Top seven reasons why South Africa is the world’s preferred offshoring destination

South Africa has been poised to become the next global powerhouse in the BPO industry for several years now, having been named “Offshoring Destination of the Year” in both 2016 and 2018. 

While the country’s strong government support and business incentives have lured companies such as BT, British Gas and Amazon, there are several other benefits South Africa can offer over alternative offshore destinations.

1. Cost

In this day and age, all companies need to be mindful of saving costs and taking care of their bottom line. While South Africa continues to have its economic challenges, the weakening Rand presents a favourable exchange rate for global companies. Labour costs are much lower, as more industrialised countries in Europe and North America have higher salary rates in comparison. 

Furthermore, the cost of living is relatively low. It is estimated that the cost of living in Johannesburg is 56% lower than in London, whereas Cape Town and Durban are respectively 62% and 67% lower than London.

In a competitive economic climate, markets such as South Africa that offer lower costs are becoming increasingly attractive options for cost-conscious companies.

2. Skills

South Africa’s unemployment rate currently sits at 30.8%. The country’s BPO industry, as such, provides a low barrier to employment. It is an attractive option for a high number of young, ambitious job-seekers eager to get ahead in their careers. South Africans are known for their industrious work ethic, which is appealing to BPO service providers.

This high availability of quality talent has been a key driver of success, and global companies are leveraging South Africa for delivery of complex work, as a result.

Today, companies are provided with access to professionals available in a number of crucial business-related industries, such as financial services, legal process services, IT outsourcing, procurement services and multi-channel customer experience.

3. Infrastructure

In terms of physical infrastructure, the quality of buildings and roads in major cities such as Cape Town is equivalent to that of Western Europe.

A critical factor of South Africa’s status as a preferred outsourcing destination is the continued development of its extensive domestic transportation support and SEACOM fibre-optic powered telecommunications network.

Modernised information and communications infrastructure and the growing adoption of next-gen technology have resulted in the country’s commendable ascent on the Ease-of-Doing-Business index. The nation is now able to provide everything from cloud-based services to advanced analytics at a competitive cost to business.

4. Time difference

South Africa overlaps multiple time zones.

This time zone affinity makes it a preferred choice for European countries looking to offer services during work hours and allows for better follow-up support.

And while Europe certainly favours South Africa for its time zone compatibility, the country’s capacity for round-the-clock quality service at significantly reduced costs appeals to all parts of the world. In fact, both large and small offshore clients in Australia and the United States are grabbing the opportunity of utilising South African workforces in their night time or “downtime” to service their client base.

This work typically encompassed customer support, but it is evolving to include customer experience management, such as upskilling, retention, chats and social media interaction, among others. 

5. Language

The country is blessed with a rich diversity of linguistic traditions, but English is the de facto language of business and government. In fact, English is even used in parliamentary and state proceedings. The ubiquity of English makes international communication a breeze. 

There is also typically a level of training done for accent neutralisation in BPOs, but training is not a necessity in South Africa, as language similarities and a similar accent with the UK mitigates the process.

6. Culture

South Africa has long been a favoured tourist hotspot thanks to its stunning geography, historical significance, stable climate and wildlife. This has contributed to a national character that is service- and sales-oriented. In general, South Africans tend to be resilient and empathetic, which makes them committed to work and well-suited to the needs of international business customers.

South Africa also has a global outlook, with many of its citizens having studied or worked abroad, especially within the UK, and share many cultural references. 

This is why organisations from native English-speaking markets such as the UK, USA and Australia make up a large majority of South Africa’s contact centre clientele.

7. Quality

South Africans are resourceful and entrepreneurial, and generally thrive on solving business problems rather than producing work for the sake of it. They are usually willing to give input and challenge thinking and do not need detailed instructions to complete simple tasks.

South Africa has also historically been very close to the top of the World Economic Forum’s list of countries that provide the highest level of auditing and reporting standards. 

As the European Union is such a close business partner of many South African companies, South Africa’s data regulations are closely aligned with GDPR, and there is a widespread acknowledgement in the government and business community that any data protection regulations will have to closely reflect those of their trading partners.

Get in touch with the offshoring specialists

Offshoring helps companies in many top economies to compete locally and internationally. This is because it offers numerous benefits that would not be available if those same processes were handled by local enterprises.

At Sable International, we are able to assist companies that have chosen, or are considering choosing, South Africa as their offshore destination of choice.

We offer a range of hedging tools, also known as Currency Solved, that enables us to advise on stop-loss, limit orders, FX options and forward contract capabilities. Forward contracts can be a particularly good hedging tool when looking at the GBP/ZAR currency pair. The interest rate differential between the two currencies means that forward points are always assigned to the Rand when booking it in advance. As such, you can book a transfer up to a year in advance, better than what the spot rate is that day.

We are also one of the only firms that are dual regulated between the UK and SA. We are familiar with all the necessary South African Reserve Bank exchange regulation controls and can ensure funds are brought into the country quickly and cost-effectively.

For a free foreign exchange consultation email us at forex@sableinternational.com or call us on +44 (0) 20 7759 7554. We have a team of experts between our UK and SA offices who are always ready to take your call.