The cost of outsourcing depends on the type of service you need. Here are some typical costs for BPO services:
- HR services: $45 to $1,500 per month
- Information technology (IT) services: $110 to $160 per user, per month
- Onshore call center: $25 to $65 per hour, per rep
Just as with car insurance, what a business process service costs varies widely from customer to customer, so there’s no one answer that fits all. There’s a huge array of BPO services that range from extremely skilled professionals to call center agents who are trained to talk to your current and potential customers. What hours do you need help? Full-time, part-time? How many people will you need? Do you want inbound and outbound services?
There are plenty of reasons why a business owner would want to work with a business process outsourcing (BPO) company. Perhaps you’re having trouble finding the right hire in your local area. Maybe you want to ease your employees’ workload to avoid burnout. But the most compelling reason to outsource is simple and straightforward: outsourcing saves money.
However, “saves money” isn’t quite the same as “free.” In this article, we’ll go over how much a business owner can expect to pay for outsourcing — and how much money you can expect to save.
How is Business Process Outsourcing Priced?
There are a number of factors that determine the price of an outsourcing service, including:
- The type of service you need. Different outsourcing services have their own pricing models and average prices. The three most popular types of outsourcing services are human resources (HR), information technology (IT), and call centers.
- How much service you need. When you work with an outsourcing company, one of the first things they’ll want to know is how much you plan to use their service. Less expensive service options allow you to get the BPO services you need at the best possible price. Some outsourcing companies also offer premium services that include 24/7 support, a dedicated person to work with you, custom-trained call center reps to boost sales, or included hours for consulting and troubleshooting beyond the scope of normal services.
- The number of employees in your business. Some services, especially IT and software services, charge by the total number of employees in your business. This is especially common for payroll processing services, which charge a “per-check” or “per-employee” fee for each payroll period. For software such as payroll portals, customer relationship management (CRM) platforms, or call tracking software, you may only need to pay for the number of employees who actually use the service.
- The amount of your payroll. Some HR outsourcing companies charge a percentage fee of your total payroll. This is because certain services such as benefits and worker’s compensation are calculated and taxed based on salary.
How much does Human Resources Outsourcing Cost?
HR outsourcing has the widest range of potential costs. Let’s explore the reasons for this as well as what kinds of HR outsourcing services are available.
HR services are among the most commonly outsourced BPO services. HR outsourcing companies also provide the biggest variety of options, which is one reason why HR services have such a wide range of prices. An HR outsourcing company can provide services for a number of important business processes. Let’s take a look at 4 of the most commonly outsourced HR procedures.
1. BPO Shines at Recruiting Employees
As any successful business owner knows, hiring new employees can be the most stressful and costly part of running a business. Not only does it cost money to advertise job positions and go through onboarding and training, but there’s always the risk that hiring the wrong person will cost even more time and resources. That’s where recruitment services come in.
HR recruitment services handle applicant screening, candidate selection, and interview scheduling. Once you make a hiring decision, the HR outsourcing company can also take care of the onboarding paperwork and initial training.
Recruitment services usually cost between 40% and 50% of the employee’s salary.
2. Training New Employees is a BPO Function
Organizational training doesn’t stop after onboarding. Your employees need to keep up with annual training requirements, not to mention any new training needs that come up as your business grows and expands. At the same time, it takes time and money to set up effective training, from finding the right instructor and materials to keeping close track of everyone’s progress.
When an HR outsourcing company manages training for your business, you can expect significant cost savings compared to hiring a trainer yourself.
3. Business Compliance Can Be Managed with a BPO
Unless you’re trained as an HR professional or labor attorney, it isn’t easy to navigate the many local, state, and federal labor regulations that apply to your business. If you don’t know exactly what you’re doing, your business risks steep fines and penalties for unknowingly breaking labor laws. This is why all business owners need to take labor compliance seriously.
That said, how many small business owners can afford to pay $200,000 a year for a full-time compliance specialist? The good news is that compliance, while important, doesn’t have to cost hundreds of thousands of dollars. By working with an HR outsourcing company, you can save over 95% in compliance costs.
4. BPO HR Can Handle Benefits and Payroll
When most business owners think of HR outsourcing, they think of managing benefits and payroll. HR outsourcing companies can take care of complicated payroll processes, like managing health insurance as well as handling payroll taxes and other compliance matters.
Typically, HR outsourcing companies will charge about $250 per employee for administering payroll and handling payroll compliance. For a company with 10 employees, this is still far less expensive than directly hiring an experienced payroll specialist.
How Does Outsourcing Reduce Costs?
While outsourcing services do have their own costs, the reality is that they’ll save your business money and even create leadership and motivation in the workplace. This is because working with a BPO company is less expensive than directly hiring a professional. Here are a few examples of the additional time and costs involved in hiring someone:
- Recruitment and job advertisement costs
- Time to vet applications, conduct interviews, and negotiate job offers
- Time to manage and develop the employee throughout the year
- Onboarding and initial training
- Sick time, vacation, and other personal time off
- Cost of hiring a temporary employee if your main employee is taking time off
- Ongoing training and skills development
- Cost of restarting the process if the employee leaves the company
Compared to the cost of working with a BPO company, hiring a full-time professional is almost always the more expensive option.
Cut Costs and Boost Service with Business Process Outsourcing Today
The great thing about outsourcing is that it’s not a compromise at all, but rather an improvement for your business. By paying less money, your company has access to dedicated, high-quality professionals in compliance, labor law, accounting, IT, training, and much more. At Confie, our BPO service helps business owners get the best services at an affordable price. To learn more, get in touch with us today or give us a call at (714) 252-2500.