Welcome back to our 6-part series on how to best strategize ways of scaling your support team. In our previous post, we discussed the pros and cons of outsourcing expansion vs. organic expansion when it comes to growing your customer support team. In this article, we will discuss the true costs of organically expanding your customer service team. While expansion is typically always a good thing for companies, it does come with hidden costs. You may know for a fact that you need more customer service agents, but can you afford it?
Every company is different, and what they decide to pay their employees is entirely up to them. But, as a general idea of what others are making, the median salary for customer service agents is around $13.50/hour. The cost of hiring an agent does not fluctuate too much with experience, often resulting in a few dollar difference for those candidates. $19.00 is the 90th percentile for customer service agent salaries nationwide. If you’re hiring agents in the Greater New York Area, you can expect to shell out an extra 7% on average per agent. If you’re in San Francisco, you’re going to get nailed with a massive 19% increase, whereas Austin, Texas actually sees their average agent salaries 1% lower than the rest of the nation.
Salary, of course, is not the only cost of expanding with new agents. Are these new agents going to be full-time employees for your company, or simply independent contractors? If you decide to bring them on full time, you end up with a rather precarious teeter-totter. More full-time agents result in more coverage, but it can also lead to more idle time. If you hire too many new agents too quickly, you may end up paying for someone with no work to do.
Not to mention the possible cost of having to offer health and other benefits. Kaiser’s “2017 Employer Health Benefits Survey” found that annual group health insurance premiums for businesses with fewer than 200 employees totaled $6,486 for single coverage and $17,615 for family coverage.
Even if your new customer service agents come on as independent contractors your company will still be forced to keep accurate 1099 records. Each contractor would be paid through a series of invoices which can get cluttered and confusing if not handled properly. Not to mention, many contractors are often freelance and looking for the next best gig. A high turnover rate can hurt the consistency of your customer service team’s performance, and also bog down senior team members forced to constantly train new agents. Training programs such as Lessonly can help ease that stress, but what you save in time, comes with yet another cost.
Given that if you’re expanding your customer service team you most likely have a phone carrier or some sort of customer service software, many people do not realize the cost of simply upgrading their service. Some services, such as Aircall, charge $50 more per user monthly. Hiring five new agents with this service would result in $3,000 more overhead annually just for their phone line. Many providers, such as Talkdesk, or Five9, don’t even allow access to their pricing on their website without contacting them directly, thus leaving many managers with a dangerous guessing game when assessing and estimating the cost of hiring new agents. Popular customer service CRM software such as Zendesk, Helpscout, and Frontapp can run a business anywhere from $15 — $90 monthly for adding another user to their plan.
Don’t forget there are many positives to organic expansion as well. The first and foremost is always being in control of your staff and having them be a real part of your company. Loyalty, passion, care, and attention to detail are indispensable qualities for your customer service agents. Salesforce predicts that by 2020, 75% of customers will want to shop at companies that offer a personalized experience. That is the kind of experience you cannot get through outsourced means. It must be built from the heart in-house. So while organically growing your customer service team may have some hidden costs, the costs of not doing so could be greater.
Investing in your team, means investing in your business and creating consistently achievable goals. Creating a team that is connected and united with a particular mission, is priceless. In the next part of our series we will lay out the true cost of poor customer service.