The ultimate guide to quality outsourcing

You’re thinking about outsourcing your customer service but aren’t sure where to begin. You know that outsourcing is an option for growing your support team, but you haven’t heard great things about the industry. You want to grow your team efficiently without giving up on high-quality customer service. We get it and we are here to help.

To build this guide, we interviewed customer service directors at established technology companies and fast-growing startups. We also picked the brains of a few people who work in the outsourcing industry to get the complete picture of how to choose an outsourcing company (BPO) that can deliver on quality.

What is outsourcing? What are the benefits? What are the downsides?

A good outsourcing company should be able to tackle a part of your business more efficiently than you could internally.

Think about it in the context of building a house: you could build your own home, but it probably makes more sense to hire someone who has done it before to build it for you.

It’s more efficient to find someone who already has the knowledge and access to the best construction workers and tools. They can run the process smoothly while all you’ll need to do is move in.

Similarly, if you are thinking about outsourcing, your business is probably growing, and teams unrelated to your core value proposition need investment. 

You could build these functions in-house, but it might be a tall order given your true expertise. The effort of building the new functionality might take important resources away from the teams responsible for the core functions of your business.

For instance, if your team has historically skewed heavily towards engineering and you find yourself struggling to handle many inbound support inquiries. Support isn’t your expertise, and you might not have the time to build that knowledge.

Finding an outsourcing company allows you to pass that part of the business off to a partner. You will need to put effort into training them and sharing your vision for how that part of the business will scale, but ultimately the frontloaded work will take a lot of ongoing effort off your plate.

When it comes to customer service in particular, a good outsourcing company should be able to build you a robust model that includes: 

  • Headcount
  • training
  • management
  • tools
  • volume-based quality assurance

You will need to share your key requirements (which we’ll get into later) and volume, and a strong BPO should be able to project what it will look like to scale your support function as your business grows.

Mary, Director of Vendor Programs at a large, publicly traded e-commerce platform that has millions of users, has managed multiple BPOs over the years and has seen a lot of benefits from outsourcing:

“Outsourcing can enable your business to do things you wouldn’t otherwise be able to. We have a small team, but by working with outsourcing companies we have a huge, global footprint with a ton of capacity. 
And now, we have a portfolio of outsourcing companies so we can play to each outsourcing partner's strengths. For example, if we need 100 people really quickly, we can turn to Manila for that. If we need something more complex, we have that capability, too. 
Being ready when those needs arise is really helpful and is not something we would be able to do without outsourcing partners.”

On the flip side, she says: 

“The biggest challenge of outsourcing is the separation and distance. The agents don’t report to me, and they aren’t sitting near me. They don’t go to our company all hands meetings, so they don’t hear directly from our CEO about mission/vision/strategy. 
As a result, we’ve put a lot of intention into translating what’s going on internally to our partners. This involves building communication channels, feedback loops, and accountability systems.”

How will I know when it is time to outsource my customer service?

If any one of the five signs below apply to your business, it may be time to consider outsourcing.

Customer support is taking you away from other (more impactful) responsibilities

If you find yourself spending more resources than you expected on managing and growing a customer support team, it could be a sign that outsourcing would be a more efficient way to grow.

Consider the following scenarios:

  • Your support team gets little-to-no time to work on projects outside of the queue
  • Your team leads spend a majority of their time managing queue coverage
  • Your manager or director is bogged down in the day-to-day and unable to focus on forecasting.

None of these individuals are making the most of their valuable time, or doing the things most impactful for a support strategy. You could outsource any of these responsibilities and free up space to improve your customer experience with more meaningful, fulfilling activities.

Josh Magsam, former Director of Support at Discogs, sees this point as the biggest benefit of outsourcing.

”To do support well requires knowledge, people, tools, and resources. Outsourcing it can really help businesses tackle more fundamental tasks like product development and sales. By outsourcing, you are buying time, particularly on the management side.“

You are running out of space in the office, and/or it is increasingly hard to source new hires where you are located

Maybe you’ve built a strong in-house team that does an amazing job talking to customers and leveraging insights, but it is becoming increasingly hard to fill those roles. 

The budget you have does not allow you to hire for the caliber of people you’d like to. Your recruiting team is overburdened and doesn’t have time to do the type of outreach needed to hire the right people. 

Or maybe there physically just isn’t enough office space to house any new hires. When you get to this point, outsourcing probably makes sense. You can still keep a small, extra-knowledgeable team in-house to support experiments and manage the BPO.

Dane Barry, Head of Customer Support at Rachio (formerly Quality Assurance Manager at FCR), thinks that recruiting, hiring, and maintaining talent is the most crucial value that outsourcing companies bring.

“The primary benefit of outsourcing is recruiting and staffing. Anybody who has worked in HR knows that hiring and staffing take a huge amount of time and effort. By working with an outsourcing company, you remove that entire burden from your plate.”

You don’t have the expertise to pick the most valuable tools, workflows, or metrics

When people think about outsourcing, they often think of a large, sad, unskilled group of people sitting in cubicles answering angry customer phone calls. The truth is that a high-quality outsourcing company can handle angry customers with the best of them, but are often positioned to do far more.

A great BPO will also help you pick the right tools and workflows to scale your team efficiently and accomplish the customer experience goals you have in mind. 

Beyond that, they can help you benchmark where you are in your industry and set goals for key customer service metrics like average time to first response, CSAT, and handle time. 

A good BPO will have a point of view on systems and processes that can help your team scale efficiently, a great BPO will help you implement them.

You want to support customers in new languages and time zones

An obvious moment for outsourcing is when you realize you have customers who speak different languages or use your product while your team is offline. For example, our partner HeyGo, who needed 24/7 support but didn’t have the bandwidth to staff it

If you are a US-based company, covering 24 hours in a day can be hard, especially if you care about your team members’ quality of life. After all, working the graveyard shift can be difficult! 

Many companies find that they’d like to prioritize hiring someone who is naturally awake and working when customers are reaching out. A BPO makes it easy to find the right hires for customer service in other parts of the world.

You want to offer a new channel but don’t want to take on the risk and expenses associated with it

Let’s say you’ve been offering email and chat support, but realize you need to offer phone support, too. You’ll need to figure out the best phone system to use, how to set up an IVR system, get headsets for your team, and make sure the people you hired to do email and chat support are up for the challenge. 

Or, you could hire an outsourcing company that has the processes and people to bring it to life on your behalf.

Mary, from the large eCommerce business we mentioned above, put it this way:

“Outsourcing makes sense when you need capabilities that your company doesn’t have in-house, or need to scale up and down quickly. 
We first decided to outsource because we needed phone support, but didn’t want to set up the infrastructure for it in-house. We had an internal team focused on email support and needed a partner that already had the equipment and experience ready to go so we could quickly scale that channel.”

How can I tell if I’m talking to a good BPO?

Maybe you’ve already started this process, and have had sales calls with five or six BPOs. To you, someone new to the process, they all sound good—perhaps a few few already stand out as exceptional.

But, how do you know if they can deliver on what they’ve promised in the call? Below are four ways to tell if you are talking to an outsourcing company that can actually deliver the goods.


Talking to references is the best way to verify that anything is actually as good as it says it is. It’s no different for a high-quality BPO. If you’re looking for more validation on your decision, ask for two or three references to speak to. 

When you’re speaking with the references, try to gain insight into any pros or cons of working with your potential new BPO. Beyond that, if you know other companies working with that outsourcer that are not on the reference list, definitely check with them as well. 

If you hear different things from their existing customers than what you heard on the sales call, it’s a sign that you may need to do more due diligence to ensure that the company performs as well as they say they do.

Employee Attrition

Don’t be afraid to ask for detailed information about attrition. A BPO that is focused on quality will have voluntary attrition rates between two and four percent a month. If it’s anything more than that, you should consider asking more questions about why.

High attrition could mean employees are underpaid or the company culture isn’t great. Either one of those things will ultimately impact your customers. High attrition overall also means there will likely be turnover on your team. 

When you constantly have team members revolving through your team, the quality of service your customers receive degrades and causes additional friction in training up new team members.

Mary counts attrition as one of the most important data points to look at in the sales process:

“If you see really low attrition rates, it means people are engaged, which is a good indicator of things behind the scenes. If you see a high attrition rate, that’s not good.”

Recruiting Strategies

Digging into an outsourcing company’s recruiting strategy can teach you a lot about what it will be like to work with them. Consider asking about the following:

  • What is the profile of typical hires at their company?
  • How many years of experience do employees at different levels typically have?
  • How do they evaluate candidates’ language skills?
  • How long does it take to bring on new team members?
  • How will the outsourcing company match candidates for your specific company?
  • Can you look at writing samples and background information for candidates that will be placed on your team?
  • Can you see the assessments they use for front-line agents and managers?

A BPO’s ability to quickly hire great talent is one of the main reasons to hire one in the first place, so pay close attention to their ability to do it well and whether it aligns with how your business approaches hiring.

Meet the Team

If you get close to signing a contract, you should ask to meet the management layer that you will be working with. These are the folks you'll be meeting with on a weekly or monthly basis for reporting, performance, and training purposes.

Make sure you like and trust them. Do they seem like accountable managers that you’d actually enjoy working with? If not, pass on the company. A mismatch with management will cause a lot of headaches for you down the road, and can make for an unenjoyable work environment for anyone on the team.

A BPO is working to level up your whole team—it’s important to have values and personalities that complement each other.

Don’t stop there, though. If the management layer seems good, ask to meet with some frontline employees. They likely won’t be the exact ones assigned to your team, but it will give you a good sense of what to expect for the ones who will be.  Also, using the best-shared work calendars helps everyone stay coordinated and work together smoothly.

These are the folks that will talk to your customers day in and day out, so you should have the experience of talking to them, too. Use your conversations to gauge how you would feel about this person speaking with your customers.

Mary watches out for a couple of things during these calls:

“There’s a lot of generic customer service jargon that people can say back to you, like “Yes, we ensure quality and CSAT are important”. It's easy to say things like that, but just knowing how to run a contact center is not enough. You need to be more detailed about what you are looking for. 
Specific data points and use cases are important to dig into. For example, in a recent RFP (Request for Proposal), we were really specific about needing non-english support in these exact languages, or complex finance support. You need to get in a room with the team and ask follow-up questions.”

Outsourcing Company Size

Another thing to consider is the size of your program compared to the size of the BPO. A ten person team is likely not going to get a lot of attention at a 20,000 person company.

If you’re running a team of 20 or fewer agents, you’d be best-served by a smaller BPO (150 to 1,000 employees). There are BPOs that can get your team started with additional help as small as a single agent, or a pool of shared team members.

If you’re running a team of 21-100 agents, you could work with a large BPO, but you’ll still get more attention from a company with 500-2,500 employees (assuming they can meet your operational needs).

If you’ll be scaling to hundreds of agents in a short period of time, that is when you would want to limit your search to a large BPO with 2,500-20,000+ global employees.

Matching candidates to brands

Does the outsourcing company make an effort to match their employees to customers based on product knowledge and interest? For instance, if you are an ecommerce business, will they strive to place employees within your program that already have ecommerce experience?

Companies that do the research on your product and their employees to ensure a good match will go a long way in terms of quality of service and employee retention.

How much money can I expect to save?

The savings you can achieve by working with an outsourcing company are substantial, but the actual amount will depend on where you decide to locate your outsourced team. 

When it comes to that, there are a few options:

Onshore: When you hire a BPO to do onshore outsourcing, you hire a team of people based in the United States, usually outside of expensive metropolitan areas. 

The benefits of onshore outsourcing are accessibility to native English speakers, time zones that match a US customer base, and ease of travel to the contact center. 

The downside is that it is more expensive than nearshore or offshore options, and you will likely see little to no savings by choosing onshore outsourcing.

Nearshore: Nearshore outsourcing means working with a team that is in a nearby country. For US based companies, nearshore options are Central America (Mexico, Costa Rica, Honduras) or Canada. 

Benefits include near native-level English skills, a high degree of cultural understanding with a US customer base, ease of travel to visit the contact center, and, compared to onshore outsourcing, better pricing.

Offshore: Offshore outsourcing means hiring a team pretty far away from where you are located. For US based companies, offshore outsourcing refers to anything outside of the Americas (India and the Philippines are popular options).

Benefits include the ability to support nighttime hours in the United States (for example, 2am in Chicago is 4pm in Manila), and prices that are further reduced from onshore or nearshore options. 

The outsourcing industry has been developing in these markets for many years, so there are a lot of options when it comes to companies to work with and the availability of labor.

The savings don’t only come from hiring people in lower-cost markets, though. A big part of it is reducing the overhead and other costs associated with employing people directly, including hiring, taxes, IT, learning and development, training, and facilities. When working with a BPO, they handle all of those logistics.

Let’s break this down in a chart in terms of how much you can save by outsourcing by location:

Cost for a team of 15 (including a management layer). Does not include costs like training and QA.

Mary doesn’t see outsourcing as a cost-cutting measure, but more as a way to scale with the resources that they have:

“We keep support costs as a percentage of sales. I then allocate that budget across the organization as I see fit. 
Price is certainly a criteria when evaluating BPOs, but it's something we negotiate on after we’ve made sure they can deliver on all the things we need them to be able to do.”

I’ve heard really bad things about outsourcing from an ethics perspective. Are the rumors true?

Darnell Witt, EVP & Head of Solutions at PartnerHero, former Senior Director of Support and Community at Vimeo, says:

“The rumors you heard are true, BUT they aren’t true across the board. If you do a Google search for the world’s worst employers, call centers and outsourcing companies will be among what you find, and they are there for a reason. 
The business model of many outsourcing companies is to increase profitability by churning and burning through low-level employees and always widening the gap between what they charge customers and what they pay their employees. 
They have an incentive to pay as low as the market allows. That being said, there are plenty of outsourcing companies that have chosen a different approach. These are companies that want to build long-term relationships with their customers and employees.”

But how will you know the difference when evaluating different companies? Below are the key indicators you can use to determine if a company is treating employees well and in it for the long run or using a “churn and burn” approach. 

The good news for you is that being able to differentiate between the two will also help you determine if the vendor you are talking to can provide quality service or not.

Indicator Number 1: Employee Retention Rates

This is the second time we’ve mentioned this, and for good reason! The employees of a BPO are the number one indicator of the business’ health. You should ask each vendor that you speak to about employee retention.

Vendors should be able to provide you with a report that shows monthly and annual numbers for both voluntary and involuntary attrition. 

Again, attrition should not be above 4% monthly. You should also ask for average tenure across their different teams. If the numbers look high, that is a bad sign. Of all the indicators you can use to determine if a company is good or bad, this is the most important one.

Indicator Number 2: Current employees

When you’re conducting your reference interviews with managers and current employees, dive a bit into the ethics of the business.

Ask them how long they’ve worked at the company, what their experience has been like, and to describe their day-to-day activities. This will give you a sense of whether the company has hiring and operating standards similar to your own.

Indicator Number 3: Pricing

Pricing and how employees are treated do not always track linearly. That being said, if the companies you’re looking at all seem pretty similar, but one or two have dramatically lower pricing, that should be a red flag. 

You should ask questions to better understand how they are able to provide a quality service at that price and, specifically, if it’s at the expense of providing a living wage to frontline workers. 

In our price chart above, companies that are offering prices on the lower end or below are likely paying employees less, and you may see more burnout and attrition.

Indicator Number 4: Pay Rates & Benefits

Don’t be shy to ask the outsourcing companies you’re looking at how much they pay, what benefits they offer, and whether your agents will be employees or contractors. Contractors will provide you with invoices utilizing the contractor invoice template.

Be wary of companies that over-rely on contractors and don’t offer a solid benefits package.

Indicator Number 5: References

We spoke about references earlier—if there is one thing you do to vet an outsourcing company, it’s to speak to their references. And, the topic of employee welfare should be on your list of questions. 

What has their experience of employee turnover been? How adept are the program managers and team leads?

How should I evaluate the different outsourcing companies that I talk to?

Before you even begin talking to BPOs, you should list all the qualities that are most important to you in a partner.

Below are some questions you can ask yourself and other internal stakeholders to get a sense of what matters. 

Additional stakeholders are your marketing team, IT/Security department, and operations department.

  • What are our values? What values am I looking for in an outsourcing partner?
  • How do I want to work with the outsourcing partner? Will I be meeting with them weekly? Monthly? 
  • What tools and systems will we use to keep everyone in the loop?
  • How much will I lean on the partner to ensure quality vs. doing that in-house?
  • How much will I rely on the partner for training new agents vs. doing that in-house?
  • What technical expertise do agents working for our company need to have? How will I have an outsourcing partner guarantee this?
  • How will scheduling work?
  • If DEI (Diversity, Equity, and Inclusion) is important at our company, how will that be reflected in an outsourcing partner?
  • What level of privacy/security/confidentiality is essential to us? How can we guarantee that in a partner?
  • How does our ticket volume fluctuate throughout the year? What are the peaks and valleys? How can a partner scale up and down to meet our volume needs?
  • What languages and time zones do we need covered?
  • What other types of work do we do besides support tickets? How important is it that an outsourcing company is flexible in what it can deliver on as we grow?
  • Where do we think we’ll be as a company in 1 year? Three years? How can I be sure the outsourcing company we pick can scale to meet our needs as we grow?

Once you’ve decided on all the qualities you are looking for in a BPO, you can assign each a level of importance. Use that when speaking with potential BPOs, so you can grade them on each quality and multiply it by the assigned weight. 

If you consistently do this for each company you talk to, you will have quantitative data to help guide your decision.

What about language proficiency?

A high-quality BPO will have multiple layers of language evaluation as part of its hiring process. This is something you should ask about during the sales process.  

At an absolute minimum, every employee should take one of the three major standardized language tests (Efset, TOEFL, IELTS). These tests place people into categories based on their proficiency level. 

The categories range from A1 to C2, C2 being the highest level of proficiency. A good BPO will only hire people who rank in the C1 or C2 range. While someone in the A or B range may be somewhat proficient, they will likely struggle with a fast-paced phone or chat conversation with a customer.

In addition to the standardized tests, a good outsourcing partner will do phone screens that evaluate spoken language skills and a written portion of the application, as a final check.

Below is a list of questions you can ask to ensure you know what you’re getting when it comes to language proficiency:

  • What standardized tests do applicants take to show language proficiency?
  • On the A1-C2 range, what is your threshold for hiring?
  • What other mechanisms do you use to evaluate language proficiency?
  • Can I speak to a “typical” hire to understand their language skills?

I found a good partner, and I’m ready to move forward. What can I do to set the partnership up for success?

In finding an outsourcing company, it’s easy to overlook the preparation that needs to happen internally to set the relationship up for success. The first weeks and months are critical for the future of your new team.

Putting in some extra work in the beginning will pay huge dividends as time goes on. But what does this mean?

Here’s what Mary has to say:

“Try thinking about it from their perspective. Do they have the resources they need? Were they adequately trained? Do they have access to the permissions necessary to take action on the backend?
It can be difficult when you are 10+ years into building a company and the tools have been built up over time for an internal team. These tools and systems may not be made for an outsourced agent. 
It depends where you are in the lifecycle of the company, but most companies probably need to go back and figure out how to make their systems simpler and more streamlined to optimize for an outsourcing company." 

First, make a list of all the types of tickets and workflows you are asking your outsourcing partner to take on. Evaluate your training materials for these processes.

  • Are they up to date? Are they clear? Are they engaging? 
  • Is there a test component to make sure agents have understood the material?
  • Does the training include how to handle edge cases and how to escalate issues that come up? 

If the answer to any of these questions is no, you have two options:

1) Update your training to make sure the answer to all the questions is yes

2) Any good outsourcing will have dedicated training resources that you can work with to ensure your trainings are ready for prime-time

The worst option is to share inadequate training with your new team, which will lead to disappointment and more work in the long run.

To make sure agents are ready, Dane from Rachio likes to do mock phone calls and tickets. 

“The best way to test if an agent is ready is through mock support interactions. You can also set up quizzes as part of training, so you can quiz and make sure they understand material they were trained on.
A lot of your success is dependent on how much you put into it. Make sure you are always engaged, and that there’s plenty of face-to-face (or Zoom) interaction. 
It's so important that you treat your new partner like a partner. Make sure you are incorporating them into your internal structure. The last thing you want is to create a silo.”

What should I expect in the first week, month, six months of working with an outsourcing partner?

Josh Magsam, former VP of Customer Success at Discogs, has a lot of experience ramping up new partners. 

“The first week should feel like you are bringing a lot of people into your own office for their first week. You should be joined at the hip. 
The managers from the outsourcing company should be getting to know your process and they should be asking a lot of questions. They should be running through training. There should be a lot of interaction and communication.
The first month should be an extension of the first week, though you will see the team beginning to handle a lot more. By the end of the first month, you won’t be at full capacity, but you should see it trending toward 70% of full capacity. That trend will continue.”

At the end of the first year you should be able to answer many questions about the program's success. It should feel like you are doing an annual review with any department within your company. 

Questions like, “How well did we ramp up? Did we hit our target KPIs? Did we stick to the budget? What was the employee retention rate?” should be answered, helping you plan for the following year.

Dane from Rachio echos Josh’s thoughts on the importance of the first few weeks: 

“The first month should be very hands-on, very interactive between you, your internal team, and the BPO. Put as much effort and energy into the first month as you can, it will make a big difference down the road.”

What if things aren’t going well? How do you deal with disciplinary issues?

Dane emphasizes how important it is for your outsourcing team to feel like an extension of your internal team: 

“I’ll go back to how important it is to treat your partner like the member of your team that they are. If there are performance issues, it’s important to coach and develop through the problems. 
When performance is not where you want it to be, typically it's the result of a knowledge gap, so understanding the root cause is the first step.”

Mary takes a scientific approach to evaluating BPO partner performance:

“We have a monthly scorecard, which is basically all the KPIs outlined in the contract. For each KPI, we give it a “green,” “yellow”, or “red” score, with the expectation that a certain percentage will be green every month. These metrics keep us grounded and get discussed at monthly business reviews.”

Hopefully, you’ve picked a BPO that has strong leadership and that you have a regular communication cadence with. 

With these two elements in place, it should be easy to bring up any issues as they arise and make a plan for how to tackle them, including dismissing people who turn out not to be a good fit for your team.

Not all BPOs are created equal

There are BPOs of all shapes and sizes out there. To find the right one for you, look for a company that can thoroughly and honestly answer all the questions you think are most important. Investigate their references, their retention rates, and their training + quality programs. 

Find a partner whose leadership you genuinely enjoy meeting with because you’ll spend a fair amount of time talking to them. Most importantly, find an outsourcing company whose values align with yours. When you find that, you’ll see better outcomes from day one.