The 3 major challenges of scaling a BPO


The BPO industry is booming, but many outsourcers still need help growing their company. Scaling beyond 1,000 seats is something that relatively few BPOs achieve, but it’s entirely possible as long as owners are prepared to take risks and persevere with a growth-focused approach.


“What is stopping 500 to 1,000 seat BPOs, especially at twenty to thirty thousand dollars per seat? What is stopping them from getting to a 10,000 seat BPO?”

The Future Workforce Podcast

This article will explore why BPOs find it so hard to scale. We will identify the challenges they must overcome and the reasons many outsourcers are so resistant to growing beyond a “mom-and-pop” establishment. 

Listen to Time Doctor’s very own Liam Martin talk to Derek Gallimore from Outsource Accelerator about scaling a BPO in this podcast:


1. Transitioning from small to large-scale operations

Growth in the BPO industry is difficult but not impossible. Most outsourcing companies can easily grow to between 500 and 1,000 seats, but scaling beyond that is seemingly much more challenging. 

While there are no specific reasons why BPOs typically have trouble scaling beyond 1,000 seats, there are common pitfalls and attitudes that small-scale BPOs need to avoid in order to give themselves the best chances of growth.

From rags to riches

OK, we’re not exactly talking about “rags” here; BPOs of 500 to 1,000 seats aren’t exactly struggling. In fact, relatively small-scale operations like this are often highly successful, churning out a commendable level of profit and comfortable earnings for their owners.


However, it’s this comfort that stunts growth. Scaling to the next level requires some risk, yet small-scale BPOs and their owners frequently lack the ambition or courage to take the leap. Understandable, sure, but restrictive nonetheless.

“The ones that do seem to be able to do it have a certain brand cachet. They get uncomfortably specific about a particular niche and execute on that. They actually say no to a bunch of customers that they could just bring on, but they’re not the exact match and therefore will churn out of your business relatively quickly.”

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To truly grow into a large-scale BPO business, owners must risk the golden egg they’re sitting on. In other words, they must move their company beyond its convenient “mom-and-pop” lifestyle by risking and investing more money. Of course, they must ensure they have the financial stability and resources to do this. Scaling beyond the comfortable 1,000-seat mark is indeed a risk but a calculated and highly achievable one.

A growth-focused approach

While the phrase “you have to spend money to make money” may be a little reductive, there is significant truth to its meaning. Many small-scale BPOs operate too conservatively, declining to spend big in favor of remaining comfortable and stable. But if you want your BPO to grow in size and profitability, you need to start investing more.

Investing in growth is investing in your future – just look at Silicon Valley. The region serves as visual proof that increasing expenditure can create extreme growth. While it may require your business to go cash flow negative temporarily, you’ll soon find that a growth-focused, investment-heavy approach pays off.

BPOs who have succeeded with growth-focused approaches will always tell you that persistence is critical. It may seem complicated and daunting initially but stick to your investment plan, and you’ll eventually reap the rewards.

“People find it enormously difficult and expensive to sell and to grow, but that has to become an operational process that you can refine. Unless you go down that road and persist at it, then you don’t get good at it.”

The Future Workforce Podcast

2. Overcoming opposition to outsourcing

Persistence is not only critical in scaling a BPO but also in marketing it. Outsourcing pitches frequently encounter resistance, and many BPOs find it challenging to sell their services due to the various prevailing misconceptions about the industry. Advertising is crucial in scaling your BPO, so breaking this resistance to outsourcing is yet another obstacle owners must navigate before they can experience sustained and accelerated growth.

Attitudes towards outsourcing

The main reason outsourcing can be so hard to sell is that many people hold negative and often misguided viewpoints on the industry. Attitudes towards BPOs can be exceedingly cynical, the main misconception being that outsourcing involves exploiting people in lesser-developed countries for profit.

On top of this, many companies simply don’t want to employ anyone from outside their own country, as they mistakenly believe it means a drop in quality. Even those who have had experience with outsourcing in the past may be put off by a single bad experience where they failed to get an ROI. 

However, companies who have persisted with outsourcing have profited greatly from the service, even if their first BPO experience was unproductive, proving that those who disregard the misconceptions are duly rewarded.

Resilience gets results

Just as BPOs must persist with a growth-focused strategy, they must also persevere with their marketing and sales operations. Outsourcing companies will initially encounter pushback, but meeting the resistance with resilience will prove to be a successful approach.

Developing a hardy advertising and sales approach is crucial when scaling your BPO or when growing any business, for that matter. Build trust among your existing clients and use this as a foundation for attracting new ones. Foster productive and amicable relationships with potential clients, demonstrating the value you can bring to their business operations.

That said, it’s not solely about value. Since BPOs are effectively talent management companies, clients want reassurance that your outsourcing business will take good care of their workforce and any new staff members that you hire in their name. By marketing your BPO as a resilient and reputable firm, you’ll start seeing positive results in terms of client acquisition and, in turn, growth.

“In this industry, you’re handing over your talent. his is one of the most precious resources inside of your company. So you have to develop a lot of trust with those clients. It’s just about building that relationship and making sure that you’re helpful in doing that at scale. It’s a difficult process, but if you can do it, you can build a TaskUs, you can build a Convergys. ”

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3. Beyond the founder: Beating the final boss

One final obstacle that often hinders scalability is, rather ironically, the company’s founder. Many start-ups, particularly in the technology industry, fail because they can’t scale beyond their founder. A concept known as “founder magic” hinders a company’s growth because the regular sales team can’t compete with the control and adaptability of the founder during the sales process. In other words, the sales team can never outperform the founder.

“Founder magic”: What’s it all about?

Let’s examine the “founder magic” phenomenon in more detail. This concept is rife within the tech industry. It describes the unique ability of a company’s founder to make changes to their offer and product to accommodate a potential client’s needs. Closing a sale is quite a bit easier when you can tailor the product to a specific customer; it’s the ultimate sales pitch.

However, when a start-up or small-scale company hires a sales team, the ability to modify the product for each potential client disappears. Salespeople can’t outperform the founder, not least because they can’t possibly know the product as intimately as its creator.

For small-scale companies and BPOs to grow, they must find a way to work without the “founder magic.” Owners must relinquish control over sales and trust the capacity of their sales and marketing team to find new clients. While this may lead to a temporary drop in conversion rates, it’s the only way to scale your company into a multi-million-dollar business. Selling must become a sustainable and repeatable process. 

“The reality is that a lot of tech startups die in this phase because they can’t get past that founder magic. The founder always thinks they’re a better salesperson. They’re not a better salesperson, they just break the rules.”

The Future Workforce Podcast

No risk, no reward

Growing a BPO from a small-scale firm to a multi-million-dollar company is a challenging task. There are several factors to consider, not to mention risks to take and opposition to overcome. Persistence is key in all aspects of the business, from implementing growth-focused strategies to being resilient in the face of misguided resistance to your services.

For those willing to surmount the challenges and risks that come with scaling a BPO, the rewards can be immeasurable. Since the BPO industry is expected to grow quickly in the coming years, your outsourcing business can take full advantage of the current market and scale beyond a simple “mom-and-pop” establishment into a large-scale firm.


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