SEPTEMBER 2023 RELEASES
September 2023 Releases
What is the true cost of AI Agents?
Hiring a human agent isn’t just a $20 per hour line item. There are recruiting fees. Onboarding hours. Weekslong training. Ongoing coaching and management. Software licenses. Desk space. IT support.
Sure, you can offshore your contact center or offload to BPOs.
That might feel cheaper, but these teams will never be as invested in your business outcomes as you are. The result? You sacrifice customer satisfaction, which translates to lost revenue.
And that’s all without even mentioning the significantly-higher-than-average turnover rates for contact centers.
The fact is, defensive spending is not a strategy, it’s just survival. And that won’t work in the long-run. Today, it might feel like it’s your only option, but we’re here to tell you that it’s not.
AI Agents are the real alternative. They’re already in-market, running millions of voice and SMS conversations, proving efficacy on par with humans. And guess what? They’re more cost-effective.
You might be skeptical of the true cost of AI Agents. You might be worried you have to uproot all of your contact center tech, or need a team of engineers just to manage your AI Agents.
That’s not the case, and here, you’ll see why. We’re going to break down the true cost of Regal’s AI Agents compared to human agents—looking at pure labor costs, as well as the ongoing accrued costs that come from each.
On with the fun.
Pure Labor Costs: The Real Cost of AI Agents and Human Agents
Let’s start with pure hourly cost. How much are you actually getting out of each agent per productive hour?
Labor Costs for Human Agents
For human agents, your hourly rates are going to vary depending on whether your team is onshore or offshore. Based on industry averages, those numbers will come out to:
- Offshore: ~$9-10/hr
- Onshore: ~$37.50/hr
That’s per hour, whether your agent is on the phone or not.
On average, onshore human agents spend about 60% of their time on the phone, whereas off-shore agents spend about 75% of their time on the phone.
So, for every hour of work:
- Onshore agents will deliver about 36 minutes of talk time.
- Offshore agents will deliver about 45 minutes of talk time.
Additionally, they take bathroom breaks, snack breaks, mental health breathers, time to stretch… Whatever it is, they’re getting paid, no matter what.
When an AI agent is on, it’s on the phone 100% of the time.
Labor Costs for Regal AI Agents
If we break it down to a per minute cost:
- Onshore agents: $9-10/hr + 45 minutes of talk time = $0.20-0.25/min
- Onshore agents: $37.5/hr + 38 minutes of talk time = $1/min
Based on data from millions of calls handled, Regal AI Agents generally come in at $0.20/min. The cost of implementing AI Agents can vary, but Regal’s pricing structure provides a predictable, scalable model.
Another Major Cost Factor: Always-On Availability and the Cost of Implementing AI Agents
Something else to consider? Human agents work based on their schedule. They complete tasks when they’re able to, not when it’s optimal for your business.
One of the reasons AI agents drive significant increases in speed-to-lead and resolution, is because they complete tasks immediately, when it’s most optimal for you and your customers.
So, think of it this way…
Assuming your average human agent rate is $18/hr, and assuming the average agent works 173 hours per month. You can either:
- Pay each human agent ~$3100 for 103-130 talktime hours.
- Spend ~$2100 on an AI agent and get 173 talktime hours.
And again, that’s just pure hourly labor cost, not factoring in callouts, overtime, attrition, and operational costs like recruiting, ongoing management, IT support, and so on.
Isn’t Offshoring the Cheapest Option?
In theory, offshoring is cheaper per hour, sure. But, it does come with some massive, costly tradeoffs:
- Contextual Gaps: Offshore agents often lack full visibility into your systems and workflows.
- Lower CSAT: Agents struggle to provide the kind of experience your customers expect (given those contextual gaps).
- Compliance Risk: Regulated industries need agents who follow specific workflows precisely and consistently. It’s harder to keep human agents within these guardrails, and can be costly when they stray outside of them.
These gaps can be hard to measure at times, which is why offshoring can feel cheaper.
AI Agents are not only more cost-effective, but are much easier to monitor and measure. They’re always available, and always comply to whatever boundaries you set for them.
Agent TCO Beyond Labor: Full Cost of Implementing AI Agents
Let’s get into the biggest impact factors for cost outside of hourly labor.
The three major factors driving additional costs are:
- Turnover: Contact centers have much higher than average turnover rates. That alone is a massive budget bleed.
- Seasonality / Periodic Hiring: For high-consideration industries like healthcare, insurance, home services, and education, hiring spikes and seasonal staffing can become major complications on cost and labor.
- Onboarding and Training: Onboarding and training humans takes many hours of labor from other humans, and tech support. They also need to be retrained on a regular basis.
Don’t underestimate how big predictability is as a cost factor. AI helps you make your contact center operations very predictable, very repeatable.
Turnover Costs
According to the QATC, the average turnover rate for contact centers is 30-45% annually. In other words, very high.
Some estimate that number is even higher. But for now, let’s just assume that’s the case.
Additionally, ICMI suggests that the average cost to replace a contact center agent is $10,000-$20,000.
Based on these numbers, some quick and dirty math tells us that if you have a 100-agent team, your annual replacement cost will be at least $300,000, and could approach $1 million or more in particularly bad cases.
Hundreds of thousands of dollars just to stay afloat..
How AI Agents Combat This
One hidden factor in the cost of AI Agents is how they eliminate turnover and retraining expenses. You “hire” them once, and you’re set. You pay for usage, and that’s that.
Regal helps you implement, set up prompts, and measure your agents to make sure they’re optimized for the right outcomes.
Seasonal Spikes and Periodic Hiring
Open enrollment in healthcare. Tax season. Back-to-school.
The traditional options for spikes like this are:
- Overhire and eat cost in slow months.
- Hire contractors and pray for quality.
- Let SLAs slip and lose customers.
These aren’t budget-friendly options.
How AI Agents Combat This
AI Agents don’t care if it’s a random Tuesday at 9am, or two hours before taxes need to be filed. They’re always available, and infinitely scalable, without needing a ramp-up period.
Ongoing Training
Human agents forget. They need refreshers. They go off-script. They burn out. And that all shows up on your P&L.
With AI, every optimization you make, sticks. Every tweak to the script, every A/B test win, every workflow change. Whatever it is.
Regal also creates pathways that connect your AI agents directly to all of your data, so they have human-like contextual awareness, and “learn” the same way your best agents do.
You don’t need to “hope” your team implements best practices. AI Agents deliver an output that’s testable, measurable, and easy to adjust at scale.
Real-World Use Cases
Let’s zoom in to some real-world examples.
Medicare Open Enrollment
Annual Enrollment Period (AEP) brings a massive spike in volume.
The result: High volume, low/inconsistent quality outreach. The only focus is to cover the quantity of outreach needed, with less regard for quality.
With AI Agents:
You can guarantee quality, at any scale. And make your comms easy to repeat, year after year.
That helps cut out major recruiting, onboarding, and ongoing management costs, and makes the seasonal workload more predictable.
You can build and fine-tune your agent throughout the Spring and Summer time—the slower parts of the year. When October rolls around, all you have to do is turn your (already trained) agents on. Once enrollment is done? Turn them off.
When next enrollment season hits, those agents are still there waiting for you.
Insurance Lead Qualification
Lead qualification is an example of how AI Agents minimize lost revenue while saving on labor costs.
Every quote request demands a fast, informed follow-up.
But, you’re constantly dealing with 30%+ turnover rates, while manual triage eats up a large portion of your human agents’ time.
AI agents never quit their job. And you’ll never have to re-train them to properly qualify leads.
They make your out-the-door spend more predictable, and sure up the processes that help you drive new revenue.
"Regal allows us to connect with more leads, have more meaningful conversations with those leads, and ultimately convert more leads into paying customers." – Michael-Rose Sandow, Director of Sales Operations at Kin Insurance
Handling Inbound at Volume
Across any industry, managing high volumes of inbounds is a compelling use case too.
Customers do not like answering machines, and the staffing options you’re going to have for 24/7 availability are either going to be very expensive, or poor quality.
AI agents help manage these always-on inbound comms in a cost efficient way.
Spending Less to Convert More
Point is, the ROI doesn’t stop at cost savings.
Regal AI Agents save you on labor cost, but help you operate your contact center more efficiently. You get to spend less, but also convert more.
The system as it currently stands—with overhiring, retraining, offshoring—might be costing you more than you think (or more than you can measure).
AI Agents offer a better, more cost-effective path forward. Lower cost, predictable performance, at whatever scale. The cost of implementing AI Agents isn’t just lower, it delivers ROI that human teams can’t easily replicate.
With AI Agents, your contact center stops being a cost center and starts becoming your competitive edge.
If you’re ready to explore the cost of implementing AI Agents for your business, request a demo with Regal today or see Regal's AI Agents in action here.
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