Considered somewhat of a late entrant into the global business services (GBS) space, coastal city Durban is now entrenching itself as a leading GBS hub.
This, as 25% to 30% of SA’s GBS workforce is concentrated in the KwaZulu-Natal (KZN) capital city, according to Business Process Enabling South Africa (BPESA).
BPESA says Durban is now the country’s second-largest global services hub by headcount, behind Western Cape capital Cape Town, which occupies prime position.
“As South Africa grapples with a youth unemployment crisis, the GBS sector is playing a pivotal role in shaping a more inclusive economic future,” comments BPESA CEO Reshni Singh.
“In 2024, the sector created over 20 000 new jobs, with KZN alone recording just over 6 000 new jobs for the year.
“On average, youth jobs accounted for about 89.25% of new hires for the year, demonstrating the attractiveness of this growth sector for its youth job creation potential.”
Invest Durban CEO Russell Curtis adds: “Through initiatives such as Innovate Durban, which runs youth innovation challenges and digital skills bootcamps to upskill youth in areas such as IT, coding and problem-solving strategic talent development, the province is equipping a new generation for the digital economy.”
The GBS sector, formerly classified as business process outsourcing, was identified several years ago as a key growth driver to create jobs, with a particular focus on youth and women.
Non-profit organisation BPESA is the national industry body for the GBS sector. It aims to promote trade and serve the interests of its members and stakeholder groups involved in the sector in SA. In 2022, the organisation launched the GBS Masterplan – a strategy to create 500 000 cumulative international-servicing jobs in the sector by 2030.
South Africa ranks as the world’s third most attractive offshoring destination, in the GBS space. The country’s strength is in the English language, with a predominant focus on markets such as the UK, US, Australia and a few other English-speaking outsource markets.
The UK remains SA’s largest source market for global business services delivery, with a 55% share in terms of headcount. The US market has also witnessed grown, with 33% of globally-focused workers servicing that market, up from 1% in 2019.
On a provincial level, KZN hosts multichannel, multilingual global delivery centres operating and servicing markets across the UK, the US and Australia. It is also home to B2C and B2B outbound sales talent serving the global business services market, according to BPESA.
“Critically, labour and operational costs are 65% to 70% lower than source geographies such as Manchester, Dallas and Sydney, delivering significant cost savings without compromising service quality,” states Curtis.
“KwaZulu-Natal’s GBS sector demonstrates that we can compete globally while creating meaningful opportunities at home,” notes Singh.
Durban’s International Convention Centre will serve as the location for the BPESA GBS and BPO Conference, taking place from 3 to 5 November.
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