The Western Cape`s drive to encourage investment in call centres is a sustainable economic model that will encourage employment and skills development for some time to come, says CallingtheCape executive director Luke Mills.
Call centres have been a key development strategy of the Western Cape government for some time as part of an overall programme to encourage high-technology industries to invest in the province.
However, there have been questions about the long-term sustainability of call centres as costs play an important role for international companies considering their investment strategies.
When the rand weakened to all time worst levels against foreign currencies three years ago, many UK companies, followed by some European and US firms, began to consider setting up call centres in the Western Cape to service their own markets. By arbitraging the rand exchange rate, coupled with cultural and time zone similarities, the province was considered a good bet.
But since the rand has strengthened by 45% against its worst levels, some fear this business case could be weakening.
Ambitious plans
"Call centres are incredibly large investments and so they are not as mobile as people think," Mills says. "The initial physical investment is between R15 000 and R85 000 per seat and the training of the call centre agents adds at least another R20 000 to the bill."
During the past two years, several companies have announced plans to invest in South African call centres. This includes the UK Budget insurance group, which announced a R1 billion expenditure plan last year, and Dialogue, which has steadily expanded its service offerings in the Western Cape.
"Many companies have indicated to us that they still have incredibly ambitious plans afoot. We can easily see a 25% employment growth rate on the 11 000 people who work as call centre agents," Mills says.
India 'cheaper, but not better`
He says that while India remains about 30% cheaper than SA for establishing a call centre, the South African operations offer clients a better experience due to the cultural similarities with the target markets. South African employees are also able to handle complex products and services.
"The customer who is in contact with a call centre must not only get their business transacted, but the experience must be pleasurable. When they hang up, they must say 'what a nice person`," Mills says.
Other issues that work in SA`s favour are the long-term educational process at school and the post-school process of cadetships for call centre agents, and the low attrition rate among those employed.
"The South African school system is quite good and the learners come out with passable English language skills that may need some polishing, but not much. The attrition rate is about 10% which is low compared to other countries," Mills says.
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