AI Slashes Costs, Sparks UK Customer Service Reshoring

Market research: AI sparks a reshoring wave as UK brands bring customer service home

New data from ArvatoConnect shows UK brands are preparing to bring customer service back onshore. In a survey of 200 in-house CX leaders, 34% say they plan to reshore part or all of their operations in the next 12 months, on top of the 46% that already deliver at least some support in the UK. The driver: AI is changing the cost equation and the operating model.

According to the research, AI can cut delivery costs from around £42 per hour for a human agent to roughly £16. That puts UK-based operations on par with leading offshore destinations such as South Africa-without the trade-offs that often come with offshoring.

Why leaders are reshoring

• Cost parity through AI: Automation and agent-assist reduce the cost per hour to ~£16.
• People and culture: 31% cite better staff retention; 26% say cultural familiarity improves outcomes.
• Customer expectations: 26% report customers prefer local support.
• Technology access: 25% point to better access to tech onshore; 25% to simpler management and training.
• Pent-up intent: 73% would reshore if cost wasn't a factor-technology is removing that barrier.

The cost math has flipped

For years, the playbook pushed offshoring to cut costs while trying to protect quality. "This model is losing relevance and fast," said James Towner, Chief Growth Officer at ArvatoConnect. "The question now isn't where to move operations, it's whether to offshore at all."

With AI taking on routine contacts and amplifying agent productivity, brands can keep quality higher, respond faster, and still meet their budget constraints. The result: fewer compromises between cost, quality, and control.

What this means for support leaders

• Rebase your unit economics: Model cost per resolved contact with AI self-serve, agent-assist, and smaller onshore teams.
• Redesign the operating model: Route simple contacts to automation, escalate to skilled UK agents, and use AI tools for real-time guidance.
• Retain and reskill: Turn experienced agents into AI supervisors, quality coaches, and knowledge managers to boost retention.
• Tighten compliance: Onshore data handling simplifies UK GDPR, training, and auditing. See guidance from the ICO.
• Renegotiate vendor mix: Keep niche offshore capacity where it adds value; prioritize onshore for sensitive or complex work.
• Measure what matters: Track CSAT, FCR, AHT, automation rate, cost per resolved contact, and deflection-to-resolution quality.

90-day reshoring playbook

• Weeks 0-2: Build the business case. Identify 3-5 high-volume intents for automation. Baseline costs, CSAT, and quality.
• Weeks 3-6: Launch AI self-serve and agent-assist for selected journeys. Stand up a small UK pilot team. Create decisioning and escalation rules.
• Weeks 7-12: Expand intents by 30-50%. Shift a defined channel or product line onshore. Compare outcomes vs. offshore and lock in the scale-up plan.

Risks to anticipate (and how to de-risk)

• Demand spikes: Keep overflow routing and surge playbooks; pre-train models on seasonal intents.
• AI errors: Use retrieval-augmented responses, strict guardrails, and human-in-the-loop for sensitive cases.
• Privacy and data control: Keep PII processing onshore; minimize retention; audit vendor data flows.
• Skills gap: Train agents on prompt tactics, tools, and judgment. Build playbooks for edge cases.
• Integration drag: Start with API-friendly channels; phase in legacy systems after quick wins.

Where to upskill your team

If you're building AI-assisted support, upskilling is the fastest lever. See practical pathways by role at Complete AI Training - Courses by Job.

Who's behind the research

ArvatoConnect, part of Bertelsmann, is a digital transformation partner for customer experience and business optimization. Clients include premium automotive groups, technology firms, charities, and UK public sector bodies such as HMRC, Fremantle, and the Department of Education. The company was named Europe's Top Digital Transformation Solution Provider for 2025 by CIOReview Europe.

Get the full findings

Read the executive summary: Is the time up for offshoring?