With the rapid growth of the Call Centre
industry, South Africans have developed the skills to design,
build and operate call centres rapidly and at reasonable
Many call centres offer multiple languages
and support both sales and service activities and South
Africans have learned how to operate efficiently and effectively
in these relatively complex environments.
The international business community has
demonstrated its confidence in South Africa by placing more
than 2500 seats in the country in the past three years.
It currently is a “Buyer’s
Market”, thus companies seeking to outsource their
call centre can secure and negotiate better pricing, terms
and service than during boom times.
As a result, outsourcers are offering flexible
contracts such as one-year renewable clauses in a typical
three year contract, thus allowing companies to drop an
outsourcer after one year, or after the second year, while
the price remains the same.
There has recently been a change in the
nature of the things that are being outsourced. Until now,
it has generally been intangible things such as business
processes that have been outsourced. This has shifted to
full operations, signifying confidence in the outsourcing
South Africa's Call Centre Industry
South Africa presently has 535 call
centres, over 47,000 seats, and 79,000 employees in the
CC industry and more than 18 local CCs providing services
to the international market
The Mitial country report of 2002 /
2003 indicated rapid growth in the number of call centre
sites in 1997 (24%), 1998 (33%) and 1999 (21%), slowing
to 10% in 2001. The report projected a gradual increase
in the growth rate from 10% in 2001 to 14% in 2005.
Low Call Centre Wages
South Africa’s labour costs are
significantly lower than in the US and UK.
Wage inflation has remained stable and
low. Growth in average agent compensation over the last
year has been effectively zero. Salary inflation is believed
to be at a similar level to the UK and significantly lower
than other offshore locations such as India. The fact
that rates of agent pay have remained stable while agent
numbers have grown 30% is a sign of reassuring stability
in the labour market.
Employment legislation is reasonably
flexible on working hours and overtime – it is perfectly
acceptable for employers to contract with employees that
overtime need not be paid. In any event restrictions on
working hours and overtime cease to apply once staff are
paid more than R89,000 per annum (R7,417 per month).
||Typical Annual salary
|Call Centre Manager
||R372,000 (US$56,278 or GBP30, 845)
||R182,900 (US$27,670 or GBP15,165)
| Inbound agent
|| R54, 954 (US$8,313 or GBP4, 556)
High Agent productivity
On average agents are working 168 hours
per month and team leaders 175 hours per month. The statutory
maximum is 195 hours per month (45 hours per week). This
works out at 39 hours per week, which is roughly mid-way
between the average working hours of UK agents (37.2)
and Indian agents (43.3).
A survey of Cape Town Outsourcers, conducted
by Callinthecape, revealed the rate of absenteeism (percentage
of working hours lost to absenteeism) was 5.9%, within
industry norms. Absenteeism was higher at outbound contact
Low Call Centre Staff Attrition Rates
Voluntary Call Centre staff attrition
rates are low at 5-7% (vs. 35-40% in India) in the major
centres and as low as 2% in the smaller centres (e.g.
East London and Port Elizabeth) and the South African
work ethic appeals greatly to the international market.
A recent study conducted by CallingtheCape,
in association with Deliotte showed that in Cape Town,
a survey of 47 companies (both local and international)
revealed an average attrition rate of 10.7% per annum.
A more detailed survey of the outsourcers
revealed total attrition of 15%, comprising 8% voluntary
and 7% forced attrition. Forced attrition is likely to
be higher in outsource than in captive contact centres,
due to a preponderance of outbound work and more regular
and rigorous performance analysis.
Cape Town’s attrition rate amongst
outsourcers of 15% compares favourably to UK outsourcers
Attrition in India was reported to be
24.3% by ContactBabel in 2003, but is believed to be higher
Low Call Centre Costs.
Seat costs range depending on the call
centre service provider and the type of service required.
Seat costs range from R60 - R150 per agent per hour. (£6
- £12, $10 - $25). Call centre’s offering
low per seat charges will charge performance related fees.
The fees are dependent on the product and the value of
the product being sold.
Most contracts exclude call costs. Despite
there being a drop in international calling tariffs, telecom
costs remain high in South Africa. Call costs range from
R0.45c to R2.00 per minute (4p – 18p, $0.08 - $0.33)
and are dependent on volume and destination country. Mobile
phone calls are more expensive.
Great Fluency in English and other
Language can be a key barrier to off-shoring,
especially for client facing processes such as customer
support. South Africa has 11 official languages, with
English being the predominant language used in a commercial
context. Afrikaans, a widely spoken language is based
on Dutch. Many other foreign languages are spoken in South
Africa, such Portuguese, Italian, Greek, French and German.
Skilled Labour Force
South Africa has an economically active
population of approximately 16,8million people and an
unemployment rate of 31,2% (March 2003, according to Stats
While the population is expected to grow
to approximately 44,9million by 2017, the labor force
is not projected to grow by much, averaging at 16,8million
for the period 2003 to 2017 with 8,4million people in
formal employment in 2017 (6,8million of these people
being employed in the private sector).
South African’s are perceived as
work working and committed.
The South African literacy rate is in the region of 84%
(24% higher than that of India). There are approximately
171,000 people graduating from tertiary institutions throughout
South Africa every year.
Robust Technical infrastructure
South Africa is ranked 23rd in telecommunications
development in the world. The country has approximately
4,92 million installed telephones and 4,3 million installed
exchange lines. This represents 39% of the total lines
installed in Africa. The network is almost wholly digital.
Digital microwave and optical fibre serve as the main
transmission media for the inter-primary network, interconnecting
all major centres.
Great Cultural fit with US and UK
South Africa has historic trade relationships
with many European countries, particularly the UK, Netherlands,
France and the US. As a result, South Africa has a strong
cultural affinity with these regions. More than 560,000
foreigners visit South Africa yearly for business. More
than 1,500 Europeans immigrate to South Africa yearly.
Reasonable Proximity to the US and UK
South Africa is on the same longitude
as Europe and has a maximum time difference of 2 hours,
depending on the season. South Africa also offers the
US a good “time fit” as the East Coast is
6-7 hours behind South Africa and the West Coast is 9-10
hours behind, thus presenting the opportunity of utilising
existing South African call centres in their night or
“down time” to service the US customer base.
These compatible time zones allow for “follow the
sun” processing and business continuity support,
in conjunction with outsourcers in other countries such
as India and the Philippines.
Improved Political stability
According to Control Risk Groups, Risk
Roadmap Report 2004, South Africa's business environment
is positive, with a low political and security risk. This
is further supported by recent large direct investments
by foreign companies. Recently Absa Bank, South Africa’s
largest retail bank, was bought by UK based Barclay’s
Bank. Government has identified the Call Centre industry
as a key growth industry and works closely with the private
sector to promote and grow the industry.
South Africa’s climate rates as
one of the best in the world. This is supported by the
large numbers of tourists that visit every year. During
summer, temperatures vary from 20 – 35 degrees Celsius,
whilst in winter; temperatures can drop to between 5 –
The above information was compiled from
the following public sources: