South Africa isn’t waiting for an invitation to muscle in on a rush of Australian call-center and administration jobs going offshore; it’s making cold calls in the hopes of being first in line, according to a report in TheAustralianFinancialReview.
The South African government is behind the push, viewing outsourcing of business processes as a major job creator, the report said. South Africa’s labor rates are as cheap as the Philippines’, India’s and Malaysia’s, but with a more familiar cultural face, the government claims.
“I can’t recall ever being cold called by a country before,” the executive of an Australian telecommunications company told TheAustralianFinancialReview at a briefing hosted by South Africa’s Department of Trade and Industry, or DTI.
DTI and South African businesses toured Australian business centers last week promoting South African customer service skills, “up-sell” and “cross-sell” rates, improved facilities – including a repurposed soccer World Cup broadcast center – better broadband connections and dirt-cheap office rents.
From this visit, DTI is hoping to increase the number of Australian outsourcing jobs done in South Africa from a few hundred to 1,000 by the end of 2013. “It is a modest amount, but we would look at greatly increasing that in future,” said Dean Hoff, South Africa’s DTI director of services for investment promotion.
Cold calling “is a cost-effective way to create jobs,” Hoff said. “We have to target industries we are looking to build: manufacturing, clean economy and business process outsourcing is another.”
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Competing with South Africa for telecommunications outsourcing business is rival Mauritius, which is also pitching itself as a gateway to tapping the African market and sent a delegation to Australia in May.
South African outsourcing providers CCI and Mindpearl held briefings for more than 100 businesses in Melbourne and Sydney last week.
Australian companies in attendance included Telstra, financial services company ClearView, which already does some insurance claims processing in South Africa, global insurance service provider Innovation Group and telecommunications company AAPT. Australian law firms already have some workers there, including Wesfarmers and iiNet. Due to different time zones, some of the work can be done overnight.
South Africa is not well known in Australia as an offshore center, the report said. Poor infrastructure and high telecommunications costs have hampered it in the past.
“We want to redefine the South African value proposition,” Hoff said.
South Africa has 200,000 workers doing business process outsourcing including 18,000 serving overseas companies, the report said. The country attracted European business due in part to being the same time zone, good English skills and close cultural affiliations.
The U.K is South Africa’s largest outsourcing export market. Australia could potentially be No. 2 due to comparatively high costs of doing business and the willingness of many more companies to go offshore, the report said. Despite the devalued dollar, the rand has also depreciated and cost savings are still high.
Office space in South Africa ranges from $4-per-square-meter to $20, compared with hundreds of dollars a square meter in Australian cities. Salaries for call-center workers, including pensions, are about $10,000 a year compared with an average of about $70,000 to $80,000 in Australia.
Hoff said South Africa could offer 40 percent savings for U.K. businesses and up to 70 percent for Australian companies.