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South Africa's service industry looks to cash-in on Brexit uncertainty

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South Africa's service industry looks to cash-in on Brexit uncertainty

Photo by Bloomberg

3rd October 2018

By: Reuters

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South Africa’s burgeoning call services sector, which gets more than half its work from Britain, could attract larger inflows as the impact of Brexit weighs and firms seek savings by moving operations offshore, industry officials said on Wednesday.

Cultural affinity, good English language skills and similar time zones have helped spur South Africa's business process outsourcing (BPO) sector as it looks to compete with India and the Philippines in a global industry worth $89-billion in 2017.

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"When there is uncertainty the outsourcing industry blooms. Obviously there is huge uncertainty around Brexit and that provides outsourcing opportunities... to countries such as South Africa," said Kerry Hallard, president of the London-based Global Sourcing Association.

"South Africa is building itself a reputation for customer service and if it carries on promoting that then it could really benefit from Brexit immediately," she told Reuters on the sidelines on an industry conference in Cape Town.

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According to Everest research firm, South Africa's global services market grew around 22 percent annually over the last four years, which was twice the global industry growth rate and three times faster than its Asian rivals.

Supported by a government incentive scheme that pays investors for each job created, the sector now employs around 40 000 people, many of them school leavers in first jobs.

Highly-skilled niche jobs for financial services, legal, healthcare and technology are also available in BPO hubs Cape Town, Durban and Johannesburg where Amazon, Capita and Serco are among global firms present.

Brandon Aitken, chief commercial officer in South Africa for Webhelp, a BPO firm which says it has 35 000 employees in more than 25 countries, said the company is welcoming at least two new UK brands into South Africa in 2019.

"And we expect more to follow. We believe that as UK companies continue to see the customer value that can be derived from BPO SA, offshoring will become the natural opportunity to also drive cost saving objectives," he said.

Operational costs could be up to 60 percent lower than those in Britain and Australia, said researchers.

"With the rand free-falling and if you are in the UK and looking to outsource to South Africa, then obviously it's very attractive from a labour pool, from a cost-saving and skills perspective," said Jordan Shaw, head of commercial business at Talksure call centre.

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