South Africa has identified Business Process Outsourcing (BPO) as an enabler for economic and social growth. Taking examples from countries such as India and Philippines where the industry has had huge success, South Africa is progressing well towards developing its currently nascent BPO industry. South Africa is emerging as an outsourcing destination with a growing English-speaking population, which is qualified and further supported by a time zone that overlaps with most of the regions. Cost savings, revenue-generating services, presence of large outsourcing service providers and buyers, the availability of French, Portuguese, and Dutch speaking talent is also favouring South Africa as the next outsourcing destination for the developed world.
There is always a question in the public domain about whether outsourcing creates jobs or erodes them. A simplistic and locally focused perspective will look at outsourcing in isolation and call the movement of jobs from a company to a local outsourcing provider as a loss of jobs. To say a country that allows companies to outsource in order to obtain efficiencies and cost reduction causes job losses is naïve and uninformed. For many companies to survive and continue to employ people, they need to drive efficiencies and continuously improve their manual – and sometimes outdated – ways of doing business. Driving efficiencies could result in job losses, whether improvements are done internally or by an outsourcing provider. Statistically, there are more employees that get retrenched annually because of company failures (mainly where the revenues cannot cover the overheads of that company), than job losses caused by efficiencies through outsourcing. Even trade unions – who are more vocal against outsourcing – have asked the question: is it better to retain 100% of company employees for a short while than to sacrifice 15% of employees in order to keep 75% of them through to retirement?
However, a country that is able to import foreign jobs into its shores creates new jobs. Unfortunately, it is impossible to have successful professional outsourcing providers at a global level, if the domestic market bemoans the service. Successful outsourcing countries have a vibrant domestic outsourcing market that creates talented outsourcing professionals, who become attractive globally.
South Africa has a great talent pool that is greatly underutilised. Outsourcing offers a win-win to both Government and business whose differing agendas can be met by looking at the problem with a fresh perspective.