Offshoring to South Africa: Why It's a Smart Move

South Africa is a top outsourcing and offshoring destination for European businesses. This is due to the many advantages that this vibrant country has to offer, including a skilled workforce, strategic location (incl. EU time zone parity) and lower labour costs, which provides a great value proposition for foreign companies.

Skilled Workforce

One of the biggest advantages of outsourcing to South Africa is the highly skilled and diverse workforce. The country has a well-educated professional services sector with a high proficiency in English and various other languages, including Italian, German, French, Spanish and Portuguese. This makes it an ideal location for European businesses looking for a skilled workforce that can communicate effectively with customers and other team members from around the world.

South Africa has a well-established tertiary education system that produces highly qualified professionals across various industries. The country has over 25 universities, offering a wide range of degrees and qualifications. According to a report by Times Higher Education, two South African universities, the University of Cape Town, and the University of the Witwatersrand, are among the top 200 universities in the world. Additionally, the country has a number of vocational and technical colleges that provide training in relevant fields, ensuring that the workforce is equipped with the necessary skills to meet the demands of various industries.

South Africa’s Business Process Outsourcing (BPO) Industry

In June 2020,South Africa was named as the second most favoured offshoring location for contact centre delivery, globally. This was the third year in a row that South Africa has consistently taken second place, straddled in 2020 by two mature sector giants; India in first place and the Philippines in third.

“The energy and effort on the ground in South Africa from different constituencies to ensure that the country can service foreign markets makes it an incredibly relevant choice for foreign service providers,” comments US-based industry analyst, Stephen Loynd of Trendz Owl.

The South African workforce is suitable for a wide variety of jobs. The country has a thriving BPO industry, with a particular focus on call centres, sales centres, IT support, and financial services. Furthermore, the country has an abundant pool of talent across a range of industries, including engineering, design and other creative fields.

Strategic Location

South Africa's strategic location is also a major advantage for businesses. The country is located at the southern tip of Africa, making it a gateway to the rest of the continent. According to a report by the International Trade Centre, South Africa is the most diversified economy in Africa and has strong trade links with other African and European countries. In addition, South Africa has strong connections with the global economy, with membership in the World Trade Organization (WTO) and a number of free trade agreements in place. South Africa also sits squarely within the same time zone as Central Europe, ensuring that remote resources do not suffer from the same time zone differences encountered when outsourcing to Asia.

Lower Labour Costs

South Africa offers cost-effective solutions for outsourcing. According to a report by Deloitte, South Africa's labour costs are less than half of those in Europe, making it an attractive location for businesses looking to reduce their operating costs. With increasing salaries being paid in Europe, South Africa is certainly an attractive option.

Key Takeaways

- South Africa has a lot to offer businesses which are looking to outsource their operations, including a highly skilled and diverse workforce, strategic location, and commercially favourable business climate.

- South Africa is consistently ranked as one of the top 3 outsourcing destinations in the world.

- The country's professional workforce is highly-qualified and suitable for a wide variety of jobs, making it an attractive location for businesses looking for talent across various industries.

- South Africa has an established and growing BPO sector, with 2023 on track to show even greater expansion.

- The cost of labour in South Africa, compared to Europe, is very low, making it difficult for companies not to consider it as a viable option to hiring directly within Europe.

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