As you (should) know by now, web hosting is an extremely competitive industry. New companies are created daily, and old companies continue to get bigger, stronger and meaner.

 

To compete on price, small companies are looking at their costs and trying to find ways to cut them. Chances are, their staff is fairly high up on their list of costs and the easiest way to cut costs is to outsource a good amount, if not all, of the staff.

 

Bigger companies see outsourcing as a viable solution for saving money. Employees in the US, UK, Canada, etc. are very expensive to compared to employees in India, Malaysia, the Philippines and other countries that have significant populations of English-speaking people in the workforce.

 

The cost differences are significant. An average customer service representative in the United States makes $10, $15 or more per hour. In India you can find someone willing to work for $3 per hour; for $10 or $15 per hour, you can afford the very top percentage of the workforce.

 

Is it possible to effectively outsource your customer service and support operations without jeopardizing the quality of your service?

 

Options

Most companies choosing to outsource their customer service have a few options, each with its own pros and cons:

 

• Cut costs at home.
  This means hiring cheaper employees based in the company’s home country. Cutting the average customer service representative pay from $15 per hour to $7 per hour can make a big difference in A) who applies to your company and B) who stays with your company.
  Pros: Retain employees who likely speak English as a first language and don’t have a foreign accent, are familiar with local culture, are more familiar with company policies and other staff members and are generally more involved with the company than the average outsourced employee.
  Cons: Existing staff members may leave if wages are cut, which means more training will be required, workplace morale may drop and it will be harder to recruit new qualified staff members at the  lower wage.
  
  

• Go with an outsourcing company.
  Another popular option for web hosts is to go with an outsourcing company that specializes in staffing hosting companies. These companies–like Bob Cares, Touch Support and Support Resort–are paid a monthly fee by the web host and provide staff members to the company for set hours.

Pros: Employeesusually know what they’re doing and are reliable. In many cases, this option is cheaper than cutting costs at home.
Cons:Some disadvantages can include language barriers, cultural barriers, your customers are unlikely to deal with the same person every day, you may have to train employees on specific company policies and procedures and your outsourced employees are less likely to be involved with the company

• Hire someone in another country.
  The third option is to hire an employee in another country. This is the most logistically complicated of the three since it often involves working with tax and employment laws among other things; but when it works out, it is usually the most efficient. Finding a reliable employee can often be hard, but if you can find the right person, it’s worth the effort.

Pros: These employees are likely to be motivated, they can be trained to company-specific procedures and policies, they are affordable and have the potential to be as involved as other employees.
Cons: Due to the distance, these employees can sometimes be unreliable, it will be harder to ensure worker efficiency (as in not sleeping at desk, etc.) and the entire situation is often more complicated (logistically).

 

The only way to tell which option is right for your company is to look at your company and its needs. Like a lot of questions, this can be answered with a who, what, why, where, when and how questionnaire.

 

§         Who do you want to hire or fire? Are you prepared to fire existing employees and replace them with contracted employees or employees in another country? Do you want to replace system administrators or customer service representatives? The different jobs make a difference. It’s much easier to outsource a job that has little to no customer contact than a job that has a lot.

§         What are your requirements? Do you simply need someone to respond to things like site-down problems, monitor servers proactively, etc.? Should the person be able to respond to sales requests or just technical support? What is your budget?

§         Why are you outsourcing? Are you outsourcing to cut costs to compete or to increase margins? Is outsourcing necessary for your company’s survival?

§         Where are you looking to outsource employees from? A slightly cheaper country (some parts of Canada are slightly cheaper than the US, some parts of the US are cheaper than others) or one significantly different from the U.S., like India or Malaysia?

§         When are you need to have this change take place? Do you have a few months to find someone or do you want to get started tomorrow?

§         How do want to interact with your employees? Do you want to just send a check and be done with it or do you want to work with someone and familiarize them with the company and internal policies?

 

Once you answer these questions, you should be able to determine which option is best for you. Once you’ve determined the options, here’s what you should do according to each option:

 

§         Cut costs at home
Talk to your employees and tell them why you are cutting costs and that their pay has to be cut because of it. Explain fully and honestly and offer them sufficient time to find another job (and if possible, help them). Be prepared to start looking for some new employees, as chances are not everyone will be able to (or want to) stay. Also, do not expect any sympathy if you just wish to increase profit margins.

§         Go with an outsourcing company
Research! And research extensively. Find out which outsourcing company best fits your budget and your needs. Then research them: learn their reputation, give them a trial run and do whatever else you can to determine if they’ll be right for you and your customers.  

§         Hire someone in another country.
Start recruiting. Be sure to do a few interviews, have other key team members talk to the potential employee and check up on references. Don’t hesitate to ask the employee to work on a trial basis for a month or two (paid) to prove his or her skills and qualifications. Don’t hesitate to hire a system administrator (just ask a few) to test the person’s knowledge and skills. If you do your homework, it should work out.

 

It’s very hard to outsource without decreasing customer satisfaction levels. However, if you do your homework and are prepared to invest some time and money, you’ll minimize the damage to your reputation and ensure that your customers don’t notice much of a quality difference, if any.

Best of luck!

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