Johannesburg, Cape Town and Durban were ranked 21, 57 and 100 respectively as the most attractive outsourcing destinations in the world; this is according to the 2015 Tholons Top 100 Outsourcing Destinations report. The key factors pertaining to South Africa’s attractiveness include; its cost-competitiveness, cultural alignment and accent neutrality, risk profile, infrastructure, time-zone and quality of labour. The government also plays a significant role in the development of the Business-Process-Outsourcing (BPO) market by providing incentives (i.e. free office spaces, computers & internet).
SA is a desirable outsourcing location as it not only offers voice services but also more complex and sophisticated services to the market which leads to an overall increase in employment.
What makes these cities such favourable Outsourcing locations?
Johannesburg, houses a substantial workforce with a considerably higher labour retention rate compared to Cape Town and Durban. Most of the companies operating in Eastern and Southern Africa, are headquartered in Johannesburg which is advantageous for service providers situated in the city. Johannesburg performs better than Cape Town and Durban because of its shared services and BPO services particularly in Finance and Accounting, Customer Relationship Management (CRM), Payroll, recruitment services, Information Technology (IT), Knowledge Process Outsourcing (KPO) and Human Resources Outsourcing.
Cape Town has a huge talent pool of graduates from the top three universities and FET colleges in the country. This region has quality infrastructure and a favourable time zone, making it easier to do business with clients based in Australia and New Zealand. Cape Town is the most favoured region for its IT, HR and other shared services.
Since 2006, Durban has contributed significantly to the BPO industry due to its low operational and infrastructure costs. Durban surpasses Cape Town with regards to cost of operations which are 5% lower, and salaries that are 15-20% lower compared to Johannesburg. The region’s prominence rests on the development of a new BPO Park at Dube Trade Port. Durban supports clients based in the UK and Australia, as well as in the manufacturing, financial services, retail and telecom industries.
Johannesburg, Durban and Cape Town have emerged from embryonic to infancy offshoring cities in South Africa, offering a more complex and sophisticated blend of services to future prospects in SA. For more information on SA’s compelling position of becoming a significant outsourcing hub, download our report on South Africa’s Outsourcing Hotspot Trio.