support. They have the best agents in the IT department to support your business.

However, the Philippines is not far behind in tech support services. Aside from that, it has a world-class customer service industry, which is why it is the world’s call center capital.

Current Labor Market Rate

The labor rate changes from time to time as there are movements in supply and demand. Expect higher rates if there is a high demand for agents and the pool is low. The rates will also be lower if the store is high and the market is low.

Outsourcing to countries where call centers are in demand will be wise for your business. The competition is tight for all BPO companies. Thus, they will make every move to lower the price of their service.

In the Philippines, BPO is the most in-demand job. BPO employees comprise 14% of the total Filipino workforce. The Philippine call center industry will continue to grow. In 2022, there will be an additional 700,000 Filipino call center agents.

Length of Contract 

The length of the contract also affects the price. Pricing will depend on the negotiation between the client and the BPO company. However, contract negotiations can be a problem.

Most of the time, clients want the lowest possible price with the highest quality service. However, other parties want to gain as much profit as possible with minimal effort. Therefore, each party should explicitly state its expectations.

There are a lot of companies that offer a lower cost for companies that want to have more extended contracts. These work for both big corporations and SMEs. More extended warranties are beneficial if you are planning to expand your business.

Call Volume

The volume of calls needed by the company will also alter the price of the service. This will affect the number of agents required for the operation.

The average handling time (AHT) is also a factor, as are add-ons and many more. These will depend on the client’s demand. Furthermore, the price will change if they want to add a specific process to their service.

Some companies don’t know their target AHT. Several BPO companies in the Philippines can help you set your AHT.

Call Center Breakdown Per Campaign

Aside from the inclusions, the cost of call center services varies per campaign. There is no definite call center cost structure. However, let us look at the typical breakdown of the expenses per contact center campaign.

Call Center Cost Breakdown for Inbound Services

The call center outsourcing costs consist of a lot of essential factors. Let us check the differences between shared and dedicated inbound call center services.

Shared vs. Dedicated Call Center

Each company has a different business model. Knowing what model suits your operation can help with business development.

For more prominent companies that expect a large call volume, it would be best to use a dedicated call center. Agents in a reliable call center are trained solely for your services. A true call center is perfect if you want your agents to focus on your products and services.

On the other hand, shared agents are perfect for mid-sized businesses. A shared call center means agents can answer calls from multiple clients, making it ideal for SMEs with low to medium call volumes.

Rates and Type of Payment 

Both models compute the rate for the call center service differently. However, both models base their computation on the duration of the service.

In shared service, the clients only pay for the time per minute. The average cost is between $0.35-$0.45 per minute at low-cost international agencies. On the other hand, the rate for the USA and Canada is $0.75-$0.90.

The price for a dedicated call center depends on the number of hours. The rates in offshore companies are around $8-$15. At the same time, the rates in the USA and Canada are around $22-$28.


Call Center Cost Breakdown for Outbound Services

Call center outsourcing costs are different from those of outbound service. The computation depends on the business type. Additionally, each outbound campaign has other difficulties.

Let us look at some factors that affect outbound call center costs.

Rates per business preference

Businesses have different preferences for rates based on their business model. Hourly rates for outbound pricing models are the most common. This is applicable for lead generation and appointment setting.

The second type of outbound rate is pay-per-performance. This is not ideal for many outbound call centers. The pay-per-performance rate forces agents to reach a quota, thus sacrificing the quality of service.

The third type is the combination of hourly and pay-per-performance rates. Clients and BPO companies use this type of service to reach a quota while maintaining the quality of the service.

Computation of Rates 

Aside from the campaign and contract size, the hourly rate differs with the location. The rates range in India and the Philippines from $6-$10 per hour. Meanwhile, in Eastern Europe and Latin America, the price is $9-$14 per hour. Furthermore, Western countries charge $22-$32. 

Meanwhile, the pay-per-performance pricing structure depends on the situation. The client should provide the outsourced call center a 10% to 20% premium for the extra risk.

The third type varies depending on the contract negotiation. Most of the time, the hourly rate is the average salary for the provider. At the same time, the pay-per-performance serves as the incentive. Incentives are for dedicated agents who can maintain the quality of their service.

Magellan-Solutions Can Help You Calculate Your Call Center Costs

Calculating your call center costs can be tricky. This is evident, especially for start-up businesses. However, Magellan-Solutions is here to assist you with your outsourcing needs.

We help SMEs reach their target in outbound and inbound call centers. Our services include:

Magellan-Solutions has implementation managers to help you get your key performance indicator (KPI). They can also assist you in expanding your business.

Contact us today for a 60-minute consultation at zero charge.

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