The creation of 6459 additional jobs due to the government upscaling its support for its Global Business Services (GBS) incentive in the last quarter of 2020, has put the country on track to reach its target of 100,000 jobs by the end of this year. And attaining this goal is even more likely following South Africa being ranked as the
top location for the sector for 2021.
South Africa aims to create half-a-million jobs in shared services and Business Process Outsourcing by 2030
The job figure was released in the latest Presidential Employment Stimulus progress report. The GBS sector and digital communications in its entirety, have been identified amongst those that are key to boosting job creation and kickstarting the economy. The state aims to create 500,000 jobs by 2030 in the GBS sector, which is the evolution of shared services and Business Process Outsourcing (BPO).
The incentive was initiated by the Trade, Industry and Competition Department in January 2019 to create jobs in the sector with a focus on youngsters. GBS includes call centres and other digital technology services for domestic and export markets.
“The GBS incentive is designed to position South Africa as an attractive destination for business services and to expand on the types of jobs supported to include more complex technical and specialist skills,” the report for February 2021 reads.
“South Africa has become a leading global player as a result of the country’s low costs, large pool of English speaking talent, and effective infrastructure (including digital and cloud technology).”
The government is hoping that through incentives, the country’s GBS sector will become more attractive as costs have been notably reduced and South Africa is being punted as the gateway to the continent. So far various government incentives have supported 14,300 new jobs in the sector with R1.9 billion in export revenue during the pandemic.
Last week South Africa was named as the Most Favoured Offshore CX Delivery Location for 2021, in the Annual Front Office BPO Omnibus Survey. According to the department, the country was ranked number two last year.
“South Africa has beaten stiff competition from India, Philippines, Malaysia, Poland, Egypt and Northern Ireland to claim the top award for the first time,” it said in a statement.
Sector-growth was interrupted by the outbreak of the COVID-19 pandemic in 2020 that led to closure of businesses in many parts of the world.
“However, the Minister of Trade, Industry and Competition, Ebrahim Patel issued regulations during the lockdown that enabled call-centres supporting local and global essential services to continue to operate, where firms in other locations could not.”
Patel said South Africa’s “reimagined industrial strategy” laid the basis for growing established sectors such as clothing, poultry, sugar and steel, and emerging or new sectors like call centres, the green economy and digital industries.
“Industrial development is no longer only about manufacturing – productive services like business process services (BPS) and film-making are examples of new job-creators that we are actively backing,” he said.
“The digital revolution is placing greater emphasis on provision of strong, technical support through call-centres. Firms in the sector want to be located close to a source of skilled workers. The rapid expansion of business process services is a tribute to the skills of young South Africans and evidence of what South Africa has to offer as a business and investment destination.”
The Presidential Employment Stimulus report says the department has also entered into a memorandum of agreement with Business Process Enabling South Africa (BPESA) to collaborate on marketing and skills development initiatives for GBS. BPESA reports to the department on job creation numbers for the incentive.
Between October and December 2020, despite the effects of the Covid-19 pandemic, many local service providers signed outsourcing deals with new global brands while existing organisations increased their workforce teams and investments into their GBS operations, according to the report.
“The GBS incentive has been vital in ensuring global competitiveness. Our clients, and the jobs they bring, have many other location options from which to choose and without the incentive there is a material risk that we would be priced out of the market,” said Martin Roe, who is the Group CEO of CCI SA (Pty) Ltd, which is a participant in the GBS incentive.
A total of 64% of the jobs created were amongst women and 42% of the jobs were in retail, followed by 33% in energy and utilities, and eight percent both in insurance and telecoms. A total of two percent was in technology.
“Frontline, voice-based services for the retail, telecom, utilities and insurance industries collectively logged the highest job growth with 4,924 new positions, 5006 jobs, or about 92% of new hires, consisted of youth workers aged 18 to 35,” it reads.
A total of 593,076 opportunities, which include all programmes where participants have begun work as well as those where recruitment has been completed and placements/awards are being finalised, were created in the fourth quarter through the stimulus package across the economy.
South Africa recently received a $1bn loan from the Brics New Development Bank to finance the “creation of employment opportunities” as part of the first phase of the Presidential Employment Stimulus.
By: Amy Musgrave