Two contract clauses kept my client locked into a BPO relationship they wanted out of.
It took nearly 12 months to fully exit. Here’s what went wrong.
The first clause: they were paying by the agent-month. The full month’s wages, regardless of what that agent actually did. In a typical BPO contract, you pay by the minute or by the hour.
The second clause: volume reductions were capped at 10% per month. The BPO had overstaffed. Attrition was near zero. At 10% per month with nothing coming off naturally, they were stuck paying for capacity they no longer needed for almost a year.
Both of those clauses should have been caught during the RFP process.
The RFP isn’t just how you pick a vendor.
It’s where you establish the terms that will define the entire relationship.
Before you select a BPO, you should have clear answers to all of these:
- How do you bill — by the minute, by the hour, or by the agent?
- What are your staffing assumptions for our volume?
- What happens if you overhire?
- How much can we reduce volume per month if we need to?
- What does a full ramp-down look like and how long does it take?
These aren’t details to negotiate after the vendor is selected. By then the leverage has shifted.
Experienced BPOs know how to take advantage of unprepared buyers. I’ve seen it firsthand.
If you’re selecting a BPO for the first time or want help getting out of a contract you feel stuck in, send me a DM on LinkedIn.
I’m Mark Danielson, and I help healthcare leaders reduce support costs while improving patient satisfaction.
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