South Africa has evolved as one of the best BPO hubs in the world. The rainbow country has become the most preferred destination among the buyers of contact center services in significant Westernly demand markets, as per the annual Front Office BPO Omnibus Survey of 2020 directed by Ryan Strategic Advisory.
A bright destination for foreign direct investments
With a world-class infrastructure for business, a strong regulatory framework, and dual taxation agreements with multiple countries – comprising of Mauritius, Malta, and Cyprus – South Africa has gained its status as the powerhouse of Africa.
Undoubtedly it is widely known as a vital gateway to Africa. With around 200 to 300 million people estimated to attain working status across Africa, the continent is geared up for a significant amount of growth. The McKinsey Global Institute regards Africa to be the second-fastest-growing region in the world, creating new and compelling business opportunities for global organizations to invest and grow with the strong, lively, and bustling economy.
The accomplishment has to a great extent been because of the country’s reputation as a cost-effective, reliable, savvy, and close to perfect location for outsourced business services. As an act to display confidence in the robust business outsourcing services of South Africa, in June Amazon announced that it would be employing around 3,000 people in South Africa this year to help its users in North America and Europe.
South Africa is one of those countries in the world which was severely hit by the COVID-19 pandemic and this announcement made by Amazon of adding around 3,000 jobs was like the light in a dark room which could not have befallen at a better time than this. The country’s economy shrank by a stomach-bottoming percentage of 52% in the second quarter on an annual basis data shown by the government.
While carrying out the necessary measures of lockdown to keep a check on the coronavirus situation compromised the continuity of business across the globe, the contact centers of South Africa were quick to move to the remote model of working and were able to stay operational with minimum disruption for clients, as per the new McKinsey report.
Robust operational and service capabilities in the sector are among the reasons that service exports have been identified as an inclusive growth sector in the “South Africa Big Five” statement released by McKinsey.
Currently, the Business process outsourcing (BPO) services in South Africa employs more than 270,000 people in six different cities, 65,000 of whom work with global clients. This whole employee base is estimated to go over 775,000 jobs by 2030, out of which up to two-thirds of the stated jobs would be in the service of overseas markets.
In case the stakeholders act decisively with a proper strategy, the sector can enhance its reputation and the strengths it has displayed in the recent months of these unprecedented times of coronavirus and has positioned itself for further growth, according to the report. McKinsey estimated the BPO sector of South Africa to be at $461 million, out of which $272 million is allotted to traditional BPO, while on the other hand Business Process as a Service (BPaaS) is estimated at $188 million.
The resilient performance of the BPO sector in South Africa is due, in part, to the support and encouragement it has drawn from the national government, as stated by McKinsey. The Department of Trade, Competition, and Industry has been instrumental in adding to the number of workloads servicing global markets through the funding of around R1.3bn ($78m) between the years 2007 and 2018, with a further commitment of allocating around R1.2bn ($72m) in 2019 for the support and various other operational-improvement support programs of the sector.
Moreover, the BPO industry was provided with vital service status, which made sure that local service providers could continue to work with their clients, even during the lockdown period.
Furthermore, English being one of the various languages spoken in South Africa is the main reason English-speaking nations such as the United States of America, United Kingdom, Canada, New Zealand, Australia, and Ireland are chief markets for BPO providers in South Africa, according to the reports of McKinsey.
The report of the survey conducted added, that the regional BPO players of South Africa can easily fulfill the language requirements, and can also compete for added businesses from the corporations in Saudi Arabia, Israel, Indonesia, Thailand, China, and Portugal.
