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Offshore outsourcing can be a great way to save money on labor costs, open up a wider talent pool, or even expand into another country.

Offshore outsourcing is nothing new. Businesses have been doing it for decades, but the market is changing in scale, nature, and the type of roles that are being outsourced. Technological advances are making the world smaller, breaking down barriers, and reducing limitations on who a company works with or where its staff should be based. At the same time, evolving markets and changing customer expectations are opening up more opportunities and changing business attitudes to what they expect from outsourcing.

What is offshore outsourcing?

Offshore outsourcing is the practice of moving some or all of a company’s operations overseas. Companies will hire a separate company to manage operations that would normally be managed entirely in-house. It has normally been seen as a way to reduce costs by taking advantage of lower labor costs. However, it can also open up new talent pools, and provide new ways of engaging with your customers.

Common examples of outsourcing include call centers, support desks, or financial services. However, as technology becomes more sophisticated, companies here in the UK are finding opportunities to work with a much wider range of service providers in professional industries such as marketing, IT, or software development. As the market evolves so too are some of the main advantages.

Value for money

The most common motivation behind outsourcing remains the chance to benefit from lower labor costs. Countries such as India and the Philippines have always led the market thanks to low average wages within the country. Call centre staff, from India, can be hired at a fraction of the cost of their counterparts in the UK.

Some countries may also offer more favorable taxation conditions or labor laws making them ideal partners. With English being commonly spoken across the world, many basic functions such as customer service or technical support roles could be delivered easily from any location.

In an environment in which profit margins have been tightening outsourcing represents an opportunity to save money.

Broadening the talent pool

A more globalized economy is leading to a more globalized workforce. Today a business needn’t be constrained by the talent in their local areas. They can reach out and engage with any professionals anywhere they want. Faster telecommunications make it possible to collaborate instantly with people by video link and instant messaging. By casting the recruitment net wider you can build the team you want rather than make do with the local talent available.

Engaging the services of foreign talent can also introduce other cultures and perspectives into your operations, all of which can open up a host of surprising opportunities.

Expanding into new markets

Offshore outsourcing can be the first step towards global expansion. It can open up new markets, new customer bases, and new revenue opportunities. Expanding into a new country can be risky, especially if you have no knowledge of the market and how it operates.

Using employees from that country enables you to benefit from their local knowledge. It provides you with the flexibility to adapt your product or service to the demands of that market raising your chances of success.

24/7 availability

Customers are becoming increasingly demanding. They expect round-the-clock support. Time differences in outsourcing locations mean you can easily provide out-of-hours services without having to develop a costly 24-hour operation in the UK. Good outsourcing companies can provide access to trained and highly professional staff to handle any inquiry.

You could combine an outsourced call center with operations in your home country – switching between the two seamlessly to provide continuous customer service throughout the day and night.

Expertise and the latest technology

Handing over operations to specialist companies means you can capitalise on their specialist knowledge and technology. For example, a specialist financial company will have dedicated financial and customer services working with the latest finance software to deliver first-class customer service.

Handling these operations in-house often leaves you having to make do with existing staff and old-fashioned outdated technology. Hiring specialists means you can benefit from sector-specific specialists and state-of-the-art technology to deliver better and more fulfilling customer services.

Things to watch out for

Outsourcing, of course, does not come without its challenges. Engaging staff from a foreign country has logistical, operational, and in some cases reputational risks. When employing someone from overseas you’ll have to comply with all relevant employment laws and regulations. Working in a new and unfamiliar country will include a host of challenges and risks. It will be all too easy to make unintentional compliance errors or fail to keep up with changes to local regulations.

Setting up legal entities in those countries can also be costly and time-consuming. It requires a certain commitment in terms of resources.

Working with a local outsourcing partner can help with both challenges. They will have local knowledge of the market and regulations and can help you avoid any mishaps. They can also provide skilled qualified staff and manage the day-to-day requirements of managing employees without you needing to set up a legal entity.

One way to do this is through an Employer of Record company (EOR). The EOR will hire specialist staff who have a full understanding of local laws and can keep up with any regulatory changes. The EOR will be the legal employer of your staff which means liability will rest with them.

Choosing your country

When choosing offshore outsourcing, you will also have to pay close attention to your choice of country. Destinations such as India are very low cost but cause friction with customers due to language barriers. Although English is widely spoken, accents can be hard to understand over the phone.

More recently, destinations such as South Africa have come to the fore. Labor costs are between 40% and 60% of that of the UK which means it’s still a cost-effective solution. However, English is widely spoken with a clear and understandable accent. The country is also a good cultural match for the UK which makes it easier for call centre agents to engage with customers on a deeper level. It offers the perfect mix of affordability, access to talent, and a time zone and cultural match to help you get the most out of your outsourcing strategies.

There are, therefore, many advantages of offshore outsourcing. It can save money, open up new opportunities, and build longer-lasting and more profitable relationships with your customers. Support from a dedicated EOR can help you manage compliance, recruitment, and ongoing support to ensure a profitable and successful outsourcing strategy.

To find out more download this free PDF guide.

Are you looking at hiring employees in South Africa? If so, here’s everything you need to know.

South Africa is one of the fastest-growing business process outsourcing destinations in the world. Low labor costs, excellent infrastructure, and a diverse highly qualified workforce make for the perfect ingredients for businesses of all sizes. If you and your business plan to be among the many making their way out there here’s everything you need to know about hiring, paying, and managing your employees.

Why South Africa

South Africa has an enormous amount going for it. The workforce is diverse, young, and highly educated. Professionals can be found across a wide range of disciplines which means there are opportunities across all job roles and sectors. The cost of living in South Africa is lower. Although it is rising with an upward pressure on wages cities such as Cape Town, Durban, and Johannesburg are still among the cheapest places to live in the world.

Foreign companies, therefore, can benefit from a highly skilled and dedicated workforce that comes at a relative price premium compared to their domestic markets. Faster communications also mean they have access to a wider range of talent which enables them to reach out to professionals and contractors with skills that might not be available within their location.

South Africa’s highly professional talent base is being mined by companies all around the world as they seek to expand outsourcing into areas that were previously out of reach. It is no longer just a low-cost enterprise – it’s an option that can truly broaden the horizons of companies and open up a wealth of new opportunities.

Those opportunities are supported by an incredibly welcoming regulatory environment. Business process outsourcing has become the country’s top export. It generates thousands of new jobs every year and has promoted a huge influx of capital into the economy, something that South Africa’s growth-friendly government is keen to encourage.

The economy is growing making South Africa an attractive and thriving market in its own right. Growing disposable incomes and a familiar culture means there is a ready market for many Western products and services. However, the real value lies in South Africa’s status as the gateway to Africa. Succeed here and other equally lucrative markets across the continent can open up.

Whatever your company’s outsourcing goals, therefore, South Africa represents an extremely attractive proposition. There is a good supply of talent, good communications and IT infrastructure and supportive government policies. It should come as no surprise, therefore, that South Africa is fast becoming one of the most popular outsourcing destinations in the world. It offers a truly multidimensional proposition in which companies no longer have to choose between price and quality.

Hiring employees in South Africa

Companies looking to outsource to South Africa can benefit from a host of tax breaks and other incentives including grants for those companies that create new jobs for South Africans. Taking these grants into consideration, the final price paid for South African workers can help it compete with almost any destination out there.

The basics

Before you start hiring in South Africa it pays to understand a few basics about the country and the workforce.

• Currency: The main currency is ZAR – the current exchange rate is 1ZAR to £0.044

• Language: South Africa has 11 main languages including Xhoza, Zulu, Africaans and English. However, English is commonly spoken with most people in South Africa being highly proficient.

• Holidays: There are 14 public holidays in South Africa and workers are entitled to 21 days of paid annual leave.

• Maternity leave: Workers are entitled to up to four months of maternity leave which should start at least four weeks before giving birth.

Many South African employees have non-compete agreements which means they may not be able to work for a competing company for periods of between six and 12 months. When looking to hire staff from competing companies it’s worth understanding the contents of any such agreements.

Setting up your business

Outsourcing to Africa can be done in several ways.

Using an outsourcing company: Many companies provide outsourcing services such as call centers to clients in the UK. These companies have their own trained staff, but they will not be controlled by you and will not have dedicated knowledge of your product.

Set up a legal entity: The standard approach to hiring South African staff has been to set up a legal entity in the country – such as a foreign branch or a subsidiary. You will be directly employing staff and will have to set up a supporting infrastructure to manage their employment including details such as managing PAYE, employment rights, and ensuring everyone is classified correctly. This can cost money and without local knowledge can open you up to several compliance risks.

Employer of Record: Rather than the time, effort, and money of setting up a subsidiary, you can engage the services of an employer of record (EOR). They serve as the legal employer of staff in South Africa and handle all the administrative, financial, and legal details of your

employees. You benefit from local knowledge and understanding of employment law to eliminate exposure to compliance risks. As the legal employer of your South African workforce, they will also assume any liability for compliance issues which means they take on all the work and the risk.

Professional Employers Association (PEA): A Professional Employer’s Association works in much the same way as an EOR, and they are often described in the same way. However, unlike an EOR PEO will be a joint employee along with you. That means they will take on the administrative duties of handling employment while you manage the day-to-day relationship. They have the same advantages in terms of taking on the workload of managing staff but do not remove legal liability. It’s a lot like having access to your in-country HR department with specialist local knowledge of the market.

You can work with an EOR in several ways. A standard approach is to pay a flat fee per employee for which the EOR will perform duties such as:

• Pre-employment screening including referencing, identity, and qualification checks. This will generally incur a one-off fee.

• Onboarding including drawing up contracts, managing inductions, and setting up Payroll.  

• Dealing with any disciplinary procedures and grievance processes. They will also manage the termination of employment when necessary.

Some may also offer remote employee software for a small additional fee. They may also offer customized services including help with recruitment and sourcing staff. These arrangements can be customized to a fee based on your personal use.

Contractors and freelancers

An alternative to full-time staff is to hire freelancers and contractors. The freelance market is booming in South Africa with professionals available in all disciplines. Freelancers can be engaged on a contract-by-contract basis. They will generally perform a set piece of work and set payment terms on a case-by-case basis. Payment can be arranged by several methods including bank transfer, international payment platforms, mobile payments, or money orders, depending on the freelancer’s preferences.

Faster communications make it easier to work with freelancers from around the world including in South Africa, while faster payment methods also reduce barriers to payment and broaden your talent pool.

For more regular work many employ a contractor. They may perform work for you over a prolonged period but might not be restricted exclusively to your company. They may work remotely or on-site at your business premises.

However, the more regular your working relationship becomes with a contractor, the more important it is to monitor how the employment is classified. South Africa is cracking down on practices of disguised employment in which companies try to classify defacto employees as contractors to avoid all the expenses that come with full-time employment.

An Agent of Record can help you to manage that relationship and ensure contractors are classified correctly. It manages details such as onboarding, contract development, background checks, and screening. It’s a great option for those who regularly work with contractors and want to make sure that they get the relationship right.

If you want to hire employees in South Africa, then, there are many different options. Which one is right for you will depend on your type of business, strategy, and what stage of the process you’re at.

South Africa is fast establishing itself as a business process outsourcing hub but if you’re looking to hire people, you have to ensure they are paid correctly.

A diverse and highly qualified workforce, a welcoming business environment and a relatively low cost of doing business make South Africa one of the most attractive business process outsourcing locations in the world – one that is fast-challenging traditional powerhouses such as India or the Philippines. Businesses from across Europe, the US, Australia, and the Middle East are pumping millions into the country and creating thousands of jobs. If you’re one of them then you need to understand the best ways to make sure all employees are classified correctly.

The basics

First, let’s understand the basics:

• Payment timings: As an employer, you should make sure all employees are paid within seven days of the end of a payment period. In practical terms, you should have a set date every month or week and make sure all employees understand when their wages will be processed. Failure to adhere to a set date could cause compliance issues and will have your employees looking elsewhere. There is no set payroll cycle but this will normally be established in the employment contract and could be monthly, weekly, or even daily. In most cases, employees will expect to be paid monthly on the 25^th day of each month.

• How to pay: Paying employees can be done in the same ways as in most other countries – namely cash, cheque, or bank transfer. However, South Africa has a relatively high number of so-called unbanked individuals. Almost a quarter of people are not in the system according to an analysis from Oxford Business Group which means it may be difficult to pay them with a conventional bank transfer. It will often be worth having various payment options so people can be paid in a way that works for them. If paying people in cash or cheque you should make payments in the workplace during working hours so you have a clear record of the payment taking place and confirmation of receipt. As with most other countries, employees will expect a payslip on each payday.

• Employer deductions: As an employer, you will be responsible for deducting money from each employee’s wage packet for things such as PAYE, UIF, or any pension fund contributions. You will not normally be able to make any other deductions without written consent.

• 13th-month salary: A 13th-month payment is a discretionary extra payment that comes in December. It is like a bonus. There is no statutory requirement to pay it, but it is traditional in South Africa and is often seen as an expected benefit. How much you pay is up to you, but it is often equivalent to a month’s salary.

• Working time: The standard working week is 45 hours. If an employee works longer, they should be entitled to overtime pay. This is limited to a maximum of ten hours per week.  

• Minimum wage: South Africa has a minimum wage set at 27.48 ZAR per hour, which will normally add up to around 4,397 ZAR per month for a typical 40-hour work week. Any overtime beyond contracted hours will have to be paid at the same time as the regular wage.

Working with contractors

Rapidly improving global IT infrastructure means it’s much easier to work with freelancers and contractors. The working relationship tends to be much looser without the obligations to manage PAYE or other deductions or provide employee benefits.

The working arrangement will be on a contract-by-contract basis and payment will be by arrangement. Contractors will normally submit an invoice once the work has been done which you can pay in several ways including:

• International bank transfer: A standard way is to arrange a wire transfer from your bank. This might be subject to delays or additional fees depending on the policy of your bank. You could try to set up a local bank to manage all payments and make payments from your main account to a South African account and then onward to the contractor.

• International payment platforms: Digital technology has facilitated the growth of international payment platforms. These small and innovative fintech startups represent an agile alternative to the traditional banking model. They offer a fast and affordable way to quickly send money overseas. Services such as Wise will enable users to benefit from low fees and the bank-to-bank exchange rate which can result in significant savings over time.

• Mobile transactions: With many contractors in South Africa not having a regular bank account, mobile banking apps offer a way to send money directly via a mobile phone. It is an increasingly popular option across Africa.

• Money orders: International money orders represent a traditional and old-school approach of sending money directly through a service such as Western Union to be picked up physically. Money orders are slow and involve wire fees and unfavorable exchange rates, but they may be appropriate for anyone who does not have a bank account.

Whether you choose to hire full-time employees or stick with contractors will depend on your particular strategy and the type of work you’re outsourcing. For example, a growing number of businesses are casting their net wider to search for freelance staff. Video conferencing solutions such as Zoom and instant messaging services mean location is not as important as once it was.

Other companies may initially begin with ad-hoc contracts with freelancers before progressing toward a full-time model.

Whatever option you take you need to stay compliant with all relevant employment regulations particularly how employees are categorized. The government is keen to crack down on practices it sees as disguised employment in which firms try to avoid statutory obligations by classifying defector employees as freelancers.

The ire of the authorities may be drawn if they see workers who are regularly working at an office or appear to be working exclusively with a certain company. High fines can be imposed for noncompliance so companies need to make sure they get all the details right.

Doing so for a foreign company can be difficult which is why many companies outsourcing clients may choose to work through an employment intermediary such as an Employer or Record or a Professional Employer’s Association.

An employer of record will serve as the legal employer of your South African-based staff and will handle all the legal and administrative requirements of the employment. Because they are the employer, they will handle deductions such as PAYE, and manage holiday pay, benefits, and any disciplinary processes. As the legal employer, they will also assume all liability for employees so any compliance issues will be down to them.

A PEO, on the other hand, does much the same role as an EOR, but employment is split between you as the hiring company and the PEO. They will manage the legal and administrative side while you handle the day-to-day management of the employees.

The advantage of these is that they avoid the need for a local entity such as a subsidiary and will handle all the work involved with handling employment. They will take on the work of the HR department, to free you up to focus on driving your business operations forward.

For a more long-term arrangement, though, you may want to take on the additional expense of setting up a South African branch or a local subsidiary. Setting up legal entities will be expensive and involve the hiring of local staff but it will give you more control.

If you’re only using freelance staff, agents of record can help take on the onboarding classification and day-to-day management of staff. Their local knowledge can help manage regulatory compliance and ensure the correct classification of all contractors.

Cost of labor

Wages in South Africa will tend to be much lower than in Europe, the US, Australia, or the Middle East and while they might be higher than in traditional powerhouses such as India, they still represent a considerable discount compared to domestically based workforce.

The cost of living is low with Cape Town Durban and Johannesburg being among the cheapest cities to live in the world. All that means that while a growing economy and rising living costs are driving up wages, South African workers can still afford relatively lower wages compared to other countries and this is likely to continue.

Within that, though, there is some regional variation. Durban and Cape Town in particular are known for being low-cost and with a vibrant highly educated workforce making them ideal outsourcing destinations.

In addition to local pay rates, it can be worthwhile looking at all available government support. In 2023 the BPO industry was credited for creating almost 20,000 jobs and the authorities are keen to encourage further investment with a range of tax breaks, incentives, and grants to companies looking to employ South Africans. These incentives have been credited for bringing overall outsourcing costs in South Africa down to a level comparable with some of the lowest-cost options.

When looking to pay employees in South Africa, therefore, there is a range of factors that might influence your decision. As a business, it pays to do your homework, understand the rules, and make sure you have all the support in place to classify and pay your employees correctly.

The average salary in South Africa is on the rise but is still much lower than in countries such as the UK or other Western economies.

Businesses outsource operations overseas for many reasons. To some, it’s a chance to broaden the talent pool or expand into another country. However, top of any list is the ability to save money and attract staff in a budget-friendly manner. That’s why India and the Philippines have always led the way as outsourcing destinations. However, changing customer demands and evolving business strategies have seen people look towards other locations such as South Africa.

South Africa offers a slightly different proposition from some of the low-cost destinations. While the cost of labor is generally less than in places such as the US, UK, or Australia, it has much more to offer including a highly diverse and educated workforce, friendly regulatory environment, and familiar business culture.

All of this means businesses can outsource all sorts of professional roles from customer services, to marketing, content writing, IT, and much more. Even so, costs will always be a major factor which is why one of the first questions businesses ask when considering outsourcing is what is the average salary in South Africa?

Average salaries

Salaries can vary from profession to profession with some being more competitive than others, compared to Western economies. Halfway through 2024, the average monthly earnings in the formal sector was R27,450, a 4% increase from the same period in 2023.

However, there is a wide variation in salary levels with the top earners bringing in much more than the lowest. Men also have significantly higher salaries than women.

Some of the highest-paid professionals can be found in the IT and finance sectors and levels can vary enormously from one region to another. As such you can only make truly direct comparisons from one industry to another. In call centers, for example, the average starting salary for South African agents was around 30% of that of their counterparts in the UK.

The average salary for IT professionals in South Africa is ZAR 16,400, or £740 per month, while UK workers can expect to earn around £3300.

Costs, therefore, can vary and wages have been rising in the country as the economy picks up. The government has a positive pro-growth agenda and is keen to develop every area of the economy. That means increasing the number of graduates, improving technological infrastructure, and raising the number of highly qualified professionals in the sector.

Even so, generally speaking, there remains a sizeable discount on South African workers compared to the UK. For that businesses can also benefit from everything else that comes from working in South Africa including:

• Educated workforce: University attendance is high leading to a highly diverse and educated workforce across a range of disciplines.

• Good language skills: English is commonly spoken making South African call center agents a great match for customer service roles.

• Good IT structure: High-speed broadband is widely available which makes it easy to communicate via video chat. The time difference is relatively low between the UK and Europe and South Africa which means collaboration is quick and easy.

• Good government support: The regulatory environment couldn’t be much more welcoming with plenty of government support and incentives for any company employing a reasonable number of South Africans.

The business proposition for South Africa is multi-dimensional. Average wages are much lower, but skills and expertise are high, which leads to better quality results. South Africa offers much more value than beyond the simple cost of wages. South Africa’s BPO industry is proud to highlight an 18% higher customer satisfaction rating compared with India.

Unsurprisingly, South Africa is becoming more popular as an outsourcing destination across the West. It’s the third most common outsourcing location in the UK and is the fastest-growing destination in the US. It is tied for second among US companies for outsourcing customer experience operations.

Government support

When assessing costs, it’s also worth looking at more than just the average wage in South Africa. The cost/benefits analysis will also be affected by the impact of government incentives.

The BPO industry has been highlighted by authorities in South Africa as being a highly promising source of growth. For South African workers, BPO jobs also offer well-paid job opportunities with excellent opportunities for progression at all levels. As such the government is keen to support development in this field with a range of tax incentives and grants for foreign companies looking to invest in the country.

The range of incentives has promoted further investment and growth in the country which, in turn, is creating further opportunities and promoting a vibrant and competitive market activity.

However, while the regulatory environment couldn’t be much friendlier, foreign companies will have to make sure they understand and adhere to the rules. Employment law can be strict and the authorities are particularly keen to crack down on any activity they perceive as disguised employment – namely trying to frame regular employees as freelance contractors for tax purposes.

Into the future

The current economic outlook in South Africa, therefore, is incredibly favorable to the BPO market. Talent is freely available, and the quality of services is high, but the cost of labor is still significantly discounted compared to the European, US, and Australian markets. All of this makes for an incredibly attractive proposition and has turned business process outsourcing into South Africa’s number one export.

The question is whether this situation will continue. Growth brings prosperity and with it rising wages. As with other countries, South Africa is experiencing a cost of living crisis with domestic budgets coming under increasing pressure. Wages are rising as the workforce becomes more educated, and ambitious and opportunities present themselves.

Inflationary pressures and a competitive working environment will put upward pressure on wages over the coming years with estimates suggesting average wages could rise by around 6% year on year in 2025 and 2026.

Even so, South Africa remains a much cheaper destination than the West and with faster communications breaking down barriers to collaboration working relationships are becoming more cost-effective as well as more practically manageable.

Today and for the foreseeable future, therefore, South Africa retains all the key ingredients that look set to help it remain at the head of the business process outsourcing industry. In doing so it is reshaping the market from one which focused on low costs to one in which almost any job role could be suitable.

South Africa has changed the decision-making process. Previously CEOs in the West felt that the low costs available in places such as India and the Philippines were worth the sacrifice in terms of quality. Now that’s not a choice they have to make. South Africa represents the ultimate no-compromise destination. Although wages will rise it will retain its status as the future of Business Process Outsourcing.

South Africa is one of the fastest-growing regions for customer support outsourcing. Here’s why.

In 2021 the Annual Font Office Omnibus BPO survey named South Africa as the most favoured offshore CX BPO destination. After three years of hovering around third place, it had finally made the leap to the number one position. The move signals a significant shift in the customer support service – from one in which cost was the primary factor to one that prioritizes quality and service. Today the BPO sector has become South Africa’s biggest export and in the West, it is overtaking India as the preferred outsourcing destination. Here are just a few reasons why it can be a good idea to outsource customer support to South Africa.

Customer service excellence

South Africa has put customer service front and center of its offering. In a world in which customers have increasingly reacted against what they see as poor service quality – especially from outsourced call centers – companies have come to see customer service as a critical sales requirement.

According to data from Zendex, 90% of customers say they would switch companies after a poor customer experience. 43% of customers will be more likely to purchase a good customer experience. Data suggests improving customer service can boost revenue by between 10% and 15%. A growing majority of businesses now say that they compete almost exclusively on customer service.

Even so, India remains a ‘powerhouse of outsourcing’. In 2023 the Indian BPO market was worth USD38bn with an annual growth rate of over 7%. Customers might not like it, but despite all the negative publicity businesses were still willing to take the hit.

All of this is bad news for the traditional outsourcing powerhouse of India which has been dogged by a reputation for poor customer service ever since firms first started to relocate their call centers. centersIt backtracked on its decision and quickly promised that 80% of all its calls would be answered by staff based in the UK. Banks such as Lloyds TSB and Santander also moved their call centres while Aviva moved some operations back to Norwich. Powergen followed suit citing the negative impact on customer service. Businesses such as PlusNet began promoting the fact that their call centers were based in the UK – and picked up plenty of new customers as a result.

By 2006, newspapers such as the Guardian were asking “Is it finally time to hang up on Indian call centers”. The impact on reputation, customer relationships, and revenue began to outstrip the cost-saving benefits.

Their decision stems from the fact that outsourcing as a concept can still be immensely valuable for businesses. It saves money, improves efficiency, and reduces the load on internal operations. It might be a trade-off, but it’s one they are willing to accept.

But what if you didn’t have to make that trade-off – what if it was possible to enjoy all the benefits of outsourcing without the negative?

That’s the sales pitch that comes from South Africa. With a good language match and a familiar culture, outsourcing customer service operations here can be done without any of the communication difficulties that have frustrated customers in other locations.

Businesses are taking note. South Africa is the fastest-growing BPO destination in the USA and is fast becoming the destination of choice in the UK. It has become South Africa’s biggest export.

This surge stems from South Africa’s ability to offer a host of benefits that others cannot match.

Language match

English is widely spoken a clear accent that is easy for domestic customers to understand. Miscommunications are less common and customer agents are better able to relate and empathise with customers. As well as reducing frustration and friction in the customer service experience, the ability to manage open and fluid conversations can increase customer retention and also increase supplementary sales opportunities.

Flexible workloads

Retail businesses can experience fluctuations in their sales depending on all sorts of factors including the weather, product launches, or seasonal sales. Outsourcing some or all of your operations to South Africa makes it easy to scale up or down as required enabling you to avoid call dropouts or frustrating delays.

Time zones

South Africa is only one or two hours ahead of Europe and the UK but has a seven-hour difference from the USA which means it can offer different types of value to different countries. For Europe, a close match to working hours makes it convenient for daytime support, while in the US it can help to cover 24-hour support services meaning customers have a skilled customer service operator on hand at any time.

Commitment to Quality

South African BPO providers pride themselves on offering excellent customer service and high quality at all points. Customer experience ratings are 18% higher for South African companies than for Indian. South African call centers also focus on internationally recognized standards such as ISO certifications to ensure customer service representatives benefit from high levels of training, that data will be held securely, and that all queries will be answered promptly and professionally.

Regulations

The regulatory environment is friendly and offers a good match for Western-based companies. Data protection laws are similar to GDPR making for a seamless transition of data to and from South Africa.

The government has also gone above and beyond to create a welcoming environment for foreign companies looking to invest in the region. Growth is a top priority and companies looking to outsource to South Africa can benefit from a host of tax breaks, incentives, and grants linked to the number of jobs they create.

Education and qualifications

Education is improving in South Africa with a high graduate population covering a host of disciplines. The workforce is young, multi-cultural, and offering expertise across a wide range of industries.

This means customer service representatives can offer a high level of expertise enabling them to assist with more complicated customer service requests. For example, South African call centers can be used to deal with IT support, especially when offering out-of-hours support services to back up domestic support operations back in the host country.

Excellent IT infrastructure

IT infrastructure is excellent across the country, especially in the cities. Faster communication technologies make it easier to communicate cheaper and more efficiently and for South African professionals to collaborate with their counterparts in the host countries.

The country has high-speed connectivity and innovative technological platforms are enabling the industry to power ahead bringing cutting-edge solutions to support their foreign clients.

The faster and more reliable communications become the less of a problem the distance barrier is. Today it’s as easy to collaborate with multidisciplinary across borders as it is with people located in the next town.

Moving customer services to South Africa

The South African BPO market therefore is a major success story – one that according to recent figures is creating 20,000 well-paying jobs in the country every year. The government is looking to build upon its unique value proposition with further investment in government support, technological infrastructure, and training.

As a business, therefore, South Africa not only represents an excellent opportunity in the short term but also in the years to come. However, to maximize South Africa’s potential, it’s important to adopt an effective strategy.

To do that you may consider some of the following questions:

• Location: Different areas of South Africa offer slightly different propositions from an

outsourcing perspective. Durban and Cape Town have become particularly strong customer service hubs thanks to their relatively low cost of doing business, widespread proficiency in English, and highly diverse, multicultural workforce. Both cities also lead the way in technological infrastructure.

• Regulations: whenever you operate in a new country you need to get to grips with the regulatory landscape. South Africa is no different. Labor laws can be strict and are continually evolving. To stay compliant you need a full understanding of existing laws and the ability to keep abreast of any changes. For a foreign country that can be difficult without local help.

• Operating costs: The cost of setting up will depend on many factors including your location the number of South African nationals you plan to employ (which could influence any government support) and your business structure.

To help with each of these you can work with several locally based organizations that can help you manage your expansion into South Africa in a more cost-effective and compliant manner.

• Employer of Record: With an EOR you hand over the work and legal liability of South African employees to a specialist company. It will serve as the legal employee of all your workers which means they are responsible for ensuring all employees receive the right benefits and are classified correctly.

• Professional Employers Organisation: In much the same way as EOR’s PEOs handle the legal and administrative requirements of managing employees. However, the structure is slightly different. Employment is shared between you and the PEO which means you will still have a legal liability in case of non-compliance.

Both options avoid the need to set up a local entity and as such represent a more affordable alternative to setting up a local branch of a subsidiary. It can be a bit like having your own dedicated HR department with the resources and local knowledge to help you meet all your obligations.

For those who work with contractors and freelance, an agent of record (AOR) can handle all the work of onboarding, classification, and managing relationships. It serves the same role as an EOR or PEO but is better suited to companies that will not be working closely with full-time employees.

Which option you choose will depend on the specific goals that come with your expansion. Having the support of a local entity can be a good foundation for a step-by-step expansion which could see you testing the water with a local entity before investing in a full subsidiary.

Whichever way you approach it, therefore, South Africa appears to offer a unique proposition that gives it a special place in the BPO market. It offers something that few others can match: widespread English, a diverse and highly educated workforce, good IT infrastructure and a

welcoming regulatory environment. South Africa has latched upon business process outsourcing as being the key to future growth. With investment growing, and infrastructure developing, the country is quickly establishing a reputation as the world’s go-to customer service provider.

For more information on the opportunities of outsourcing customer service operations to South Africa, download our handy guide.