Does an Answering Service Cost More than Hiring a Receptionist?

Using some basic facts, figures, and math, it's pretty simple to determine whether using an answering service or hiring a receptionist costs more.

Answering services and in-house receptionists do many of the same tasks and perform similar job functions. Both can benefit your business in many positive way, but one is a far more cost-effective option than the other.

Consider these three things:

1. How much will it cost you to have a receptionist sit in your office to answer phones? Think about salary, benefits, equipment costs, etc.
2. How professionally will your receptionist answer phones while they are on their break, in the bathroom, out to lunch, or in the middle of the night?
3. What happens if your receptionist has to take three or more calls at the same time?

If you are trying to make a decision between hiring a professional answering service or a receptionist, then you must understand what the real cost comparisons involve. You must also know that it is critical that you set yourself apart from the competition with your own unique telephone brand. Now, let's get into the numbers as we consider if an answering service or receptionist costs more.

So how much does it cost to answer, say, 300 calls each month?

Let's say that your answering service charges about $.90/minute to answer calls. So a program designed to answer 300 calls per month will run about $270. (GASP! $270 per month!!!!). Now let's compare $270 to the price of hiring a receptionist and evaluate the five most significant costs you can avoid by using an answering service.

1. No Salary Expense - How much does a good receptionist cost? At least $15/hour or more, right? That's $2500/month or $30,000/yr. Compared to $270/month you are now saving your business $26,760 per year. Oh, yeah. And don't forget the payroll taxes.
2. No Training Costs - You forgot that you have to train your receptionist to properly answer calls. That takes time. Let' say it takes 2 weeks. With a $2500/month salary you just spent $1,250 on training (approximately 4.5 months worth of telephone answering service just flew out the window). A professional answering service can be up and running with professionally trained operators in about 24 to 48 hours.
3. No Paid Vacations- Everyone deserves a vacation. Even your receptionist. So how much does a paid vacation cost? With a $2,500/month salary you just spent $1,250 to cover your receptionist's vacation (again, 4.5 month's worth of answering service just flew out the window). What's more, while you paid the $1,250 YOU had to answer all of the phone calls! Your answering service never goes on vacation.
   
4. No Paid Breaks - What? Your receptionist eats? Probably should. So when the receptionist goes to lunch or on a break, who answers the phone? Do you now have to hire a second receptionist? Maybe - if your call volume warrants it. Or you will have to take the calls yourself. So how much does it cost your organization to have everyone but the receptionist answering the phones? Are you properly representing your business image? Your answering service never takes breaks.
5. No Missed Opportunities - Let's say you are in the residential damage restoration business (fixing water, fire and mold damage). You know that call that you have been waiting for? That's right, the call from the guy that needs his entire basement remodeled because his hot water heater was leaking all night? Yes, that one! That's probably a $15,000 repair job once it is all said and done. But guess what? You missed the opportunity because your receptionist was using the restroom for 5 minutes. During that time, the call came in and went to your voice mail system. Your $15,000 prospect just hung up the phone and called the next person in the phone book because he doesn't have time to mess around. Ouch! Lost opportunities HURT. You would NOT have missed that opportunity if you had an answering service to take the call. Answering services can handle multiple calls simultaneously and will pick up the phone quickly, with a professional, courteous response.

So, which is the better value? Paying $270/month or paying $2,500/month? In this very realistic example, a professional answering service is 1/10th the cost of hiring in-house. Not to mention, you just eliminated all of the recruiting, interviewing, hiring, training, management, expense and turnover associated with receptionists. Do the math and start looking for an answering service today.

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