For a long time, India and the Philippines dominated the global business process outsourcing market, but now there’s a new kid on the block.
Traditionally, business process outsourcing has had one overriding goal: to save money. By shipping certain business operations overseas, such as customer service, you could benefit from lower operating costs. Businesses traditionally accepted that those savings came with an inevitable sacrifice in the quality of those services, but for many, that was a sacrifice they were prepared to make.
However, faster digital communications, evolving markets, and an increasingly demanding customer base mean that for many, that sacrifice is no longer paying
dividends. There is a pressing need for outsourcing options that enable businesses to maintain the high levels of service their customers expect and demand. In the last few years, South Africa has stepped forward to meet that need.
The emphasis on quality
As the UK’s major corporations increasingly shifted jobs overseas, the backlash from customers became ever more vocal. The prospect of well-known corporations taking jobs out of the UK was never the greatest PR move. Worse still, the customer experience was often poor, with customers finding it difficult to understand operators with poor levels of spoken English or thick accents.
It sent a clear message to customers – this company values saving money over providing you with good service. For many people, this was a sacrifice they were
unwilling to tolerate, and they voted with their feet.
So too did some of those outsourcing customers, with some major corporations sheepishly relocating services back into their domestic markets. Other companies proudly made marketing capital of their commitment to keeping customer service operations based firmly in the local area.
Even so, the cost pressures on businesses have grown. Profit margins are slimming down, and for many, outsourcing is the only way to control costs and keep the business sustainable. For that reason, many companies continue to bite the bullet and maintain outsourcing in the face of customer dissent. In January 2025, Sky became the latest brand to make the move.
The risks such companies are taking are real. Customer experience has become a mission-critical metric for businesses. Get it right and you will build customer
retention and increase revenue per customer. Get it wrong and they will abandon you for the competition.
If only there were some way that these companies could have their cake and eat it. If only there were a location where they could benefit from lower costs without sacrificing quality.
Step forward, South Africa. The last decade has seen the BPO sector in the country explode, driven by customer demand and government support. In doing so, it
promises to transform the outsourcing sector as we know it.
South Africa’s unique proposition
South Africa is a unique place to give businesses the alternative outsourcing solution they have been waiting for.
English is widely spoken. Most people speak it fluently with a clear, neutral accent that’s easy for customers to understand. There are none of no comprehension
barriers we’ve come to expect from outsourced services. No straining to work out what the agent is telling you. Communication is as easy as if you were speaking to an operator in your home country.
It benefits from a perfect location, ideally placed for both the European and Middle Eastern markets. With only a couple of hours’ difference between both regions, BPO services are ideally placed for regular working hours.
The workforce is young, diverse, and educated. South Africa has invested heavily in its workforce in recent years. Further education rates a on the up with an increase in graduates possessing skills across all industries. Whatever the sector or job role you’re looking for, South Africa has talented people waiting to offer their services. For the South African government, the BPO sector represents an excellent way to provide that talented workforce with the well-paying jobs they are looking for and so keep them in the domestic economy.
Because of that, South Africa’s government has spared no effort in supporting the sector. Businesses that offer jobs for South Africans can expect to benefit from a host of incentives, tax breaks, and grants, even more so if they locate themselves in an area with low levels of employment.
Best of all, that skilled, diverse workforce comes at a substantial discount. Although wages are higher in South Africa than in some of the traditional outsourcing
powerhouses, they are still around 60% of the levels in the UK or Europe. With government support thrown in, they may even rank as the cheapest.
The statistics speak for themselves. According to Ground View Research, the BPO market is expected to grow at an annual rate of more than 10%, reaching USD3.1 Bn by 2030. Operational costs in South Africa are up to 40% lower. Global firms such as Deloitte, IBM, and Capgemini have all expanded their operations in recent years. In 2016 and 2018, South Africa was named the UK offshoring destination of the year. The country surpassed India as the outsourcing destination of choice.
Beyond customer service
Traditionally, the BPO sector has been synonymous with customer service and other client-facing solutions. While sectors such as call centres and IT support are still the main reason why companies outsource to South Africa, that’s beginning to change.
Faster internet connections, the rise of cloud computing, and South Africa’s growing depth of talent create opportunities across a host of industries. For instance, if you’re struggling to find someone to help build new software, South Africa could be an
answer.
Domestically, software developers can command prohibitively high prices for some small and medium-sized businesses. South Africa offers up the prospect of sourcing high-quality professionals at a substantial discount. The lower cost of living in South Africa translates to lower wages, making freelancers much more affordable.
South Africa’s matching time zone, as well as an increasingly robust technological infrastructure, make for fast and simple collaboration in which freelancers can quickly become an extension of your team.
This helps to level the playing field for UK businesses, who can access a range of skilled individuals on a much more competitive basis. It’s changing the game for outsourcing, opening up a global labour market that can help businesses become much more agile and responsive.
With South Africa’s government proving to be extremely welcoming for the outsourcing industry, there has never been a better time to start building an
outsourced team in South Africa.
