BPO sector boosts job creation in SA

Simnikiwe Mzekandaba
By Simnikiwe Mzekandaba, IT in government editor
Johannesburg, 12 Jan 2022

Over the past four years, the global business services (GBS) sector, also known as business process outsourcing (BPO), created more than 50 000 cumulative new jobs.

This is according to Andy Searle, CEO of South African BPO industry body, Business Process Enabling South Africa (BPESA). He says these jobs were created from January 2018 up to the second quarter of 2021.

The majority of these new jobs, notes Searle, were mainly for young people, contributing towards addressing SA's high youth unemployment rate.

While the COVID-19 pandemic worsened SA’s economic and unemployment standing, the local BPO industry has been one of the resilient sectors, with global clients relocating their business to SA and creating jobs amid the difficult conditions.

International companies like Amazon, Webhelp and TransUnion have made key investments in the sector over the past year.

The sector’s also been tippedas one of the green shoots that will steer the country’s economic reconstruction and recovery in the aftermath of the global pandemic.

As a result, the country has developed as industry master plan set to bolster the sector even further.The plan provides a framework and overview of the contributions to be made by all relevant parties and the support required to realise the employment opportunity.

BPESA signed the master plan that’s designed to increase the growth and success that the sector has achieved over the past few years.

According to Searle, the master plan framework, developed and agreed with the Department of Trade, Industry and Competition (DTIC) and other strategic public, private and social partners, sets a target of creating between 250 000 and 500 000 cumulative new jobs in the sector by 2030.

“Our twofold strategy to achieve this target requires scaling up the services we already provide to our existing global customers by securing additional work from them and attracting new customers who would invest in South Africa by expanding here or shifting existing business from other locations.”

“Confidence in our ability to achieve this ambitious target is led by the South African government, which had already identified GBS as a priority sector,” he adds.

“Prior to the country first being locked down, the GBS export market had seen a 24% increase in CAGR between 2014 and 2018 and then a jump to 34% in 2019, tapering to 15% CAGR in 2020 with the COVID-driven lockdowns.

“That’s twice the global growth rate of the sector and three times faster than key competitors, clear evidence of the priority status of the sector and confidence from the investment community.”

Over the lockdown period, the South African BPO sector managed well, says Searle, highlighting collaborative efforts as being a catalyst.

He explains the industry reacted to the lockdown very quickly, with two goals in mind: Firstly, the safety of its people; and secondly, business continuity and all that it implies.

“Every delivery centre had to ensure the safety of every member of staff, and while spatial planning, hygiene, working conditions and transport are all second nature now, health and safety planning at this level was new back then. And while it was relatively easy to come up with new technical solutions, including work-from-home, given South Africa's excellence in IT, we had to ensure that we were functioning within a global regulatory and compliance framework.

“Crucially, we weren’t acting alone. Major sector shifts, such as the one we’ve experienced, generally occur only when many organisations work together and that’s exactly what we experienced. In addition to the DTIC’s support, we also had industry-wide support – and not just suppliers, but clients and customers too. We had strong and established strategic public-private partnership ties with regional governments and organisations likeyouth employment accelerator Harambee and the Public Private Growth Initiative.”

On the GBS master plan, he notes it is a collaborative clarification of the support that is required to realise the opportunity facing SA, as more global organisations outsource BPO services to locations in the country.

“It caters not just for the demand and supply sides of GBS, but also the components that are essential to the success of any sector in South Africa today – sustainability and transformation.

“Without them, no amount of international investment coming into South Africa will have meaning, and that must remain our driving force,” he concludes.