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The True Cost Of Organically Expanding Your Customer Service Team

August 28, 2020
While growing organically is a great sign for a company, there are many expenses beyond salary you’ll need to consider.

Organically expanding a customer support team means to hire internally without the use of an outsourcing service. While onboarding new agents to provide excellent customer service is typically a positive step for companies, it does come with hidden costs. You may know for a fact that you need more customer support agents to solve your customers' needs, but you may not know if you can actually afford it.


Every company is different, and what they decide to pay their support team to handle customer needs 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, according to top search results on Google.

The cost of hiring an agent to support your customer base does not fluctuate too much with experience, often resulting in a few dollar difference for those candidates. The 90th percentile for customer service agent salaries nationwide is $19/hour. If you’re onboarding agents in the Greater New York Area, you can expect to shell out an extra 7% on average per agent. If you consider different time zones- for example, San Francisco- you’re going to get nailed with a massive 19% increase, whereas in Austin, Texas, average agent salaries are 1% lower than the rest of the nation.

All and all, the cost of your customer service department and the resulting customer feedback depends on the quality of your agents' work in solving customer issues. This requires that your agents receive thorough training in:

To ensure they can achieve optimal customer satisfaction, you might also need to train them to:

Employment Type

Salary, of course, is not the only cost of expanding with new agents to help customers. 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 support requests 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. A follow up on Kaiser's "2017 Employer Health Benefits Survey" showed 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–that's their lifecycle. A high turnover rate can hurt the consistency of your overall customer success 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 you're expanding your customer service team, you likely have a phone carrier or similar customer service software. Many do not realize the cost of simply upgrading their service in various support channels to improve their customer service strategy and overall customer experience. 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 pricing on their website without contacting them directly, leaving many managers with a dangerous guessing game when assessing the cost of hiring new agents. Popular customer service CRM software such as Zendesk, Helpscout, and Frontapp can charge anywhere from $15 - $90 monthly for adding another user to their plan.

The Good News

Don’t forget there are many positives to organic expansion as well. You will be able to directly manage your staff to ensure they provide great customer service. You can instill in them loyalty, passion, care, and attention to detail to ensure your top-notch agents are invested in improving customer relationships, keeping churn rates low, and increasing your NPS.  

Salesforce predicts that by 2020, 75% of customers will want to shop at companies that offer a more personalized customer experience. If you value customer acquisition and customer retention, you might not receive this level of service through outsourced agents or simplistic chatbots. It must be built from the heart in-house. The bottom line is, while organically growing your customer service team with new hires may have some hidden costs, the costs of not doing so could be greater.

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