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South Africa’s GBS sector tipped for ‘phenomenal’ growth

Simnikiwe Mzekandaba
By Simnikiwe Mzekandaba, IT in government editor
Johannesburg, 15 Jun 2022
Reshni Singh, CEO of BPESA.
Reshni Singh, CEO of BPESA.

The US will be a key market for the growth of SA’s global business services (GBS) sector − also known as the business process outsourcing sector − in the near future.

So says Reshni Singh, newly-appointed CEO of Business Process Enabling South Africa (BPESA).

BPESA is the industry body and trade association for global business services in SA serving the international and domestic markets.

Global business services refer to offshore jobs that are outsourced to the South African workforce, Singh explains. And currently, SA’s key GBS offshore market is the UK, with 60% of the local workforce delivering services to UK clients.

The US, on the other hand, is the second-largest source market, followed by Australia and other parts of Europe, she states.

“We are highly-optimistic about the year ahead; the next three years in fact,” comments Singh. “I truly believe that South Africa is becoming a centre of excellence for customer experience. It is through this capability that we see phenomenal growth on the horizon and we believe most of that growth is going to come from the US because of the size of the market.

“With the US, once you’ve proved capability and one or two brands locate here, then the rest follow. So, I definitely think we are going to see a lot of growth coming from the US.”

Unlike other industry sectors, GBS made significant employment gains during the course of the pandemic, leading to it becoming a priority sector for job creation prospects for local youth.

It was previously stated the sector created more than 50 000 cumulative new jobs between January 2018 and the second quarter of 2021. The GBS industry is targeting between 250 000 and 500 000 cumulative jobs by 2030.

Additionally, international companies like Amazon, Webhelp and TransUnion have made key investments in the sector in the recent past, bolstering the sector further.

South Africa was the top offshore destination for customer experience last year. This year, the country was tied with India for the number one spot.

While Cape Town and Johannesburg have been prime destinations for global businesses to locate their facilities and deliver their services, there’s now growing interest in Durban as a location, notes Singh.

Durban is one of the later entrants in this space, she states. “It was historically Cape Town and Johannesburg, but Durban has now grown to a point where they’re doing more than Gauteng [Johannesburg].

“Cape Town is number one, Durban number two and Johannesburg is third – these are the three key regions.”

Singh comments there are other provinces that are starting to play in this space, pointing to the Eastern Cape as an emerging region, primarily focusing on East London and Gqeberha.

She explained that Cape Town, Johannesburg and Durban are considered mature delivery markets. In the case of East London and Gqeberha, they are emerging delivery markets.

On the domestic front, companies like Sigma recently launched its first contact centre in Cape Town township Mitchells Plain, solely to serve domestic clients.

In addition, skills development agency CareerBox plans to open a new branch to upskill youth and women from disadvantaged communities by training and placing them in sustainable, digitally-enabled jobs in the GBS sector.

Meanwhile, in Quigney, East London, last week, small business development minister Stella Ndabeni-Abrahams was on hand to officially open the Dastile Wealth Insure (DWI) call centre.

Founded by entrepreneur Vuyo Dastile, the DWI call centre aims to expand the capabilities of disadvantaged youth in customer care, sales and marketing.

It’s said to have already created 64 direct job opportunities for young people in East London, with the aim to create up to 500 jobs within the next five years, focusing on unemployed youth with disabilities, and females.

Speaking at the launch event, Dastile said: “We are here to show you that anything is possible. We believe that with the commitment and support from the Buffalo City Metro, we can grow further.

“We want the international investors to make the Eastern Cape their first stop for business because we are not only employing young people, we train and skill them through our leanership programme for job market readiness.”