Business process outsourcing sector helps SA spring into jobs growth
The South African global business services (GBS) sector, also known as business process outsourcing (BPO), is targeting 100 000 new jobs by 2023 and 500 000 by 2030.
This, as the sector managed to be one of the few industries that created job opportunities amid the COVID-19 challenge. It is also identified as key to boosting the country’s employment prospects.
So says Andy Searle, CEO of Business Process Enabling South Africa (BPESA), noting the BPO sector is relatively large in the country, employing 199 999 people in the domestic market in both the captive and outsourced environment.
In terms of the international or offshore segment of the market, which services clients in countries around the world, the sector employs 72 850 people, notes Searle. In total, the sector has 271 850 people in its employ.
South Africa’s unemployment rate has worsened over the past year, compounded by the COVID-19 pandemic.
Statistics SA’s latest Quarterly Labour Force Survey (QLFS) shows there was an increase of 701 000 in the number of unemployed persons in the fourth quarter of 2020, compared to the third quarter of the same year.
As a result, South Africa’s unemployment rate increased from 30.8% in the third quarter of 2020 to 32.5% in quarter four of 2020 – the highest unemployment rate recorded since the start of the QLFS in 2008.
Even though the audited results are not in as yet, Searle says, based on estimates, in excess of 10 000 new job have been added in the international market space of the BPO sector.
Despite the COVID-19 challenges, there’s been a hive of activity in the country’s BPO sector in recent months, with international companies announcing plans aimed at boosting the sector even further.
Last June, Amazon announced it would be hiring 3 000 people in SA this year to support customers in North America and Europe.
In the Western Cape, the City of Cape Town has also witnessed growth in the sector, revealing that more than 6 000 new job opportunities were created in the city’s BPO sector between January and December 2020.
In February, consumer credit reporting agency TransUnion announced the opening of a new BPO centre in the country, which is set to boost job creation in the country.
Searle explains: “The sector has, due to the positive lockdown response, seen growth over the past year, with a growing pipeline of interested investors looking to engage with alternate geographies to ensure geographical risk diversification into the future and also to tap into the affordable quality South Africa delivers to international clients and customers.
“National government has recognised [BPO] as a priority sector and is in the process of rolling out a master plan, which will assist the sector in achieving its target of 100 000 additional jobs by 2023 and 500 000 by 2030.”
BPESA is a not-for-profit organisation that serves as the industry body and national trade association for the global business services sector in SA. It has partnerships with the private sector, national government through the Department of Trade, Industry and Competition (DTIC), and youth employment accelerator Harambee.
Searle emphasises that the South African GBS community, as a recognised priority sector, will continue to work with BPESA and partners, the DTIC and Harambee to achieve growth targets in the sector.
According to Searle, when COVID-19 reached SA, the sector was challenged to find innovative ways to collaboratively tackle the impact.
The South African BPO sector has managed well over the lockdown period, he states.
“Through the partnership between BPESA, national government via the DTIC, and social partner Harambee, and with access to the Presidential Public Private Growth Initiative and Business Unity South Africa, we managed to have the sector deemed essential services at the start of the lockdown.
“The result is that South Africa managed to continue to serve local South African customers as well as international clients and customers. The collaborative response from industry, working together to support one another, saw a mass deployment of staff to work-from-home (WFH) within a very short space of time.
“The global client and analyst community have been exceedingly complementary as to how the South African GBS sector reacted with agility and ensured that where other offshore destinations struggled with business continuity, South Africa continued.
“The sector has been responsible in taking a ‘people first’ approach and continues to ensure compliance to the GBS COVID-19 health and safety protocol, which BPESA developed in collaboration with industry at the start of the lockdown.
“Weekly reports of compliance as mandated by [trade and industry] minister [Ebrahim] Patel are collected by BPESA, collated and submitted to the DTIC each week. Reports show lower than national average infections and approximately 60% of staff are currently back in the office (on-premises) and 40% continue to WFH across both domestic and international.”
Searle believes SA has a substantial offering as a high-quality, affordable BPO destination, with the biggest asset being the people.
“The abundance of empathetic, solutions-oriented skills allows for clients to offshore many aspects of their business from traditional voice-based customer service and sales through to more in-depth shared services and back-office, and increasingly their digital requirements.”
A list of SA’s value propositions:
- Leading global delivery location for customer experience (CX), niche domain and next-generation digital services: A fast-growing, world-class global business services location, achieving consistent recognition, driven by availability of an accent-neutral and empathic large workforce with niche domain skills, government support with improved access and enhanced enabling infrastructure.
- Superior digital CX and employee experience.
- Sophisticated and resilient infrastructure: Well-planned and unambiguous implementation of the nation-wide lockdown during COVID-19 and significant mobilisation efforts to ensure communication across the industry.
- Strong foundation in contact centres and niche areas: Deep domain knowledge in financial services, global delivery expansion from contact centres, to non-traditional areas such as legal and healthcare, game development, mass communication and broadcasting and learning management.
- Skilled and young English-speaking workforce with cultural alignment to source markets: Fluent English-speaking talent with neutral accent and high empathy levels, cultural affinity with the UK, Australia and, increasingly, the US.
- Sizeable regional and domestic market opportunity: Gateway to the African continent, large domestic market with increasing demand across telecom and retail industries, and growing demand for digital solutions such as mobile payment systems, big data and analytics.
- Significant cost savings: 60-70% lower costs than the UK and Australia, 25-35% lower than leading locations, with incentives further reducing costs to bring them in the range of the Philippines and India.