Outsourcing Guides
Excellent infrastructure, a skilled workforce, and best-in-class customer service – just some of the reasons to outsource in South Africa.
South Africa is the rising star of the business process outsourcing world. As businesses in Europe and the UK seek to streamline operations without affecting the quality of their end product, many are looking to outsource key business functions. However, the reasons why they are outsourcing are changing. No longer is it all about the bottom line. Today, it’s a blended proposition to access top talent and transform the way in which business is run.
Saving money
Having argued that money is not the only motivation for outsourcing, it’s important to acknowledge that it remains a major factor. However, the level of cost savings will be different in South Africa.
Labour costs in traditional outsourcing destinations such as India, for example, are a fraction of the levels in the West. Average wages in India are around £250 per month. Employees in the UK benefit from a minimum hourly wage of £11.50 compared to just £1.50 in India. For any company looking to shift business processes to India, therefore, the savings can be immense.
All of which explains why some companies continue to outsource to India even in the face of customer complaints.
South Africa’s labour costs will be much higher than India’s, so the savings are that much smaller. Even so, they still represent a significant discount compared to the UK. Just how much of a discount depends on the type of role and the location of the outsourced employees. The cost of living in South Africa can vary significantly from one city to another, so the final cost of your employees might vary depending on where you go.
In general, though, labour costs average out at about 50% to 70% of the levels in the UK.
Furthermore, the overall ROI can also be impacted by government support. A business creating jobs in South Africa can expect to benefit from generous grants or tax credits, depending on the number of jobs being created and the type of work being outsourced.
The value of these incentives is not to be sniffed at. In some cases, once they are taken into account, the overall cost of hiring people in South Africa could be almost as low as in India.
Hiring staff in South Africa, therefore, is about optimising rather than slashing operating costs. You’re looking to save money compared to your domestic market, but accept a slightly higher cost than in places such as India.
Accessing talent
A key point of difference for outsourcing in South Africa is the depth of talent. The number of people graduating with degrees or professional qualifications is at an all-time high, which has created a highly talented, diverse, and upwardly mobile workforce keen for opportunities that match their ambition.
However, this workforce struggles to find sufficient high-paying opportunities in their home economy, which has encouraged them to look overseas. South Africa’s government, therefore, sees the outsourcing industry as a way to stem that brain drain by bringing foreign jobs to domestic professionals rather than the other way around.
This is a perfect option for small businesses that might be struggling to attract top talent. Competition for talent has become intense, with many SMEs being priced out of top talent. Digital transformation means businesses routinely need a wider range of skills and expertise than they will have in-house. For many businesses, it’s simply not possible to find people with the talent they need within their local area.
Casting the net out to South Africa provides access to an entire market’s worth of highly skilled professionals. And, thanks to the aforementioned digital transformation, collaborating with them via instant messenger or video conferencing has never been faster or easier.
To that end, businesses are working with multi–national teams and outsourcing business operations that would never have been outsourced previously. Rather than just focusing on low-level or customer-facing roles, it is now possible to outsource professionals at all levels.
Maintain quality
South Africa has found a place for itself in the BPO world thanks to its ability to maintain high quality in outsourced operations. Businesses have been scarred by customer complaints and poor levels of customer service from previous outsourcing operations. Many of the largest companies have returned jobs to the UK market, tail between their legs, in the face of customer complaints.
South Africa offers a new model for outsourcing in which saving money does not mean compromising on quality. With English being fluently spoken across the country, outsourcing in South Africa avoids many of the communication challenges that have plagued the BPO sector in the past.
A good time zone match for the UK and Europe also reduces friction and disruption when working with outsourced employees, which means work can be done much more quickly and easily than was once the case. There’s no need to wait a day for outsourced employees to get to their desks. Collaboration can now happen quickly and seamlessly in real time.
Safeguard customer data
South Africa has also emphasized good governance and cybersecurity. While some BPO operations have suffered from data leaks and instances of cyber fraud, outsourcing companies in South Africa benefit from best-in-class cyber resilience measures, including end-to-end encryption and prompt breach resolutions.
The country’s data protection act mirrors leading regulations around the world, such as GDPR, which means businesses can move data in and out of South African jurisdiction safely and securely.
Ensure round-the-clock support
For those countries that have a bigger time difference with South Africa, the country can provide out-of-hours support services, enabling businesses to provide 24/7 coverage to their domestic users. This can work in tandem with their own in-house customer service operations, taking over when they log off to ensure customers can continue to get support right through the night.
Wherever you are in the world, South Africa offers an exciting option for all your outsourcing needs. It saves money, provides access to new talent, and gives you everything you need to thrive in an increasingly busy and challenging workplace.
