Businesses face an important decision when it comes to managing their customer service: should they keep their call center operations in-house (insourcing), or should they hand them off to an external provider (outsourcing)?
Each model has its pros and cons, the right choice depends on a company’s size, resources, and priorities. Let’s take a closer look.
What Is Insourcing?
Insourcing means handling all call center operations internally. This gives the company full control over how customer interactions are managed and allows for close coordination between teams..
Key Benefits of Insourcing:
- Direct communication between departments for faster decision-making
- Faster knowledge sharing among internal staff
- Closer connection to brand culture and customer tone
However, setting up an internal call center requires a significant investment in both people and infrastructure. It may mean hiring new staff, providing ongoing training, and investing in the right technology.
What Is Outsourcing?
Outsourcing involves hiring an external provider, a BPO (Business Process Outsourcing) company to handle customer service operations. This is often a smart option for companies that want to maintain service quality without the burden of internal staffing.
Key Benefits of Outsourcing:
- Access to trained professionals with expertise in customer relations
- Lower internal overhead (no need to hire or manage large teams)
- Scalability for handling high call volumes or peak seasons
- Round-the-clock service across time zones
Outsourced call centers are often equipped with the latest tools, industry-standard practices, and multilingual support, making them a strong partner for businesses with international customers.
Outsourcing And Insourcing – Which One?
Does the company want to offer its customers a competent service while keeping the management under control? In this case, complementarity between outsourcing and insourcing is the best solution. In this way, the company can outsource part of the management of incoming calls and keep the most critical and valuable things in-house. Another form of this partial outsourcing is to use a service provider when the volume of calls exceeds the internal management capacity.
There are many possibilities. The company’s task is to choose the best solution that suits its needs, without forgetting that customer satisfaction and relationship are the most important. Nevertheless, the increase in hourly wages is taking a toll on call centers and BPO contractors. They can only afford to pay workers a limited salary because many customers expect competitive costs.
BPOs have had to raise their prices for their clients. The reason is higher fees for supervisors, program management, exit training, cost of living changes, etc.
Cost Considerations
Outsourcing is often seen as a cost-saving option, but this depends on the provider’s pricing structure and the company’s expectations.
For example, if a service provider pays agents more than $15/hour, the service rate for outsourcing needs to exceed $32/hour to remain profitable. This accounts for overheads like:
- Program management
- Team supervision
- Training and onboarding
- Inflation and cost-of-living adjustments
As wage expectations rise globally, some BPOs are increasing their rates to maintain service quality a trend businesses must consider when comparing options.
Hybrid Models: The Best of Both Worlds?
What if you don’t have to choose one or the other?
Many companies now adopt a hybrid model, where critical or high-value customer interactions are handled internally, while overflow or routine queries are outsourced. This approach:
- Helps manage call surges or seasonal peaks
- Keeps strategic tasks in-house
- Allows for flexibility and scalability without full reliance on one method
The Changing Workplace & the Rise of Outsourcing
According to a Harvard Business School study, 81% of workers now prefer remote or hybrid work models. Many still cite health concerns, flexibility, and work-life balance as top priorities. This has shifted how companies view internal staffing — and has made outsourcing an even more attractive option.
Outsourcing gives companies access to remote-ready teams without the burden of HR management or office infrastructure.
To Summarize: Which One Should You Choose?
Ultimately, there’s no one-size-fits-all solution. The right choice depends on:
- Your company’s budget and internal capacity
- The complexity of customer interactions
- Your scalability needs
- And most importantly, your commitment to customer satisfaction
Whether you lean toward outsourcing, insourcing, or a hybrid model, the key is to focus on what supports your goals and ensures the best experience for your customers.
Check out our blog on virtual assistants for another look at outsourcing in action or reach out to Katrium to discuss how we can support your business with tailored customer service solutions.
Book a meeting with our CEO to explore your ideal setup.
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