Govt invests in SA's 'formidable' BPO value

Government has committed a budget of R1 billion over the next five years to provide incentives to SA's business process outsourcing (BPO) industry.

Speaking yesterday afternoon at the launch of the incentives, trade and industry minister Mandisi Mpahlwa reiterated the importance of the BPO sector to government.

"We have recognised the services sector as a significant part of our economy; yet considered evidence shows we haven't yet reached our potential. BPO and off-shoring has the ability to significantly contribute to the creation of new jobs and economic growth... SA's value proposition is formidable and compelling."

Companies investing in capital expenditure and agent training to service new contracts will now be able to apply for grants of up to R60 000 per seat and R12 000 per agent, respectively.

Tumelo Chipfupa, the Department of Trade and Industry's (DTI's) deputy director-general of enterprise support, noted the investment grant ranges between R37 000 and R60 000 per seat, depending on the employment opportunities created.

Projects that will employ between 200 and 499 agents, and require capital infrastructure spend of at least R74 000 per seat, will be eligible for grants of between R37 000 and R44 600 per seat.

Projects that will employ in excess of 500 agents, and require capital infrastructure spend of R89 200 per seat, will be eligible for grants between R44 601 and R60 000 per seat.

Should a project expect to employ 200 or more agents, but qualifying infrastructure spend of less than R74 000 be required, then a grant of R37 000 to R52 000 per seat will be available.

This grant may not exceed half of the agent salary costs for the first two years of the project, said Chipfupa.

The training and skills support grant will make available a maximum of R12 000 per agent for company-specific training.

Generic training, such as entry-level IT skills, communication and customer service training will not be eligible for this incentive, but it will still be available through the relevant Sector Education Training Authority.

In calculating qualifying expenditure for the training incentive, companies can include the costs of both in-house and outsourced training; costs of trainers and facilitators; development of learning material; trainer travel and accommodation; and training equipment and facilities.

The DTI has imposed several restrictions on the grant to ensure its aim of creating jobs and increasing the sector's contribution is realised, said Chipfupa.

As a result, only companies that are starting new operations or expanding existing operations need apply.

Contracts that "displace" employment through transferring that capacity from a client, competitor or associated operation already in SA, do not qualify under the DTI's terms.

These incentives only apply for projects that establish a minimum of 100 seats and 200 additional full-time employees within its first year.

"We want to see results from these incentives. Job creation in bigger numbers must be achieved," concluded Mpahlwa.