THE PAST two pandemic years provided significant growth impetus for niche business process outsourcing (BPO) providers, and will continue to do so this year, according to South African-based provider, iContact BPO.
According to McKinsey’s South Africa Big Five report, the country’s global business services sector could grow to more than 775 000 jobs by 2030, with two-thirds of these in the service of overseas markets.
Clinton Cohen , the company’s chief executive, said this week that there were two key reasons for this growth.
“First, the number of businesses that are first time outsourcers grew significantly during the pandemic,” Cohen said.
“Second, many first-time outsources have specialised needs. Think screening of medical records, insurance claims processing, research, surveys and so on. It’s not your typical client service BPO function, and likely require the expertise of a niche provider that specialises in such functions.”
Strategic partnerships and BPO sub-contracting to South Africa was on the rise. He said iContact BPO has been approached by various BPO operations based in the US, UK and Europe looking to establish strategic partnerships with South African providers for subcontracting purposes, much of which was driven by challenging labour issues in developed markets.
But Cohen said finding skilled people to fill positions in these contact centres faced intense competition with other job roles where there was a high transferability of contact centre skills.
Similarly, in many instances hourly pay for new hires in areas such as logistics, online shopping and the like, exceeded the finite hourly wages that onshore contact centres competed with, making these contact centres uncompetitive in terms of global labour realities.
But on the flip side, South Africa had millions of educated young people in need of employment, with English language capabilities amenable across many geographies and a favourable exchange rate that helped in delivering fully loaded services, including management time at anywhere up to 60 percent less than onshore delivery in the US, UK or Europe.
“Establishing strategic partnerships with South Arican BPO partners allows them to retain their client interface and relationship, deliver on client needs with a top CX (customer experience) destination BPO provider, achieve the operational and geographic diversity that proved critical during the pandemic, and resolve their expensive skilled labour shortages without having to set up their own capital-intensive operations offshore,” he said.
According to the annual Ryan Strategic Advisory Front Office BPO Omnibus Survey, South Africa was voted the most favoured offshore CX delivery location in 2021, based on votes from more 600 global decision-makers.
South Africa’s BPO sector had demonstrated strong operational and service capabilities during the pandemic and did not falter in its business continuity efforts. The BPO businesses had quickly migrated to remote and hybrid working models ensuring that operations and service delivery continued with minimal disruption, Cohen said.
Over the past two years, much refinement has gone into providing the tools and support for hybrid work arrangements that allowed companies to pivot in either direction, in line with their unique circumstances as well as those of the customers they serve.
He said to move forward, the BPO industry relied on focused and meaningful government support, and the continued active lobbying of industry bodies such as Business Process Enabling South Africa and Cape BPO to showcase South Africa to the world.
The business growth of South Africa’s BPO sector was underpinned by delivering strong offshoring fundamentals, bringing together the best of economics, quality BPO services, rapid scale, high service levels, socially responsible supply chains, policy certainty, and industry-specific training and education programmes.
BUSINESS REPORT