South Africa’s BPO sector will contribute widely to the country’s economic recovery
My main focus this year has been ensuring that all our staff are safe, and our business can continue. As we head towards the start of 2021, it’s time to look ahead to the future of the BPO industry and the country.
In October, South Africa’s Government laid out ambitious plans to shore up employment in the wake of the damage caused by COVID-19. And the Business Process Outsourcing (BPO) sector has a big role in this recovery.
Over the next ten year, the contact centre and BPO market is on target to create more than 750,000 new jobs. The sector has proven a remarkable resilience to the pressures of the pandemic and has a strong basis for growth.
South Africa’s BPO market remains resilient despite the pandemic
In many ways, the pandemic has shown the strength of this industry sector in South Africa. And 2020 marks the third year in a row that South Africa has been recognised as the second-best location for contact centres in the world. This is according to the annual Front Office BPO Omnibus Survey, which consistently places South Africa’s BPO sector second only to India’s. Analysis by consultancy firm McKinsey confirms South Africa’s strength in this sector and recognises the speed with which contact centres responded to the pandemic.
In terms of the current contribution to employment in South Africa, the BPO sector is responsible for more than 270,000 roles in six cities. And in the same way as we do at CCI South Africa, they serve international clients from Europe, North America and the UK among others.
In June 2020, Amazon underscored this analysis by hiring 3,000 South Africans for a new contact centre designed to serve Northern American clients. This means that even the most successful mega-corporations in the world are backing South Africa as an industry leader in a sector that is also growing. Offshore contact centres are growing in popularity as businesses all around the world seek out new ways to structure their services.
South African Government is implementing an employment stimulus plan
All of this is why the BPO sector is integral to the Government’s plans for job creation. In October 2020, the presidential employment stimulus plan was announced, with the Government pledging to support or create around 800,000 jobs. To do so, they are relying on major industries across the country to take advantage of grants and do everything they can to meet their targets.
On 1 December 2020, a statement was released confirming that they had achieved 400,000 jobs and are on target to meet their entire target. South Africa’s BPO sector is worth R7.8 billion ($461 million). to the country’s economy. From this, approximately R4.6 billion ($272 million) is from traditional services, with the rest from Business Process as a Service (BPaaS).
There are more than 100 local and international BPO providers in South Africa, thanks in part to the long-running support from the Government. And from 2021 onwards, there are two paths to growth and more success: funding the growth of BPaaS strategies and scaling services towards the international market. We must build on our popularity with English speaking countries, who are an increasing client base. Currently, 63% of offshore business comes from the UK, with the US and Canada responsible for 18% and Australia 11%.
The sector can leverage these advantages and push harder for international clients seeking cost-effective but high-quality outsourcing.