Outsourcing Guides
When you outsource to South Africa, you can save money while maintaining a high quality of service.
There is a common business saying in tough times – ‘let’s do more with less’. In other words, while we might not be able to afford the same resources, we’re still expecting you to achieve a higher outcome. It sounds counterintuitive and, in most cases, it is. Cutting costs comes with an inevitable impact on the quality of the result.
For a long time, that was the deal that businesses accepted when they decided to outsource. Large firms such as BT, Aviva and Microsoft all outsourced operations such as customer call centres to third-party companies in low-wage countries such as India and the Philippines.
The complaints from customers were quick to come, with people complaining about long wait times, poor levels of customer service, communication difficulties and fears for data security. Some companies, such as Aviva, quickly changed course and relocated operations back in-house. For others, the savings justify the backlash.
There is, though, another option – one which allows companies to save money on labour without suffering a backlash from customers. Countries such as South Africa offer an in–between option. Wages are higher than in India but are still barely half the levels of the UK, which still provides access to highly affordable labour.
However, it has several advantages which set it apart from lower-cost competitors.
•Language skills: English is spoken fluently across South Africa with a clear, easy–to–understand accent, which negates many of the communication struggles that have plagued outsourced call centres in the past.
•Time zone: South Africa is only a couple of hours ahead of Europe, compared to four hours in India. Working days match up well, which allows for fluid and seamless collaboration.
•Governance: South Africa prides itself on its strong governance with robust regulations and infrastructure designed to prevent data loss and counter cybercrime.
•Technology: South Africa has invested heavily in digital technology, with superfast broadband being the norm across all major cities. South African outsourcing firms can now support their overseas customers with best-in-class technological solutions such as AI, cloud computing, machine learning and video conferencing.
These advantages have seen it emerge as one of the leading BPO sectors in the world. The sector has been growing at more than 10% year on year over the last decade, during which time it has twice been named global outsourcing destination of the year.
South Africa’s success stems from a new approach to business process outsourcing, which focuses less on the cost of wages and more on the total picture. Rather than saving money on what some companies perceive as low-value operations, outsourcing is becoming about providing affordable but high-quality services which provide customers with the personalised and rewarding experience they expect from your business.
How to outsource to South Africa
The first step is to analyse your existing business processes and identify those which have scope for outsourcing. Common options include customer service, IT support, business process administration, or call centres. As with most outsourcing options, there is a range of specialist business process outsourcing companies available, each of which offers prepackaged solutions for one or more of these functions.
The key issue is to determine the quality of the result. How experienced are the people who will be working for you? What is their level of English proficiency? Do they speak with a heavy accent? Are they highly educated, and do they have expertise in your area of business? This will give you an idea of what kind of quality you can expect.
One of the downsides of conventional BPO companies is the limited choice they offer in hiring. They tend to have their own employees who will be assigned to your business. Compared to a full-time employee, therefore, they will have limited knowledge about your product and will not be fully engaged. This can show through in the customer service experience with operators struggling to strike up natural relationships with clients or recommend appropriate products or services for them.
Although you are outsourcing to a third country, the appeal of South Africa is supposed to be that the difference between an outsourced and in-house team should be negligible.
To get full value, therefore, it pays to have as much control over the hiring process as possible. Switching from a BPO company to an Employer of Record can provide that control. An EOR serves as the legal employer for your locally based staff, but they let you work with workers in much the same way as I they were your own employees. You manage the day-to-day relationship, scheduling and assignment of tasks. Most EORs should give you a good degree of control over the selection process, giving you a chance to build a team to your liking.
The cost of outsourcing
Once you’ve decided on what roles you want to outsource and the composition of your team, you need to focus on the true costs of doing business. The cost of outsourcing will include the wages of your workers and the service fee of the BPO provider or EOR. This will generally cover the salaries of the workers and a service fee. Make sure you understand any additional or hidden fees. Some companies may also offer tiered services, with a more comprehensive offering being available in return for a higher fee. Once you have that, you can calculate the true cost of outsourcing compared with domestic hiring.
Other factors might affect the overall cost, including any government grants or subsidies. Your outsourcing partner should be able to provide advice on what’s available and how these might further improve the return on investment of this operation.
Building your team
Outsourcing can be a progressive exercise, starting out small and extending across wider areas of the business. South Africa has proved to be an attractive outsourcing location for UK businesses of all kinds as they seek to outsource much more senior tasks than before. As you become comfortable working with South African employees, you can scale operations up or down as you wish. You can add multiple disciplines and build a diverse team that can supplement operations back home. In doing so, you will not only save money but you’ll benefit from new skills, perspectives and expertise that can drive your business forward in many unexpected ways.
