The country’s stable political and economic environment, European time zones, and a large English-speaking population are the main drivers behind growth. More companies outsourced to South Africa in August 2003 than during the whole of 2002, with top names such as Barclays Bank and Virgin leading the way.
The South African government originally got behind the industry at the beginning of 2003, at least in principal, when President Mbeki singled out outsourced call centers and business process outsourcing as a main driver to reduce the country’s massive unemployment, which is 35% officially, but estimated as much higher in reality.
Of course, South Africa’s potential should only be considered in relation to India’s multibillion-dollar offshore IT services market, which has been rapidly expanding to include business process outsourcing such as call center services. According to India’s National Association of Software and Services Companies, the outsourced IT-enabled services – or BPO – market was worth $2.6bn in 2003.
One of the main benefits that South Africa can provide outsourcing companies over India is the amount of staff attrition. Indian BPO outsourcers are currently facing staff churn of anything between 30% and 70% according to market research and clients who have spoken to ComputerWire. However, attrition rates in South Africa are understood to be considerably lower at around 6%, according to Mark Spendlove, marketing director of Dialogue Group, a call center outsourcing providers with offices in Cape Town, South Africa and London, UK.
There are a number of reasons behind these lower attrition rates, according to Spendlove, including the time zone, which enables staff to work only partial night shifts rather than all night; and the fact that most Indian call center workers are well educated graduates with higher career expectations., According to Spendlove call center work looked on by South Africans as a proper career, rather than a means to executive level status.
Nevertheless, South African call center workers are still more expensive per hour than their Indian counterparts. For example, a South African call center worker may cost around 8.50 pounds ($15.40) an hour, compared to the 4.00 pounds ($7.20) an hour for an Indian employee. However, companies such as Dialogue argue that the benefits of the cheaper cost of per employee in India are eroded by the costs of retraining staff through the large attrition.
This article is based on material originally published by ComputerWire
