The local BPO sector increases employment in the fourth quarter

South Africa’s business process outsourcing (BPO) sector saw 6,018 new jobs created across the country between October and December 2023.

This is according to industry body Business Process Enabling South Africa (BPESA), which states that 39% of these jobs were in KwaZulu-Natal (KZN).

In July 2023, the sector was reported to have contributed about R1.3 billion to the country’s export earnings, BPESA says.

It further notes that the KZN south coast has emerged as a major growth and investment destination, with BPO operators looking for alternative second-tier locations, closer to the talent pool, with reduced real estate costs.

“The KZN south coast has beautiful tourist towns; stable, warm weather all year round; and a pleasant landscape that makes it a great place to do business,” explains Reshni Singh, CEO of BPESA.

“There is a very active livelihoods and maintenance community, with businesses and citizens working together effectively to ensure this continues. The real estate sector is driving a lot of activity and the area is open for business and development.

Coupled with a weak economy, unemployment in SA continues to rise. The official unemployment rate in the first quarter of this year. was 32.9%. Young people aged 15-34 remain vulnerable in the labor market, with the youth unemployment rate rising to 45.5% over the period under review.

The BPO sector, sometimes called the global business services (GBS) sector, has been hailed as a green momentum that could help overcome unemployment in the country, with the sector aiming to create 500,000 new jobs by 2030.

BPESA – through key collaborations – aims to promote SA as a leading offshoring destination to drive local job creation, attract investment and deliver excellence in service delivery and management across the GBS sector.

Singh identifies Port Shepstone, Scottburgh, Ramsgate, Southbroom, Pennington and Margate as key BPO center locations.

“The local Margate Airport and easy access from King Shaka International Airport make it an accessible destination, with a wealth of skills and talent from the tourism sector offering the deep-rooted customer-centric service skills that are a prerequisite for the BPO sector. Business incubators like the SmartXchange satellite office help grow businesses and build digital skills.”

Singh further points out that the KZN south coast is comparable to tier two regions that are already seeing growth in the sector, including George and Mitchells Plain in the Western Cape; Gqeberha and East London in the Eastern Cape; Soweto and Alexandra in Gauteng; and Ballito, uMlazi and Dundee in KZN.

Deborah Ludick, Acting CEO of South Coast Tourism and Investment Enterprise, comments: “We have a business-friendly investment climate, supported by the launch of our one-stop shop in Ugu District, providing access to a large number of young, educated and tech-savvy workers ready to take up work.

“The sector also promotes socially conscious practices, while upskilling disadvantaged young people for further career prospects, making it an industry worth promoting.”