When Outsourcing Makes Sense

Figuring out if outsourcing a customer contact center is right for an organization is not easy. “You would think as you grow, it makes sense to outsource for economies of scale,” says Johnny C. Taylor Jr., SPHR, author of The Trouble with HR (AMACOM, 2009). “But if you get really large, like an airline, then it may make more sense to have multiple locations and manage it yourself. So, there’s no formula.”

When Taylor served as vice president of legal services at Alamo Rent-A-Car, the company considered outsourcing customer contact. He identifies the following workforce-related advantages:

Workforce flexibility. “We could expand and contract without all the legal ramifications,” Taylor says. “We also don’t have to worry about unionization.”

No downtime. Headquartered in Florida, “We had to consider the real likelihood of hurricanes displacing employees and shutting down our call center,” says Taylor. “A vendor could provide service around-the-clock.”

Performance oversight. Outsourcing permits HR professionals to dictate processes and metrics in a contract without the burden of implementation. “You would say to the outsourcer, ‘I want this level of training, and I want this level of complaints and this level of customer satisfaction scores,’ and it’s up to the outsourcer,” he says.

Larger labor pool. Providers have multiple locations and home-based agents. Jared Fletcher, vice president of strategic sourcing at Arise Virtual Solutions Inc. in Miramar, Fla., recruits agents in 50 states who work virtually from their homes. He helps “clients cover the less desirable graveyard shifts at a lower cost to them and also contract and expand due to seasonal needs or with demand,” he says.

Minimized legal risk. Transferring liability to the vendor is another advantage. “Draft the contract and operate it so you are never considered a co-employer,” advises Taylor. “If you go through all of this decision-making and vetting, and, at the end of the day, an employee complaint can be made against your company, then it’s all for naught.”

In the end, Alamo chose not to outsource for financial reasons, according to Taylor.