South Africa’s BPO Sector Is Country’s Fastest Growing Export

South Africa’s BPO sector is country’s fastest growing export

SA leads in CX outsourcing, with USA its fastest growing source market for global business services from South Africa

Opinion by Clinton Cohen, CEO of iContact BPO

As South Africa continues to rank in the world’s top 3 offshore CX delivery locations, the country’s status as a leading destination for global business services (GBS) or “Business Process Outsourcing (BPO)” is consistently reaffirmed. Right now, SA’s BPO sector is one of the country’s fastest growing exports and is well positioned for growth, investment and job creation.

The United States is currently the fastest-growing source market for global business services from South Africa (17%), while other international markets serviced from SA include the United Kingdom (62%), Australia (10%), China (8%), other African countries (2%) and Europe (1%).

The BPO sector’s growth is also very good news for youth employment in South Africa. The BPO sector currently employs over 270 000 people in six cities, of which 65 000 serve international clients. This total staff base could grow to over 775,000 jobs by 2030, with up to two-thirds of these in the service of overseas markets.

What’s behind South Africa’s BPO appeal to global markets?

Most recently, SA tied in second place (with the Philippines) as the Most Favored Offshore CX Delivery Location for 2024. Perhaps more compellingly, however, the South African BPO industry has an 18% higher customer experience satisfaction rating than its peers (India and Philippines).

According to the South Africa GBS Investor Handbook (BPESA & Invest SA), global brands and enterprises that outsource to South Africa achieve CX quality that is “18% better” than that of competitor offshore markets, as well as higher first call/contact resolution. This consistently translates into 4-5% more customer retention year-on-year, greater customer lifetime value (CLV) and more bottom-line profits.

Global giants like Amazon, Google and Microsoft recognise SA’s potential and have set up extensive customer service and support operations here. As iContact BPO, we have also seen significant growth in new global business accounts from United States, United Kingdom and Australia where we are providing fully outsourced CX delivery services, sales and back-office fulfilment services.

Besides the obvious considerations of technology infrastructure, linguistic capabilities and our stable business environment, a key advantage that South Africa has is a large pool of skilled labour which means that scale and quality can be rapidly achieved. As just one example, iContact BPO recently geared up for a US-based automotive client, hiring 100 skilled agents in less than 100 hours, including management appointments, to handle an incredibly pressured and time-sensitive client with seasonal demand. There are few BPO sectors in the world that can provide this sort of agility and rapid scaling while maintaining quality and compliance requirements.

COMPELLING REASONS TO OUTSOURCE TO SOUTH AFRICA

When you take all the advantages that SA has to offer, and you then factor in the benefit that our exchange rate offers global businesses, it’s a big win in terms of costs and economies of scale. South African BPO providers are more cost competitive than our European and American counterparts, with a fully loaded cost base approximately 11 percent below the global average – making SA a very attractive option for outsourcing at a time when businesses across the globe are under enormous pressure to cut costs and drive profits.

SA is currently the third largest offshore location for UK and Australian organisations which enjoy up to 60% cost savings compared to onshore service delivery, along with a comparable if not better quality of service, cultural affinity and great work ethic of our people.

#1: Better quality, lower costs

Compared to developing world BPO destinations like India and the Philippines, South Africa offers an 18% higher customer experience satisfaction rating than its peers.
The United States is currently the fastest-growing source market for global business services from South Africa (17%). SA is currently the third largest offshore location for UK and Australian organizations that value the country’s cultural affinity, excellent work ethic and empathy-led CX.

SA as a source destination offers cost savings of 60% to 70% compared to Australia, the UK and the US: 65% less for voice-based delivery and 60% less for non-voice-based delivery.

#2: World-class infrastructure

SA’s telecommunications infrastructure is world class. High-speed fibre provides fast, affordable connectivity over a network that is 99.9% digital and includes the latest in fixed line, wireless and satellite communication.
A 9000-kilometer undersea cable will shortly link the East London Industrial Development Zone (ELIDZ) to Mauritius and India, further growing the network.

#3: Convenient time zone location

South Africa operates on similar time zones to the United Kingdom and Europe.
Given its central location, SA is strategically positioned to provide on-demand customer support to the USA, Canada and Australia. It’s the perfect destination for global businesses that require 24-hour service support.

#4: Government support for GBS

SA’s global business services sector enjoys strong support from the national government when it comes to international investments and job creation. The SA government has invested more than R3 billion in the sector since 2016.
The Global Business Services Incentive Programme (est. 1 Jan 2019) exists to ensure that any organization placing service delivery centres in SA extracts real value from its investment.

#5: English language proficiency

The country’s large English-speaking talent pool is known for quality communication skills.
The South African English accent is easily understood and, given its neutrality, is often preferred to many other outsourcing destinations.
South Africans have a cultural affinity with Western countries, making it easier to understand customer and client requirements, build rapport and align practices.

#6: Large, diverse pool of talent

SA has a well-educated and highly skilled workforce, particularly in sectors like customer service, IT, finance, and manufacturing, where English proficiency is high.
There are large pools of multilingual talent, including Dutch, German, French, Italian and Spanish speakers.
According to the GBS Sector Job Creation Report, the BPO sector has created 112,441 jobs since 2015 and attracted significant capital, resulting in a 41% expansion of the industry over the past 10 years. In 2023 alone, 19 307 new jobs were created servicing international markets.

#7: Impact Sourcing

South Africa’s BPO sector is a significant role player when it comes to ‘impact sourcing’; namely, inclusive hiring and building inclusive supply chains.
BPESA is a founding member of the Global Impact Sourcing Coalition (GISC) and conducts multiple national Skills Development Programmes focused on upskilling/reskilling to create distinct advantages in niche skills availability.
Outsourcing providers in South Africa recruit around 90% of their employees from disadvantaged communities, including youth and people with disabilities.

Outsourcing to SA makes good business sense, whether your goal is to overcome labour and skills shortages, mitigate risk via geographic diversification, or leverage specific advantages including favorable exchange rates, a neutral accent, convenient time zones, impact sourcing, and a consistent reputation for top-ranked CX.