Released: bespoke US and UK source market value propositions for South African offshoring providers – Genesis GBS
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Released: bespoke US and UK source market value propositions for South African offshoring providers

In tandem with the release of the South Africa National Value Proposition, Business Process Enabling South Africa (BPESA) commissioned Genesis Global Business Services (GBS) to compile separate GBS source market value propositions for the UK and US markets.

Attractive price points, cultural affinity, favorable time zones and accent neutrality, are all factors that have influenced enterprises in the UK to outsource to South Africa, making the UK the country’s largest source market.

However, there has been significant growth and investment from the US which is the world’s largest offshoring market and South Africa’s second-largest source market. Notably, this presents a largely untapped opportunity for South African GBS/BPO operators.

Each value proposition is tailored to the unique requirements of the UK and US markets, which can be utilized by BPESA members to deploy bespoke marketing strategies to the respective source market buyers and operators.

Keep reading to catch a glimpse of what one can expect to find inside each source market value proposition.

UK source market value proposition highlights

Ranking 12th out of 112 in the Education First 2021 English Proficiency Index, South Africa is viewed as a right-fit provider of English-speaking CX talent to service UK. In fact, South Africa ranks ahead of popular UK nearshore markets, including Hungary, Poland, Czechia, Ukraine, Morocco and Egypt.

Adding to this, UK buyers can save up to 77% on salary costs and between 60% to 70% on per seat full loaded full-time employee (FTE) costs. When South Africa’s GBS incentives are implemented, fully loaded FTE costs can be reduced further by 8% to 10%.

When compared to competitor UK nearshore markets, South Africa’s fully loaded FTE costs are less expensive than Ireland, Czechia, Hungary, Poland and Morocco. Again, when the GBS incentives are applied, South Africa’s fully loaded costs are comparable with Egypt.

What’s more, diversity, equity and inclusion (DEI) in South Africa is firmly entrenched, translating into a diverse GBS workforce that is 96% multi-ethnic and consisting of 89% youth and 65% female workers.

South African GBS/BPO providers have developed niche domain knowledge in the UK and source markets, namely in the telecom vertical, which has created an estimated 16 718 offshoring jobs. Retail (11 742), banking, financial services and insurance (8 946) and utilities (7 996) are other major areas of expertise for the UK market.

However, the education and legal verticals are rapidly emerging as new areas of niche expertise delivered to UK buyers by South African GBS/BPO providers, creating an estimated 3 355 and 559 offshoring jobs respectively.

Growth in leading and budding verticals is supported by South Africa’s capability as being an established business continuity location for UK brands seeking to spread service delivery across multiple geographies. 

The ability of South Africa to operate as an offshore hub for UK enterprises is owed to the widespread adherence to key data protection and other compliance legislation, such as GDPR, UKAS and BSI.

US source market value proposition highlights

With over 205 000 B2 level (proficient and potential) English-speaking candidates available to service the US source market, South Africa has a ready supply of skilled CX talent to service US customers.

Testament to the English-speaking capabilities of South African workers, is the country’s higher ranking in the Education First 2021 English Proficiency Index than the Philippines, Panama, Honduras, Nicaragua, Colombia and Mexico, which are favorite nearshore and offshore locations for US buyers.

South Africa’s English proficient talent is also cost-effective, saving US buyers between 60% to 70% on salary costs, which can be further reduced when GBS incentives are applied.

South Africa’s competitive fully loaded FTE pricing compares well when compared to several popular nearshore, locations to the US including Panama, Mexico, Jamaica and Honduras. The GBS incentives, when implemented in the fully loaded FTE cost structure, can bring the country closer to the pricing structures in Colombia and Nicaragua.

These attractive costs have driven operators in South Africa to develop an expertise across key US vertical industries. The telecoms vertical is the largest vertical industry in South Africa’s US market segment, which has created an estimated 8 395 jobs. Retail (5 896), Insurance (3 004), technology (1 376) and travel/airline are other notable areas of expertise delivered by South African GBS/BPO providers to the US market.   

Moreover, healthcare and media are emerging as burgeoning niche verticals, which has already created an estimated 253 and 225 GBS/BPO jobs in South Africa.

This delivery of both specialized and general offshore services by South African GBS/BPO operators is underpinned by their adherence to key US regulatory policies. The Community Reinvestment Act (CRA), 5010/ICD 9 & 10 Standards and Health Insurance Portability and Accountability Act (HIPAA) are some examples of such policies abided by South African GBS/BPO operators.

Opportunities looking forward

As it stands, South Africa matches pertinent offshoring requirements for both the UK and US markets, as showcased by their respective value propositions.

However, the country’s GBS/BPO market has more to gain from these global players, derived from future growth in their demand for offshoring services.  

To reduce costs and meet rising customer expectations, outsourcing demand from the UK is expected to increase further. Inflationary pressures and concerns of a recession will further fuel growth.

Meanwhile, demand from the US source market will be driven by the combined trend of US buyers and operators shifting work away from traditional delivery locations to new locations. The increased need for skilled talent for customer and contact center services will also spur growth.

Genesis GBS
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