The Pros and Cons of Outsourcing & In-House Customer Service: Which Side Are You On?


June 15, 2021

Written by

Merlene Leano

Businesses these days are increasingly divided by the timeless argument of whether a company should stick with the typical onboarding process of in-house employees or resort to hiring an outsourcing agency to handle customer assistance and after-sales services.

Regardless of how we scale it, it is difficult to come up with a definite answer.

There are several aspects that you need to consider before reaching a decision on whether to stick with an in-company team or try a different setup through delegating end-user assistance tasks to an external staff. First, you must have a prior understanding of how outsourcing really works, and what makes it different from working with an in-house team. Another thing you can do is compare the advantages of outsourcing customer service and the specific benefits of in-house customer service to know which of the two suits the structure and requirements of your business best.

Does this context still boggle you? This article might come in handy! Here, the differences, pros, and cons of working with an office-based team of customer support representatives will be compared with that of joining forces with an externally redistributed help desk team, will all be discussed.

To start off, here’s a brief definition of customer service.

What does Customer Service Mean?

Customer service refers to the assistance that a particular business provides before, during, and even after a purchase takes place. The business’s customer service team must be able to share product knowledge and information, address customer complaints with immediacy, and/or answer FAQs when necessary. Customer service does not only improve the overall user experience, but it also enables businesses to foster a more trusting atmosphere for both the business and its customers.
Customer service can be delivered using different channels such as email, live chat, voice calls, instant messaging platforms, and several other communication channels.

Why Providing Excellent Customer Service is Important?

Generally, providing efficient customer service proves instrumental in thrusting your brand upward. Aside from providing immediate assistance, your customer service personnel can take on many roles in terms of providing the maximum user experience possible. 

These roles are not limited to alleviating negativities among customers caused by misunderstood product information or a defective item, delivering real-time client care, and encouraging customers to leave constructive feedback on your brand.

Moreover, having skilled customer service agents means having the capacity to create more conversational interactions to bridge the gap between the business and your customers. Doing so increases the chances of acquiring more loyal customers and exceedingly improves credibility. 

Knowing that customer support is an essential aspect in acquiring and retaining loyal customers, it is daunting to ensure that you are equipped with the suitable amount of work experience and expertise in this field. Some business owners opt to hire in-house support representatives since it makes communication rapport building easier. In some instances, there are readily available resources in their area. 

Contrastingly, some companies are more driven to expand their workforce through outsourcing. The reason behind this is there is a broader range of skills that they can employ, and some businesses cater to an international clientele. Outsourcing to their target countries will also help them break language and cultural barriers.

In-House VS Outsourced Customer Service

Now that you have a background on what customer service is, it’s time to take a look at the advantages and disadvantages of outsourcing customer service.

Pros of Outsourced Customer Service:

  • Accessible With a plethora of outsourcing companies and unique features available in the market right now, choosing one is rather simple. Most outsourcing companies operate in countries outside the US, such as India, Malaysia, and the Philippines where the cost of living is relatively lower. Meaning, you get high-quality services at a lower price range along with a broader selection of both beginner and experienced staff to join your team.
  • Seamless onboarding A stark contrast to hiring in-house employees, your outsourcing partner can assign a team of remote manpower immediately upon hiring. The faster employment process in outsourcing allows you to save a significant amount of time.
  • Less expensive Outsourcing is known for being cost-effective in that it is remarkably cheaper than hiring an in-house customer service team. Your outsourcing partner sees to it that they have experienced individuals at their disposal to take on any tasks you assign them. 

In other words, you don’t have to start from square one. You get to save more money for onboarding, training, facilities, and resources (but if you have new updates on your services, then that’s a different story). Also, you can pay your outsourcing partner per project within a given time frame. Spending your precious business budget in one sitting will not be a concern. 

  • Scalable workforce — Working with an outsourced team allows you to easily adjust your existing workflow as well as the amount of staff you need to cover a particular project. Outsourcing enables you to seamlessly reduce or increase the amount of workforce based on your project or service’s requirements without the hassle of conducting arduous hiring processes and exit interviews.
  • Time-saver — Outsourcing can take a huge amount of workload off of your in-house team’s shoulders. Since you have an extra amount of time to spare, it allows you to focus more on critical tasks like devising business development strategies and other revenue-generating tasks while your outsourced manpower works in the background 24/7.

Cons of Outsourced Customer Service:

  • Lack of communication — As mentioned, outsourcing companies are mostly located in different countries outside the US. In this light, working with an outsourcing company may make communication quite inconvenient at times due to cultural differences and language barriers.
  • Partial control of manpower — Working with a remote company can make you feel uncomfortable with the work setup especially when you’re new to the whole outsourcing concept. You might feel the lack of total control over the entire work process which can be the cause of trust issues with your remote staff. 
  • Security — Since you are working with someone who’s a thousand miles away from you, you will need to share sensitive information with them online, and this includes passwords and usernames for them to access any platform used for your work. It can be very scary especially when your business is still in its premature phase. The risks of data breach can come when you least expect it.

Be very careful when sharing confidential information about your companies as this can be a determining factor of your company’s demise. See to it that your outsourcing partner is credible and highly reputed. Do further digging about the company you’re opting to outsource your customer support. You can do this by checking their website, past client reviews or testimonials (if there are any).
Moving on, let’s take a look at what an in-house customer service team has to offer along with its corresponding disadvantages.

Pros of In-House Customer Service Team:

  • In-depth brand knowledge — Your internal manpower works solely under your brand. In other words, they possess a vast amount of knowledge of your products and services. They know your brand’s peculiarities as well as how to project your brand image for it to stand out among other companies. They know how to deliver the right level of personal touch when dealing with your clients.
  • Real-time feedback — As opposed to working with an outsourced customer service team,  your in-house team can engage with your clients more conveniently and enable you to receive their feedback right away. This proves helpful in improving your products and services ahead of time.
  • Better communication — Since they are working within the four corners of your office, it is easier for you to converse with your team. The work process is much easier when you can interact with your team in person. You can provide quick updates with ease as well as instruct them directly when there are certain lapses that require further reassessing or even acknowledge them for doing a great job.
  • Quick and Easy Implementation of Guidelines — With better face-to-face communication, cascading and implementing new company policies and guidelines is much easier and faster when working with an internal team. Don’t get this wrong though, this doesn’t mean that an outsourced team is not agile enough to abide by such sudden changes. It just takes them longer to adapt and adjust.
  • Higher Security Safety — Since there is no third party involved in this type of working model, there is a higher level of security in terms of confidentiality and sharing sensitive information about the company.

Cons of In-House Customer Service Team:

  • High-maintenance workforce — Internal staff requires regular training sessions as opposed to an outsourced team that is always ready to work on-the-go and typically already has the level of expertise you are looking for. This can be a big hurdle when you are trying to expand your marketing strategies and if you have time-based goals for your business.
  • Expensive — Working with an internal staff means you have to spend a considerable amount of money on interviews, training sessions, extra facilities, resources, and even their benefits. Conversely, if you opt to hire an outsourced team, you don’t have to worry about these things as they are paid per project or service and not per employee.
  • Availability — If you want to provide 24/7 customer assistance, you need to have as many internal staff as possible to provide round-the-clock assistance. The reality is, hiring several customer support agents can be very bank-breaking. An outsourcing agency can deploy customer support reps whenever your company requires them even with different time zones.

What to Outsource in Customer Service?

Most people think that customer service is limited to phone calls.


In fact, there are several forms of customer service channels that you can employ to stay aligned with your clientele’s preferences and requirements. Expanding your customer support reach also augments your business structure as a whole. If you are opting to hire an outsourcing company to handle your customer support services, you must know its specific nuances.

Here’s a breakdown of different customer service tools, features, and channels available as your options that you can outsource to improve the quality of your customer help desk:

  • Live chat — It is a customer support communication channel that is best used for websites. This allows businesses to interact and engage directly with website visitors through a highly customizable chat widget.
  • Instant messaging (IM) — A live chat feature that contributes greatly in terms of accessibility and entertainment value of your business. It is best used for easy website navigation, pre & post-sales inquiries, troubleshooting, as well as product promotions.
  • Voice Support — Yet another customer support channel that uses Voice-Over IP help desk that provides immediate end-user assistance for handling billing inquiries, answering product and service FAQs, and other outgoing call requirements.
  • Customer support ticketing — A help desk feature that enables businesses to seamlessly route messages, correspondence, and other types of concerns generated via email. This is an excellent tool to amplify your current customer support email management for improved customer service in general.
  • Escalation management — Escalation management allows you to handle difficult callers and other supervisor-level concerns. This enables you to foster calmer and more professional business-to-customer interactions.
  • Order verification —  When outsourced, this subcategory of customer assistance enables businesses to seamlessly review, verify, track, and manage purchases and requests for authenticity and smoother customer engagements. This is mostly used by eCommerce websites.

Should I Outsource Customer Service?

This will all depend on you. 

There are several benefits of outsourcing customer service that will help fill in the gaps in your work process. Similarly, opting to strengthen your B2C relations with the help of an in-house support agent reaps tons of advantages. You must know the strengths and weaknesses of both work models. Identify what you will gain and what you will lose once you choose to hire office-based or outsourced staff.

It is undeniable that the pros and cons of customer service outsourcing and employing a team of customer service agents internally may be an eternal clash between two prolific work setups. But with proper deliberations and careful assessments, you will be able to choose the right one that will suit your business requirements best. Better yet, you might even come up with a way to fuse them together.

Still don’t know where to start?

New Media Services might help. We guarantee that you get a dedicated and efficient group of customer service pros who can work hand-in-hand with your internal manpower. Our multilingual customer support services allow you to cover a broader range of your target demographics. We use smart and effective communication tools like voice-over IPs, instant messaging platforms, and live chat widgets to ensure that customer experience on your services is boosted and handled aptly with utmost professionalism.

Do you want to know more about our multilingual customer service? For more information, click here to explore our multilingual customer service!

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