Demand is on the rise: More and more companies want to outsource, but almost every second venture fails, warns Jürgen Thom of Snubes in a guest article.
Decisions are not made on the basis of data and facts, but based on a snapshot. The biggest problem lies in the selection of a suitable service provider. Often the data basis on which decisions are finally made is extraordinarily small. But it is precisely this data that is crucial. The more information a company has, the better outsourcing decisions can be made. The three most important factors of a successful cooperation with a call center are price, quality and capacity. Ultimately, the customer’s goal in outsourcing is to reduce costs, improve the quality of a service, and solve capacity issues.
Current market pushes prices up
In 2022, the lowest price per minute measured in the market was €0.53. Nearshore and offshore also saw a significant increase in prices. In the nearshore EU, the average price per minute rose from €0.39 to €0.43. This was also due to centralization. In proven locations, additional call centers opened up within a very short time. Ultimately, however, there is only one regional pool of employees to which all call centers have access, so competition for the best employees was quickly sparked. Resources, especially with language and writing skills at C1/C2 level, are limited. This has led to correspondingly higher wages, which are passed on to customers.
The energy crisis is also affecting other European countries. Inflation is impacting economies and industries across Europe. In addition to general prices, industry-specific prices as well as accepted pricing models have naturally adapted to the situation. In principle, outsourcing to other European countries makes it possible to reduce prices by up to 38 percent compared to Germany. Thus, this model will remain very interesting in the future. However, in this context, quality assurance is important.
Quality assurance thanks to high-quality onboarding
Many companies still use Excel spreadsheets for quality assurance, which makes it very time-consuming to summarize the results. Partial digitization and inadequate QM strategies guarantee little success. When deficits are identified in employees, it sometimes takes weeks to achieve a result due to the manual process. The respective work models (in the call center, home office or hybrid as a mixture of the two models) can further intensify this effect. Due to Corona, the share of the pure home office model was 67 percent in 2020. This has decreased to 31 percent in 2022, while hybrid work models have increased to 30 percent in parallel. Pure on-site work in the call center accounts for 39 percent.
If we now analyze customer satisfaction with regard to service quality in more detail depending on the work model, it is striking that service quality is highest for on-site models, followed by hybrid work models. The service quality of home office models is currently rated lowest. This is due, among other things, to a lack of concepts and practice for employee management in the home office. Training concepts are often based on classroom instruction. Some of the existing onboarding concepts are not yet fully developed, which in turn leads to early employee turnover.
Capacity remains the biggest challenge
In Germany, we currently have 10,000 unfilled customer service positions, 3,000 of which are in home offices alone. Despite high starting bonuses, 83 percent of HR experts have difficulty recruiting. The capacity issue is transnational, as the relocation of customer support to popular European locations has exacerbated the issue. What stands out, however, is that we currently see significant differences in capacity between large and mid-sized call centers.
In 2022, we examined how the issue relates to the company size of the call center and who is specifically affected. Interestingly, we found that 34 percent of medium-sized call centers (50 to 500 employees) still have excess capacity available, while 92 percent of large call centers (>500 employees) suffer from significant undercapacity. For both undercapacity and overcapacity call centers, the effect is severe, as corresponding revenues are not being generated. Call centers achieve up to 20 percent less annual revenue due to a lack of ability to respond flexibly to order adjustments.
Capacity will certainly be one of the major challenges for 2023, along with price and quality. Looking ahead to the coming year, we need to develop new solution concepts to guarantee successful outsourcing. As Aristotle once said: We cannot change the wind, but we can set the sails differently.
Founder & Co-CEO Snubes GmbH