The Western Cape’s business process outsourcing sector, which encompasses call centres serving external clients, created over 4,400 new jobs through foreign investment over the last year.
According to the industry body in Western Cape, BPeSA, domestic operations still make up the majority of business process outsourcing jobs in the Western Cape, but recent job growth has resulted from foreign investment, a trend that is expected to continue.
However, BPeSA said concerns remain in the sector over the "onerous" requirements of the broad-based black economic empowerment codes which came into effect in May.
Business process outsourcing involves a company contracting the operations and responsibilities of specific business functions, such as customer-related functions, to a third party, often in another country like SA. The UK is SA’s main source of such foreign outsourcing activity.
International outsourcers working out of the Western Cape include Capita, Merchants, Mindpearl, Teleperformance, Serco, WNS, Webhelp as well as various international brands such as Asda, Amazon, Bloomberg, Engen, iiNet, 02, Qantas, State Street, Shell, Shop Direct and Vodafone.
The industry is among those the government has prioritised for support due to its potential to create jobs. Companies servicing foreign markets can apply to access incentives provided by the Department of Trade and Industry, on condition that they meet strict BEE and job creation criteria.
Gareth Pritchard, CEO of BPeSA Western Cape, said on Friday the province accounts for about 60% of all international business process outsourcing jobs in South Africa, which amount to 16,000.
Further growth was expected but there were some concerns in the industry about the new codes.
"The new requirements (are) onerous but (there is) strong dialogue between industry and government. Industry is keen to support transformation initiatives but the deadlines set by government are ambitious," Pritchard said.
Last year, the Department of Trade and Industry launched the revised incentive programme, which is also intended to reward higher level offshore activities such as legal services.
Pritchard said there is a lot of interest in the incentives for such offshore activities, "but no significant deals won yet (as it is still) early days".
Lisa Roos, the business development director at Merchants, said the Western Cape’s cosmopolitan nature and success as a tourist destination has also opened people’s minds to the province as a world class customer service destination.
Cape Town mayor Patricia de Lille said on Friday, "Cape Town offers a very compelling value proposition for international business process outsourcing. We are able to offer significant cost savings: we are perfectly positioned to service the European, Australian and North American markets and, most importantly, have an amazing talent pool at our disposal. It is the quality of our people that sets us apart."
Western Cape Economic Opportunities MEC Alan Winde stressed that the provincial government is committed to supporting areas that "make a real difference to the people of the region".
"Business process outsourcing is an important economic generator and this sector is delivering a massive boost to growth and jobs, especially for our youth. We applaud BPeSA’s efforts in helping this sector to thrive," Winde said.