BPO Outsourcing Companies: Avoid These Red Flags

Looking for a BPO outsourcing provider can be a daunting task. After all, you’re entrusting them with core aspects of your business, hoping they will get the job done as well as—or even better than—you could do yourself.

So how do you find a BPO provider worth trusting?

Careful vetting and thorough research. The key is not just in what to look for, it’s also in what to avoid. If you can avoid these commonly overlooked red flags, you’ll already be miles ahead of your competition.

The Consequences of Ignoring Red Flags

When it comes to BPO outsourcing, ignoring red flags has wider consequences than just getting stuck in a “bad fit” partnership or not getting the results you want (as if those aren’t bad enough). A bad BPO partner can have a wide-ranging negative impact on everything from processes to productivity, revenue and retention, security and more.

For example, poor BPO providers can create:

Reduced business productivity. The wrong BPO provider can tank productivity and waste both time and resources through mismanagement, ineffective tactics, poor communication and a host of other weaknesses and red flags.

Potential financial losses. Obviously, if productivity is declining, you’re wasting resources both in terms of the money you’re spending on BPO (but not getting a good return on) as well as the indirect financial losses that lack of productivity creates. But a bad BPO partner can also reduce the impact and quality of your communications, product, or whatever work they’re handling, creating a worse customer experience and reducing your profitability, retention, bottom-line profits and more.

Damages to brand reputation. A negative BPO provider especially has the potential to damage brand reputation when you outsource things like customer service, communications or your help desk. Although these are common (and productive!) things to outsource, choosing the wrong provider runs the risk of creating a negative reputation for your brand—one that will take years of effort, resources and concentrated focus to undo. Worse, a negative reputation has a huge impact on your customer loyalty and retention, marketing efforts and efficiency, profits and overall company growth.

Security and compliance risks. A hidden risk that’s often overlooked is security and compliance. Outsourcing requires trust and reliance on your BPO provider, and a company who’s not worthy of that trust has the potential to create major headaches for your business. Security and data breaches can have a majorly negative impact on brand reputation, and take months or even years to resolve.

8 Red Flags to Watch Out For

Obviously, these are no small consequences. The way to avoid them? Knowing the red flags to watch for.

1. Lack of Clear Communication

Good communication is one of the most important foundations of a reliable BPO provider. Poor communication not only undermines your working relationship with your provider, but it can also weaken productivity and results. If your BPO provider is working with your customers at all—say, managing customer service—your provider’s poor communication will negatively impact your customer experience as well.

That said, good communication can be difficult to actually pinpoint. We look for four key elements:

  • clarity
  • consistency
  • collaboration
  • openness

A BPO provider with great communication will communicate clearly and consistently, ensuring that everyone is on the same page with regular updates. But the communication should also be open and transparent, allowing for real collaboration. This is how real innovation happens!

Look at the communication during the vetting process, as it’s often indicative of what the working relationship will be like. Is it tough to pin them down, get answers to your questions, or understand what’s needed next? Poor communication early on is unlikely to improve later.

2. Inconsistent Quality of Work

A thin or inconsistent portfolio from a BPO provider is usually a bad sign. It either means that they:

  • can’t manage a variety of clients well at the same time, or
  • that they’re not experienced in a variety of industries or services, or
  • that they have a lack of leadership expertise and quality management—meaning that some projects go well while others suffer

This is one reason why examining a potential provider’s portfolio is so important—looking at the quality of not just one star client, but ensuring that there’s consistent results across the board can help avoid getting stuck with a provider who can’t really get the results you need.

3. No Client Testimonials or References

Similarly, a weak or non-existent roster of happy clients is a big red flag. A BPO provider doesn’t need to work with huge household names and big brands to be successful, but they should have a roster of happy clients and some client testimonials or references they can provide for you.

If no one they’ve worked with has anything good to say… there’s a reason for that. And it’s not one you want to experience for yourself.

4. Overpromising and Under-delivering

This is another major red flag that often shows up in the vetting or proposal process and spells out disaster for down the road.

  • Does your potential provider consistently promise they’ll have something to you by a certain date, but they don’t follow through?
  • Do meetings get canceled regularly or does the communication and proposal process feel chaotic?
  • Are they “talking a big game” but delivering lackluster work or samples?

All of these are red flags that indicate they’re likely to continue overpromising in the future, without having the resources to actually deliver on it. Similarly, if they’re promising big results, ensure that they have case studies or examples of delivering on this for other clients. If they couldn’t do it for others, how do you know they can do it for you?

5. High Staff Turnover

High staff turnover is a common problem within call centers and BPO providers of all kinds—and having really high turnover is not only a big red flag, it also means you’re likely to get lower-quality results. That’s because BPO providers with high staff turnover typically spend less time investing in staff training and quality or have underlying issues with management, both of which will negatively impact the results they can get for you.

On the other hand, providers who manage to reduce turnover typically offer:

  • more experienced staff with higher levels of expertise—because they’re retaining staff long enough for them to become experts
  • better employee engagement, which results in better service for you and the customer
  • better results through increased staff consistency
  • more productive and efficient workflows and methods—benefitting your ROI and your results

6. Obsolete Technology and Systems

Weak or outdated technology is another red flag among BPO providers, and unfortunately, a common one. Having—and using—the right digital tech matters more than ever.

Working with a BPO provider that uses outdated or weak technology not only means you’ll be steps behind your competition, but it also means that the quality of your results will be diminished. Not to mention that outdated technology is a sign that your BPO provider doesn’t value or prioritize innovation, a critical measure for success in today’s rapidly-changing world.

7. Absence of Proper Data Security Protocols

As mentioned above, security and compliance risks can be a huge consequence of ignoring red flags. As such, looking at a potential provider’s data security protocols and practices is crucial. For BPO providers that either:

  • don’t have the proper protocols
  • don’t have compliance certifications
  • or both

you’re looking at a major red flag. Data breaches are only becoming more common, and any BPO provider you work with should have the appropriate data security certifications and procedures for your industry (e.g. PCI-compliant, HIPAA compliant, etc.).

8. Hidden Costs and Unclear Pricing Models

Finally, hidden costs or unclear pricing models are a red flag as well. You want your BPO provider to be upfront and transparent about all parts of your partnership, costs included. An unclear pricing model not only indicates that there might be other undisclosed information you’re not getting (i.e. ineffective and tedious communication processes, lack of resources, etc.), but it definitely indicates that you’re about to get slapped with hidden fees and pay more than you expected.

Pricing models for BPO providers can vary, which is normal—we’ve outlined some of the common call center pricing models here—but whatever the model is should be clear, scalable and transparent. You should be able to easily understand and see all the costs upfront, know what is and isn’t included, and understand how and when it would change in the future.

The Foundations of a Reliable BPO Company

So, what should you be looking for in the search for a reliable BPO provider? We recommend looking for four critical cornerstones:

  • reputation and track record
  • adherence to clear quality standards
  • transparent communication and reporting
  • industry expertise

As discussed above, a clear portfolio of demonstrated work and results, alongside positive client testimonials, are a great sign of a positive track record and ability to get results. If a BPO provider can prove that they’re able to deliver, this is an excellent sign.

Similarly, having—and being able to demonstrate adherence to—quality standards are a great way to ensure that your BPO provider will be improving and supporting your business with quality results. For example, at ROI CX Solutions, we have high quality standards and consistently meet and exceed them for our clients—something that’s apparent in our case studies. When vetting your potential providers, you can ask about their quality standards and see if they align with your own definition of quality.

Transparent communication is another foundational element, as discussed, and extends to reporting. If a BPO provider can clearly and consistently communicate what results they’re achieving and how your projects are progressing, you will have a much easier time generating reliable results.

FInally, industry expertise is a must. While there’s many great BPO providers available, not all of them will be the right BPO provider for your unique needs and circumstances. Finding a BPO provider who is clearly experienced in your industry and the services you need will go a long way to developing a reliable and successful partnership.

Steps to Vet a BPO Company Effectively

Of course, knowing what to look for and actually knowing how to look for it are two difficult skills. To thoroughly vet a potential BPO provider, make sure you:

  1. Conduct thorough research. Far too often, companies are in a rush to get projects started or get results, and they hire a BPO provider without doing enough research. Make sure you know exactly what you’re looking for, evaluate each of the foundational qualities above and look for red flags, and ask plenty of questions to ensure that you understand your BPO provider’s strengths and weaknesses.
  2. Ask for client references and testimonials. Don’t skip this step! If you’ve done your research well, these references and testimonials should back up what you’ve found. And if they uncover something surprising—it’s better to have learned from other’s mistakes than to have wasted time and money finding out the hard way.
  3. Initiate a trial or pilot project if possible. In most cases, a good BPO provider will be happy to take on a pilot or trial project to ensure it’s a good fit for everyone. If the pilot project goes well, you can scale up your partnership and entrust your new provider with additional work and responsibilities. But if it doesn’t go well, you’re not stuck in a dead-end partnership.
  4. Visit their facility (if possible). Meeting with the leadership and staff of your potential provider in person can be a great way to evaluate communication, culture fits, working culture, productivity, security, expertise and more. Some red flags that can be easy to hide during remote, asynchronous communication are difficult to hide in real life—and the reverse is also true. If you’ve found a standout BPO provider, it’ll likely shine through during an in-person visit.
  5. Review all contracts and agreements thoroughly. Don’t sign on the dotted line without careful review of all contracts and agreements. This is essentially your last chance to catch red flags, especially things like hidden fees and clauses or poor communication. When you look over your contract, if it isn’t exactly what you’ve discussed and expected, bring it up right away and ensure that you are still on the same page.

Conclusion: The Importance of Due Diligence

In short: for the best chances of success with your BPO outsourcing, you need to be carefully evaluating providers and looking for red flags as well as signs that your provider is reliable. If you ignore potential red flags—or don’t at least look into them further—you run the risk of experiencing reduced productivity and effectiveness, diminished results, reduced brand reputation, negative impacts on your bottom, security risks and more.

On the flip side—a reliable BPO provider can be a crucial partner in your business growth. If you can outsource time-consuming elements of your reporting, customer service, administrative work, or other functions, you can make your in-house staff more valuable and productive, while achieving cost-effective results. It’s a win-win that benefits your business and your bottom line.

For a BPO partner you can trust, our team at ROI CX Solutions is here to support your business needs and goals. With decades of experience across various industries, high quality standards and an experienced team to back them up, we know how to get results (and we can prove it).

Connect with an expert from ROI CX Solutions today and see how we can help drive the results you’re looking for.


Look for a BPO provider that has high security and data privacy standards. Your BPO provider should be, at minimum, PCI-compliant, especially for e-commerce companies, and additional certifications or standards (such as HIPAA compliance) are a must for high-risk industries, as well as a good sign for any industry.
Careful research and thorough vetting can help ensure you work with a reliable BPO company. Look for companies who have a strong reputation and track record, with positive client reviews or testimonials. In addition, BPO companies should be able to demonstrate adherence to clear quality standards (that align with your own!) as well as industry expertise. Clear and transparent communication and reporting methods are also a good sign of a reliable BPO provider.
The downsides of outsourcing often include a lack of results or clear ROI, data security or privacy concerns, or inefficient or ineffective workflows that slow down business growth. The good news is that these common downsides can be avoided by working with reliable BPO providers.
Avoid any BPO companies that lack clear communication, have an inconsistent quality or work or poor client reviews, use outdated technology or have a lack of data security protocols, have low employee retention or use unclear pricing models. Any of these is a major red flag that should be carefully investigated before proceeding with that BPO company.

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