Companies that outsource to South Africa: A quick peek

Which companies outsource to South Africa?

Many global firms outsource to South Africa, including IBM, Lufthansa, Virgin, Shell, and BPO giants like Sykes and TeleTech. They chose the country for its English-speaking talent, lower costs, and helpful time zones.

• Companies that outsource to South Africa gain access to a young, multilingual workforce.
• Lower operating costs make the country a strong outsourcing base.
• Its time zone overlaps with major cities in Europe and Asia.

South Africa offers more than scenic landscapes and lush Winelands. Cape Town, one of its capital cities, also serves as a central business hub. There, international companies sit alongside local firms.

Companies that outsource to South Africa chose the country for a variety of reasons. For example, most locals speak English, and the economy keeps growing.

Global conglomerates and BPO firms have found a home in South Africa. As a result, they have lifted both the economy and the quality of life there.

The country offers a growing economy and a multilingual workforce. So many businesses find it hard to say no.

They outsource non-core services to developing countries to widen their reach without heavy spending. In fact, it is far less of a hassle than opening in major cities across the US, Asia, and Europe.

Eight leading companies that outsource to South Africa

South Africa may look like an up-and-coming player in outsourcing. Still, many businesses have already sent work to the country.

So here are some of the leading companies that outsource to South Africa.

1. IBM

There is no doubt that IBM is one of the biggest computer hardware makers in the world. So it is only a matter of time before it has offices in every major capital.

With that growth comes many chances to hire locals as in-house staff. At the same time, IBM keeps outsourcing to South Africa to widen its reach.

Stats: IBM has an office in Sandton, SA. Its services span application integration, IT infrastructure, artificial intelligence, blockchain, cloud computing, and business operations.

2. Fujitsu Siemens

One goal of Fujitsu Siemens is a future where technology connects people anywhere. Because of that vision, the company keeps improving its tools.

For the firm, outsourcing non-core services to countries like South Africa is a step toward a brighter future.

Stats: Fujitsu Siemens has run offices in South Africa across busy cities such as Johannesburg, Bloemfontein, Port Elizabeth, Durban, and Cape Town.

Its services focus on IT solutions. For example, these include cloud computing devices, integrated systems, servers, and mainframe support.

3. Lufthansa

Lufthansa outsourced its customer service network to South Africa decades ago, according to News24.

This move helped push other BPO firms to start hiring South Africans. As a result, outsourcing to SA opened up the country’s strong workforce.

Stats: About 1% of Lufthansa employees are located in Africa, according to Statista. With an In-Touch office in Cape Town and another in Johannesburg, the airline covers much of the continent.

Lufthansa is known as one of Europe’s biggest airlines. So its core services revolve around commercial flying.

4. Virgin

Along with big names like Accenture and Genpact, Virgin helped make South Africa as a hotspot for outsourcing companies.

With these names backing the country, more players now look at SA for their outsourcing needs.

Stats: The Virgin Group employs several thousand people at its Cape Town office. In addition, the group spans many sectors, from travel and leisure to telecom and media.

5. Sykes

Sykes is a well-known name in the outsourcing sector. In fact, it is one of the biggest players in world-class business support.

From non-voice accounts to customer-facing roles, Sykes has it covered.

So it was no surprise when Sykes opened an office in SA. After all, locals speak English, many hold college degrees, and the time zone sits close to Europe and Asia.

Stats: Sykes South Africa provides BPO services to firms in the region. For example, these range from customer care to back-office support.

6. Carphone Warehouse

Carphone Warehouse made its first offshoring move in 2007. It chose Johannesburg, South Africa, the country’s most populous city.

The retailer first hired about a thousand people. Later, it expanded across the country with 850 billed seats.

“This local expansion goes to show that, in terms of quality and performance, SA can not only compete against the UK and the rest of Europe for contact [center] business, but is able to win it,” said Andrew McNair, GM for the TalkTalk operation at Merchants South Africa.

Stats: From its Johannesburg office, Carphone Warehouse grew into a leading UK mobile phone retailer. Its goal was to make the latest phones more affordable and easy to get.

7. Royal Dutch Shell

The oil and gas giant tasked South Africa with serving customers in the Netherlands, Belgium, and Luxembourg. This worked well because many locals speak Flemish and Dutch.

South Africa also sits at the southern tip of the continent. As a result, its time zone overlaps with those countries.

Stats: Shell continues to operate in SA from its Johannesburg office. Since 1902, it has offered retail and commercial fuels, oils and lubricants, aviation, marine, manufacturing, and upstream exploration.

Shell also employs thousands of staff across Africa.

8. TeleTech

Another BPO giant landed in South Africa. As a result, it opened new jobs to the country’s multilingual locals.

TeleTech was the first multinational business process outsourcing company to pick SA as one of its locations. Because of the country’s growth, TeleTech was not the last big firm to set up in Cape Town.

Stats: TeleTech opened its first SA office in Cape Town in 2007.

Its services cover processes that companies can outsource for a lower cost. For example, these include customer support, back-office services, financial services, and retail technology.

Why do companies outsource to South Africa?

One clear reason companies outsource to South Africa is lower operating costs. So they tap into the country’s steady growth while spending less.

South Africa has much that firms find enticing. For example, it offers a young workforce, multilingual locals, and time zones that overlap with Europe and Asia. As mentioned above, these are the main draws.

During their research, decision-makers weigh these points against each other. So they can judge whether outsourcing is the best move.

Expansion through outsourcing is not always the cheapest choice up front. Still, its cost savings show up down the road. In addition, with enough time, real growth becomes possible.

Frequently asked questions about companies that outsource to South Africa

Why do companies outsource to South Africa?

Companies outsource to South Africa for lower costs and skilled talent. In addition, most locals speak English. As a result, service quality stays high.

What services are outsourced to South Africa?

Firms outsource customer support, back-office tasks, and IT work. For example, Shell and Lufthansa run customer service from SA. So the range is wide.

Is South Africa a good outsourcing destination?

Yes. The country offers a young workforce and helpful time zones. So it competes well with the UK and the rest of Europe for contact center work.

Which cities in South Africa handle the most outsourcing?

Cape Town and Johannesburg lead the way. Both host many global offices. As a result, they anchor the country’s BPO industry.

Key takeaways

• Global firms like IBM, Lufthansa, Virgin, Shell, Sykes, and TeleTech outsource to South Africa.
• Lower operating costs are the top reason companies choose the country.
• South Africa offers a young, multilingual, English-speaking workforce.
• Its time zone overlaps with major cities in Europe and Asia.
• Cape Town and Johannesburg host most of the country’s outsourcing offices.