In four years time, call center numbers in the Republic of South Africa will be double those of today while the number of offshore agent positions (AP) is expected to quadruple.
The reason for the anticipated boom in South Africa is a higher quality more culturally-aligned front-office and back-office location where labor costs run at two-thirds of their US or UK equivalent. In this model, South Africa will occupy an important position in firms’ global operations portfolios. It will slot in between nearshore locations such as Canada, Mexico or Eastern Europe, which offer close proximity and also cultural affinity to domestic markets, and more traditional offshore locations such as India and the Philippines that offer cheap labor, according to the report “South Africa: An emerging offshore location”, published by market analyst Datamonitor.
The Dutch market is expected to be the biggest non-English language market that is served from South Africa. Firstly, says Datamonitor, the Dutch language is the root of Afrikaans which means that cross-training call center agents to speak Dutch should not be problematic. Secondly, the domestic Dutch call center market is itself mature, reaching saturation point and delivers little margin for outsource providers there.
Datamonitor expects there will be 939 call centers in South Africa by 2008, almost double the current number of 494 – a compound annual growth rate (CAGR) of 14%, over the period. The total number of APs in RSA meanwhile is predicted to rise to 69,600 by 2008. 6,200 will be offshore outsourced APs.
Seventy percent of South Africa’s offshore customer service agents service clients in the UK market today. Most of these APs are located in the Gauteng province – more specifically, in Johannesburg. However Datamonitor expects the balance will shift in favor of Cape Town in the Western Cape Province.