The Costs of Customer Support in the Bay Area

Every week we hear another story about how insane rents and house prices have become in the Bay Area.  Of course those prices are the less-happy side effect of a very happy thing – a vibrant tech economy here in the Bay that spills over into just about every other sector.  Along with those prices have risen the costs of commercial property – now at record highs and competitive with even Manhattan.  And don’t even get us started on labor, which if you are an employer you care deeply about indeed!

If you need any corroboration on this VentureBeat had yet another article on it just this weekend.

Space and labor…the main drivers of cost for just about every business in the service economy, which is most businesses, and definitely the main drivers of cost for our favorite function:  customer support.  Several of our partners have asked us for some estimates of how all these costs play out if you are trying to build up an inbound or outbound support team and house it in your San Francisco headquarters, so we thought we would share our back of the envelope calculations.  These are estimates only, and obviously you can spend more or less than any of these numbers if you are willing to make sacrifices on quality.

The Costs of Running Customer Support Internally in the Bay Area.


Space Affects Your Customer Service Costs:

SF has now topped Manhattan for most expensive per sq. foot space ($72 annual average) and as a result companies are even reducing the average per-person allotment of square footage, from 200 to 151.

With 6 folks on your support team that will run you $65k, or $10,800 each per year to provide them 151 square feet of space, adding an incredible additional $5.20 per hour per full time team member. Just for space.

Labor Affects Your Customer Service Costs:

Combine that with SF wages!  Support personnel in SF hourly rates are running approximately $15-$18 for new hires. On the low end you run risk of high turnover, and it is barely livable wage for the team member (which means long commutes). On the high end, well it’s high, and you can expect annual increases if you want to maintain them!  Combine the high cost for this vital talent, with the fact that they are hard to find as the high cost of housing, living, and the stress of commuting makes finding (and keeping) those folks difficult.

Put it together: 

Let’s assume you want to offer service 7 days a week from 8-8 PM. To cover for breaks, PTO etc. let’s assume (based on your contact volume) you need 6 folks, full time.

With 6 team members you require a minimum of one leader.

  • Assuming one leader works Monday-Friday. If you want supervision in the office or online during nights and weekends you may require an additional lead, supervisor or manager. Currently average salaries in the Bay Area for experienced Director or VP range from $110- $200k. One lead, supervisor or manager typically runs $48-$80k annual in salary.
  • Of course this doesn’t take into consideration the HR costs associated with employees, including recruiting, ergonomic equipment, possible issues with workers compensation, FMLA, PTO, and just general 25-30% benefit costs. Nor does it take into consideration the cost of systems for your tech stack including telephony, chat, email, text, Facebook Messenger and AI tools.


Our Calculations:

  • 6 folks at $16 an hour (@2080 hours), with benefits @28% = $256,000
  • Space (if in house); without desks = $65,000
  • +1 Director and +1 Supervisor -(@100k and 60k with benefits @28% = $205,000
    • Keep in mind, you will lose from the above 8 folks a total of 53 hours per month, to PTO (or 6.66 days each, based on a 10 day/annual PTO package)
    • Unless you plan to not support customers on holidays, you will also need to ensure they are covered with holiday pay.
  • Total cost for only space and wages for your support team members, without any HR issues, repetitive recruiting cost, or holiday pay – $525,000
  • Tech Stack – (without laptops, monitors, system set up or implement costs) – Telephony, Chat system and CRM = $15,000


Suggested annual costs for internal support team of 8 – $541,000

Hope you find this breakdown useful – you can nudge the figures in either direction depending on what market you are based in.

By the way, if you are a growing company and would like to find ways of reducing these numbers, check out our Services Page.