SA on the right BPO track

Business Process Outsourcing (BPO) has long been targeted by the South African government as a major source of employment growth and skills development. Thabo Mbeki repeatedly called attention to BPO as an employment driver, and the Zuma government has followed suit, launching an industry incentive programme in February which hopes to create 30 000 jobs over a five year period.

The country is well placed to achieve this target. Role players are investing heavily in the local industry, which has all the right tools and abilities to grow according to government’s expected path. In addition, the country has a large pool of educated job seekers able to spur the growth of the sector in the long run.

Government’s incentive programme will reduce the cost of BPO operations in South Africa by up to 20%, paying investors R112 000 for each full-time job created and maintained. These incentives will be paid out over a three year period, in instalments.

Caution is required, however. Incentives will have to be carefully managed if they are to ensure sustainable growth over the period.

Incentives are offered for every job created, but the lifespan of the programme is limited to three years for each company. It is therefore essential that businesses do not build their core models around the incentives, but rather use them as they are intended — as a growth spark. Equally, measures must be in place to ensure the system can’t be taken advantage of through irregular activity.

When comparing South Africa to outsourcing behemoths in the battle for global competitiveness, it’s important to note that we don’t necessarily have to beat out rivals on price alone. Value added is as important as the bottom line cost of BPO services. Within this context, there are two key strengths inherent in the South African sector: infrastructure and linguistic flexibility.

We excel locally in the quality of our infrastructure, which is proven and copes with demands many other major destinations struggle with. We also have eleven official languages, enabling South Africans to adapt pretty seamlessly to the demands of American and European customers. This is a significant point of competitive advantage in economies where the tone of voice and accent of the service representative really matters.

While BPO can play a significant role in creating employment in the contact centre space, this is by no means the only benefit of sector growth. BPO growth will also have a positive impact on our general presence in the broader global economy.

The core issue in South Africa’s ongoing quest to grow its BPO sector is communication. As a sector we need to become far more proactive about how, when and where we communicate these points within the global market. Nobody is going to tell this story for us, but if we improve our communications then government’s aspirations for BPO are certainly within range.