Offshoring to South Africa in 2012

Over the past decade we have seen huge growth in the global BPO & Offshoring industry. In response to this, South Africa has formulated a very competitive BPO value proposition built around five core areas that will help drive investment to our shores.

January 24, 2012

Written by Gareth Pritchard, CEO BPeSA Western Cape

Following a highly successful 2011, the BPO industry in South Africa is set for another stellar year in 2012.

Gareth Pritchard

Gareth Pritchard

Over the past decade we have seen huge growth in the global BPO & Offshoring industry. In response to this, South Africa has formulated a very competitive BPO value proposition built around five core areas that will help drive investment to our shores.   

Cost Savings

Typically South Africa is able to offer source destinations a cost saving of around 50 %. This saving has increased even further on the back of the dti national incentive scheme which pays investors up to R112,000 for each job created and maintained over a 3 year period.

In Cape Town an additional incentive is available which pays for the first 6 months of telco services for new investors, further lowering the overall cost basket.

Domain Skills

South Africa’s mature domestic BPO market provides a large pool of world-class, experience and skills in the financial, telecommunications and legal domains. In terms of financial skills our tertiary education system generates large numbers of qualified actuaries, chartered accountants and other specialists each year. This is added to by sector-specific programmes in banking and insurance which assist by providing intermediate levels of skill. 

There is a common misconception that the BPO sector in South Africa deals only in large scale entry level customer service work, although this does make up a large portion of the industry, it is in truth still only a part. In the last few years, we have seen some interesting developments in the UK insurance market, with South Africa being used as a high end outsourcing destination for actuaries.  A similar trend is occurring in the LPO (Legal Process Outsourcing) sector, where South Africa is developing a reputation as a high end service location for legal based offshoring.

Large pool of English speaking agents

South Africa has a large pool of highly skilled English speaking graduates (345,000 graduates each year) to choose from, and is second only to India and the Philippines in terms of English speaking graduates coming out of a BPO supplier destination.

Robust enabling environment

Rapidly improving telecoms services have also added to our standing as a world class service destination. This change has been driven by the deregulation of the telecoms market, which has seen telecoms costs reduced by around 85% since 2003 and is set to improve even further on the back of further competition created by the various undersea cables.

First world experience

In terms of positioning, South Africa is well placed to service the European market and is able to fill a gap for US and Australian companies offering 24 hour customer support. South Africa also provides cultural affinity with Western markets, a key quality for a customer service destination.

 “The BPO industry is a key job creator for the country and we are fully committed to helping BPeSA Western Cape and its partners in driving further investment to our shores,” says Alan Winde Minister of Finance, Economic Development and Tourism for the Western Cape.

Contact Centre - Teleperformance

Contact Centre - Teleperformance

As the BPO industry continues to grow in 2012, so too will the competitive landscape. In response to this we need to be proactive and ensure our value proposition remains ahead of the curve. The industry is changing and we have started to see UK based companies pulling their voice operations out of India in favour of quality English speaking locations. This is a great opportunity for South Africa as we are viewed as a high quality voice destination, and as a result, if we can capture just a small percentage of this BPO exodus, we should see substantial industry growth going forward.  

BPeSA Western Cape

BPeSA Western Cape is an Investment Agency for the BPO sector in the Western Cape and facilitates the growth of the BPO and contact centre industry. As an investment agency for the Western Cape, the organisation’s core focus is on attracting foreign investment, in order to drive job creation to the province.