Outsourcing Guides
Thinking of outsourcing to South Africa? Here’s how to decide if it’s the right choice for you and to have the best chance of success
At a time of economic uncertainty, rising prices and shrinking profit margins, businesses need to get creative in how they manage operations. With digital technology transforming all industries, businesses need access to a wider range of skills than ever before. However, with many of those skills being in specialist areas with limited talent sourcing those skills, let alone paying for them, is no easy task. One way to solve that challenge comes from outsourcing to South Africa.
The rise of outsourcing
Business process outsourcing (BPO) is nothing new. As the world’s economies became more globalised, businesses in the West capitalised on lower wages in developing countries by offshoring whole departments overseas. Functions such as customer service became fully outsourced, with customers increasingly becoming used to hearing foreign accents on the end of the line when they called in with a query.
Through the 90s, the BPO sector became increasingly industrialised with large-scale outsourcing hubs springing up in countries such as India and the Philippines, servicing businesses around the world 24/7.
For those businesses that chose such services, the payback came through great savings and the ability to concentrate on other areas of the business.
As technologies evolved, more and more functions began to be outsourced. Operations in developing countries sprang up offering everything from customer service centres, business support, financial management and even content marketing.
However, set against those savings were questions of quality and customer satisfaction. Using foreign workers, with often a basic understanding of English, meant quality became unreliable. Customers also complained about communication difficulties and delays when calling hotlines.
The rise of cybercrime and business fraud also heightened operational risks. Scammers posing as outsourced call centre workers became a growing challenge and impacted the reputation of the businesses they impersonated. Pressure grew on businesses to return operations to the UK.
South Africa’s outsourcing model
The main calculation when considering business process outsourcing, then, has traditionally been one of costs versus quality. Businesses would ask themselves these questions:
- How much can we expect to save?
- Will customers accept it?
- Can we accept the reduction in quality that comes as a result?
- Can we mitigate against any fraud or cyber risks?
Those who opted for outsourcing would therefore calculate that the reduction in quality might be minimal or acceptable, given the cost savings elsewhere. Increasingly, these days, that calculation is becoming less unsustainable.
Competition is growing, and as it does, customers are becoming more demanding. Any disgruntled customer who wants to take their business elsewhere can now do so, and many have. According to recent data, more than half of customers rate the quality of service as being even more important than the quality of the product. So no matter how great your product is, if you don’t treat your customers fairly, you won’t keep them too long.
Many businesses, most notably BT and Santander, made a great deal about relocating their customer service operations back to the UK and making sure all calls were answered by someone in the same country.
In developing its business process outsourcing offering, South Africa recognised these complaints and developed a new approach – one in which businesses no longer needed to choose between quality and costs.
Labour costs in South Africa
Generally speaking, the costs of hiring people in South Africa are slightly higher than in places such as India or the Philippines. In South Africa, the average monthly wage is between ZAR17,000 and ZAR22,000 or between $900 and $1,150. Minimum wages in South Africa are down at around $1.5 per hour.
Average wages in India are much lower, at between $300 and $420 per month, and minimum wages can be as low as a couple of dollars per day.
In comparison with the UK, though, South Africa still represents a massive discount, especially when it comes to minimum wages, which, as of April 2025, had reached £12.25 per hour. Average wages will be between 50% and 70% of equivalents in the UK, depending on the sector, job level and location.
For all jobs, therefore, you can expect much more value for money than in the UK and with that comes the promise of higher quality.
Firstly, all those problems of poor communication should not apply. English is spoken fluently across South Africa, together with other European and African languages. The country’s culture also has many similarities to the West, which helps customer service agents build connections with customers.
South Africa also benefits from world-class infrastructure, with high-speed internet being the
norm across all major cities. BPO companies have put quality at the heart of their offering, which means hiring companies can expect to be given all the resources to maintain service levels. That means no frustrating delays or disruptions in service delivery. South Africa has worked hard to earn its reputation for ensuring the end customer will notice little difference between South African and domestic service provisions.
Full-service outsourcing
South Africa’s real point of difference, though, stems from the depth and breadth of its workforce. The country has more than 200,000 graduates, all of whom are hungry for work. However, unemployment levels are high, which means many of those graduates will be tempted to look overseas to fulfil their career aspirations.
For the South African government, the fastest way to give these graduates the jobs they need is to bring them in from overseas. For that, they turn to the BPO sector. As technologies improve and communications become faster, BPO companies are offering opportunities beyond the traditional preserves of the sector, such as customer service or call centres.
Today, you can easily outsource advanced and much more senior roles such as legal support, financial services and software development. The rise of remote work and the increasing use of video conferencing, cloud computing and instant messaging mean you can now collaborate with people in real time regardless of whether they are based in the same country.
By offering the chance to outsource senior roles, South Africa’s BPO sector is providing something entirely new to this world and is changing the way the business world views outsourcing. No longer is it just about saving money; it’s also about accessing talent and acquiring skills that might not be available in your local area.
So, for example, if you want to deliver that major software update to keep up with your competition, but can’t find people with the skills to deliver in your local area, finding software developers in South Africa might be the way forward. You’ll find skilled individuals who are ready to work and much more affordable than their counterparts in the UK.
South Africa, therefore, has changed the game for business process outsourcing. Today, the questions you should be asking will include:
- What skills do I need?
- Where can I find them?
- How will they integrate with my existing team?
- How does the cost and quality compare with hiring these professionals directly from home?
Whatever your business size or sector you work in, therefore, South Africa gives you an excellent opportunity to source top-quality talent at a fraction of the price. It’s one of those rare situations in which paying less doesn’t mean you get less.
