South Africa is the fastest-growing outsourcing destination in the USA and the third biggest destination in the UK – here’s why.
As South Africa’s government attempts to supercharge growth, attention has grown to business process outsourcing. The market has grown by more than 40% in the past decade and the government has invested billions in terms of incentives. For businesses in the UK, Europe, US, and Australia the country is now becoming the go-to location for all outsourced operations. Businesses of all kinds are outsourcing all sorts of roles, and when you look at the options within the country, it’s not hard to see why. Here are six reasons why you might consider following their lead.
Low costs
The primary motivational force behind business process outsourcing remains cost. Businesses are constantly looking for ways to save costs. With margins being squeezed on all sides, companies are on the lookout for any way to save money without compromising on customer service.
Traditional powerhouses such as the Philippines and India are still hard to beat when looking at the cost of labor alone, but South Africa is still much cheaper than the UK, US, Australia, and Europe. If you’re looking to save money, but are worried about the impact on your customer satisfaction ratings South Africa could be a chance to have your cake and eat it.
Customer demand
While cost remains a driver, attitudes to outsourcing have changed over the last few years. Customers reacted negatively to seeing key processes – particularly customer service operations – outsourced to countries in which English was not the first language. Frustration at trying to make themselves understood by call center operatives led many to vote with their wallets. Multiple customer service surveys suggest consumers prefer to support businesses whose call center operations are domestically based – or failing that use fluent English speakers.
Businesses have responded to that demand with many such as BT choosing to relocate call centre operations back to the UK. The price of labor might be low in locations such as the Philippines, but once businesses began to count the cost of customer friction and lost revenue, the savings quickly lost their appeal. Indeed, for some, the fact that call centers had local staff became a core marketing message.
South Africa, offered a middle ground. It’s a chance to enjoy relatively affordable labor costs while maintaining a high level of customer service. Furthermore, once you consider government support, South Africa becomes much more appealing.
Government support
The great news for any company looking to outsource to South Africa is that the government is keen to have you. As authorities in South Africa look for any opportunity to promote growth and international investment, their attention has swung towards the business processing outsourcing sector. Billions have been invested over the last few years in the form of tax breaks and other incentives.
Any business employing more than a certain number of South Africans will be welcomed with open
arms. The Global Business Services (GBS) Incentive a range of grants in proportion to the number of South Africans employed. Once these costs have been factored in, the cost of la