South Africa has emerged as a Global leader in Business Process Outsourcing

South Africa has emerged as a global leader in business process outsourcing

Youth unemployment in South Africa has decreased to 45.5% in the third quarter of this year, but nearly five million young people remain vulnerable in the labour market. One sector offering hope is business process outsourcing (BPO), which addresses the urgent need for jobs. Growing at an annual rate of 3.64% between 2024 and 2029, South Africa’s BPO sector is expected to reach a market value exceeding $2.2 billion by 2029.

The growth of the BPO sector is fuelled by companies' pursuit of greater efficiency and cost savings. Increasingly, businesses are turning to outsourcing for services like customer care, telesales, IT support, and back-office operations to meet the needs of both local and international clients. This demand underscores how important the sector has become in driving operational improvements.

 Beyond cost and efficiency, BPO has become a cornerstone for enhancing customer experiences. For example, companies that leverage BPO to implement omni or opti-channel customer engagement achieve significantly better retention rates, retaining 89% of their customers compared to just 33% for those without an omni or opti-channel strategy. This highlights the critical value of BPO in fostering customer loyalty and satisfaction.

South Africa is considered one of the world’s top emerging markets for BPO, especially when it comes to customer experience and back-office outsourcing. Further fuelled by the government’s targets to create 500 000 new BPO jobs by 2030, a significant advantage for addressing the youth unemployment question is the low barrier to entry. Often requiring minimal prior experience and education as on-the-job training is provided, BPO provides the means for the youth to gain valuable skills while earning a steady income.

Brandon Meszaros, CEO of CXG, notes a growing trend of international companies, particularly from the UK and Australia, showing interest in South African BPOs.

 “This reflects South Africa’s strong foundation in the industry,” he says. “The country offers a large, well-educated workforce fluent in English, either as a first or second language, along with labour costs that are 60 to 70% lower than those in the UK. Additionally, South Africa boasts sophisticated infrastructure, a world-class banking system, and service providers adept at navigating both local and global regulatory environments.”

 Adding to these factors, incentives are offered to offshore businesses wanting to create opportunities for the country’s growing population, making an investment in South Africa as a BPO destination a solid business decision.

With the BPO sector globally continuing to expand with the availability of advanced technologies such as artificial intelligence, machine learning, and data analytics, organisations will be able to deliver even more personalised customer experiences.

“South Africa is able to fulfil its role as a major role player in the global collective. As a destination, we are consistent and experienced and have over the last two decades proven ourselves as a top provider of BPO services. The combination of advanced technologies, talent, expertise, and knowledge are all here, at a cost far below global rates,” concludes Meszaros.