With the South African employment rate forecast to reach 43% by 2023, the focus has turned to leveraging the country’s strengths on a global level to provide multinationals with a hiring pool that is young, talented, willing to learn, and more cost-effective than what other markets can offer. This is according to Business Process Enabling South Africa (BPESA), the industry association for global business services (GBS) in the country.
With the international community more embracive of impact sourcing (bringing internet-based jobs to disadvantaged communities) and building inclusive supply chains, South Africa is well-positioned to provide them with a platform to do so at scale. Given its commitment to diversity and transformation, outsourcing to the country means this core business focus is met responsibly and transparently.
Expanding workforce
It is anticipated that Africa will soon have the largest workforce on the planet. However, there are simply not enough jobs going around for young people under 25, who constitute 60% of the continent’s population. Especially in South Africa, there is a high availability of proficient English talent, both written and spoken, with neutral accents and very high empathy levels. The country’s current population of English speakers is estimated to be 16.5 million, with 410 000 English-speaking individuals added to the national workforce each year.
“This provides multinationals willing to embrace GBS with a rich enabling environment to do so. Take the country’s speedy response to the pandemic and resultant lockdown, for example. This saw government and enabling bodies taking a strong decision by establishing contact centre services as essential. This not only helped in building a deep sense of confidence about business continuity among existing clients but also attracted new business during a global shutdown,” says Andy Searle, CEO of BPESA.
Even before the pandemic, many global firms have embraced the South African talent pool as part of their diversity and inclusion mandate. This has had a significant impact on the business process outsourcing market as it benefited from R4 billion worth of investments in the 2019/2020 financial year.
According to Searle, the industry will be looking to hire as many as half a million employees in the next decade.
Furthermore, impact sourcing has only grown in momentum, especially in the business process outsourcing and customer experience sectors. The country is also the proud birthplace of the internationally recognised Global Impact Sourcing Coalition (GISC) – an initiative launched by the Rockefeller Foundation in 2016. To date, the GISC has seen 78 companies participate in the initiative resulting in the hiring of almost 30 000 workers.
All about service delivery
According to BPESA, the GBS sector in South Africa employs 260 000 young people, of which 65 000 service international clients in Europe, the UK, the US, Asia, Australia, and the rest of the continent. In 2020, it recorded 34% employment growth, generating more than 15 000 new jobs, of which 13 000 went to youth aged 18 to 35 and more than 1 000 were hired through an impact sourcing approach.
Furthermore, South Africa has become the most favoured offshore customer experience delivery location in 2021 globally after three consecutive years in second place. According to the advisory firm managing the survey, the country’s aggressive promotional campaigns in key demand markets contributed to its strong showing and the view among enterprise customer experience buyers that South Africa is a high-quality service delivery destination.
“South Africa has a competitive and compelling value proposition for the major sourcing markets, offering capabilities that extend across the end-to-end customer journey. The country services a range of outsourced complex functions that include software development, tech support, finance, legal, and HR,” adds Searle.
Regulatory framework
The implementation of the Protection of Personal Information Act (POPI) earlier this year in South Africa has certainly assisted in this regard as well. Likened to the European General Data Protection Regulation (GDPR), POPI speaks to how seriously the country is taking data security when it comes to personal information. This makes it an appealing destination to those international organisations who need to show compliance with data protection.
To this end, numerous local contact centres are POPI and GDPR compliant and have also achieved ISO certifications to ensure the highest quality standards are adhered to when working with international brands. In addition to this positive regulatory environment, South Africa provides companies with a way to effectively mitigate risk by diversifying into a new talent market.
“The pandemic showed how dangerous it is for any global brand to have all its resources in one market. If the geography fails to service or support, then it is in serious trouble both financially and reputationally. South Africa has been open for business even during the difficult lockdown months and provides a compelling alternative to establish and support global delivery centres,” says Searle.