Where Does SA Rank Globally as Outsourcing Location?

South Africa has been named the second most favoured offshore location for contact centre delivery globally.

This is the third year in a row that South Africa has consistently taken second place, straddled in 2020 by two mature sector giants; India in first place and the Philippines in third.

 The annual 2020 Front Office BPO Omnibus Survey conducted by global firm; Ryan Strategic Advisory was conducted with 540 senior decision-makers responding on behalf of 240 businesses representing 42 countries spread across multiple sectors.

Factors that contributed to placing South Africa favourably include:

  • Cost – an attractive price point including cost of labour, real estate, taxes, sector-specific government incentives;
  • Labour – availability, linguistic skills;
  • Business climate – secure and clear regulatory framework;
  • Health and safety – this is expected to increase in significance going forward.

Other stand out efforts that impacted South Africa’s ranking include the ongoing efforts to promote South Africa as a customer experience delivery destination of choice to the international market by the industry body (BPESA) in collaboration with social partners and national government.

“The energy and effort on the ground in South Africa from different constituencies to ensure that the country can service foreign markets makes it an incredibly relevant choice for foreign service providers,” comments US-based industry analyst Stephen Loynd of Trendz Owl.

An interesting development increasingly influencing buyers’ choice of location is the growing adoption of Impact Sourcing; where recruitment intentionally takes place in marginalised communities. This practice of sourcing talent is gaining traction as a sound commercial recruitment policy as opposed to simply a social investment.

“In South Africa, the sector employs an astonishing 260,000 young people, of which 65,000 service international clients and provide services into Europe, the United Kingdom, USA, Asia, Africa and Australia,” says BPESA CEO Andy Searle. “Last year we recorded 34% employment growth, generating 15,086 new jobs, 13,102 of which went to youth aged 18 – 35 and 1,353 of which were inclusively hired through the Impact Sourcing approach. Notwithstanding current market conditions, we can add as many as 500,000 digitally traded service jobs over the next 10 years depending on market conditions.”

The question for the South African Global Business Service sector looking forward is: What needs to be done to secure the coveted 1st place in next year’s survey? With unarguable global competition, South Africa as an offshore location offering deep domain skills and a mature voice-based talent pool is fast catching up in non-voice and digitised services.

“We have already proven ourselves as a quality skills destination. In addition, and perhaps crucially in these times of crisis, South Africa has proven it is agile and can adapt and innovate to ensure continued service to its clients and customers,” says Searle referring to the fact that many local contact centres and BPOs providing services to both domestic and foreign markets ensured safe, workable solutions during the Covid-19 hard lockdown period.  The sector-wide collaboration placed South Africa in a position to not only continue servicing global clients and customers with essential services but also saw additional volumes of work shifting to the country as it picked up the slack of operations in other jurisdictions.