South Africa’s refreshed GBS value proposition to bolster the international offshoring investment pitch
Genesis Global Business Services (GBS) was commissioned by Business Process Enabling South Africa (BPESA) to compile the South Africa National GBS Value Proposition, which was officially released at BPESA’s 2022 GBS Investor Conference.
Following the former GBS value proposition document published in 2019, the refreshed South Africa GBS National Value Proposition presents eight updated key pillars that position the country as an ideal location for offshoring services.
Under each key pillar are a collection of data, statistics and information as supporting evidence of South Africa’s winning GBS characteristics. These are some of the highlights:
Cost-saving talent and impact sourcing workers
Cost competitiveness is the ‘tip-of-the-spear’ of the country’s GBS value proposition, registering between 60% to 70% lower costs compared to those in key source markets, including the US, the UK and Australia.
Moreover, South Africa’s fully loaded full-time employee (FTE) costs are noted to be lower than those in several competitor markets. The average monthly cost per seat in the country ranges between US$1 096 to US$1 462, which is lower than Poland (US$1 405-US$1 873), Malaysia (US$1 328-US$1 771) and Jamaica (US$1 120-US$1 493). When the country’s GBS Incentives are applied, these costs are comparable with those in the Philippines, Kenya, Egypt and India, which are renowned for their low-price points.
Inexpensive costs do not compromise output, as GBS investors and operators have recorded that the country delivers 18% better CX quality, which translates into 4% to 5% better/higher customer retention each year when compared to some competitor offshore markets.
One of the factors contributing towards superior CX delivery is South Africa’s abundance of English-speaking talent. There is an estimated 760 000 qualified South African youth that are proficient B2 English speakers that are readily available for GBS/BPO hire (after going through work readiness training). This translates into estimated ramp-up speeds of over 21,000 per month.
Several of these candidates consist of South Africa’s scalable and diverse pool of impact sourcing workers, which form a third of the country’s total GBS/BPO workforce. Estimated figures of the number of impact sourcing workers employed in South Africa’s GBS/BPO sector are between 78 000 to 90 000.
Digitally enabled and vertical-specific expertise
This talent pool can deliver digitally enabled end-to-end customer lifecycle management services across a range of vertical industries. The predominant vertical industries serviced include telecoms, which employs an estimated 31 092 GBS/BPO workers servicing international markets. Banking (5 511), insurance (11 126), retail (21 827) and utilities and energy (14 870) are the other top international vertical industries serviced from South Africa.
International customers in these verticals are supported by ‘follow-the-sun’ models consisting of staff rotation or 24/7 Teams, self-service and omnichannel helpdesk services.
Flourishing alongside South Africa’s international contact center and BPO services is its sophisticated business process capabilities in finance and accounting (F&A), legal, It outsourcing (ITO), learning and credit lifecycle management.
Supporting infrastructure and enabling environment
More than 380 000 kilometers of fiber optic and six submarine cables support the country’s 144 terabytes per second fiber optic capacity. This ensures that there is seamless connectivity to international clients and end-user customers.
The country is also physically accessible for GBS/BPO investors, buyers and operators by 141 direct flights to major global business destinations in the US, the UK, Europe and Australia.
GBS/BPO investors also have access to seven Special Economic Zones (SEZs) and Industrial Development Zones (IDZs) that are equipped with robust ICT and physical infrastructure, where tenants enjoy a range of financial and non-financial investment incentives.
Recognition for outstanding business continuity, compliance and quality
South Africa’s supporting infrastructure underpins its strong business continuity capabilities, a must-have for GBS/BPO buyers and operators. A combination of uninterrupted service delivery and successfully implemented hybrid/work-from-home models position South Africa as a desirable multi-shore location.
Additionally, operators adhere to multiple global data protection, compliance and regulatory policies and standards, such as GDPR and ISO certifications.
These have contributed to South Africa’s first-place position (tied with India) as the Most Favored CX Offshore Delivery Point in 2022. In fact, South Africa has occupied the top two positions over the last five years.
In the GBS World Competitiveness Index, South Africa is ranked first in the Customer Lifecycle Management category and within the top five in the Customer Support Administration, Back Office Processing, Data Management Services and Digital and Contact Center Services categories.
Consequently, South Africa dominates Africa’s GBS/BPO market with an estimated domestic BPO workforce size of 205 423 and estimated international GBS job growth of 109 133.
Future growth
Increased collaboration and investment among South Africa’s GBS/BPO stakeholders are set to further strengthen the country’s GBS value proposition. This is evident in the recent implementation of the GBS Masterplan, which sets out detailed guidelines to address demand-side, supply-side and transformation objectives to reach a job creation target of 500 000.
And with 45% of Africa’s investment flowing through South Africa, the country’s GBS/BPO market will continue to contribute to and influence the continent’s GBS/BPO trajectory.
