Why small businesses are outsourcing to South Africa
By Louis White
2 May 2018 — 12:15am
While our cricketing relationship may have soured with the South Africans, our business dealings seem to be rising with Australian companies increasingly looking for alternative cheap employment options other than the Philippines.
“For the past 18 months I have been using South Africans in Cape Town to help me with my business here in Australia,” Peter Wilson, founder of The Shopper Collective, says.
Australian small businesses are outsourcing to South Africa.
Outsourcing data analytics
“I outsource in the area of data analytics. I work with a data scientist for advanced analytics such as segmentation and a team of highly experienced market research professionals. I also have a team of creative people over there, who are highly experienced in retail and shopper marketing, and who have experience working with some of the world's biggest brands.”
The Shopper Collective converts shopper research into insights and ultimately shopper action. Wilson’s turnover, which is about $300,000 a year, involves only employing contractors when needed. He employs up to eight contractors in Australia and almost a dozen in South Africa.
“My business structure works well for me because I employ people on contracts when needed,” Wilson says. “Cost efficiencies are the main main reason we hire people in South Africa. The Australian dollar is still comparatively strong against the ZAR (11:1 ratio), which means I can work with a highly skilled and trusted team at less than what I would pay in Australia.
“The time zone works too. I often brief my associates in South Africa mid to late afternoon, and I have responses in my inbox by the time I wake up the next morning. That gives me the opportunity to be always on, even for my small business.
“Finally, culturally, I am dealing with people who largely have English as a first language, and who share similar lifestyle and sporting interests, as the average Australian. The culture of work is also very similar, which helps immensely when close collaboration is necessary.”
South Africa's transformation
According to Austrade, South Africa has transformed into a sophisticated manufacturing and service-based economy. The services industry comprises about two-thirds of the country’s GDP, while the mining and agricultural sectors now contribute around 6 per cent to GDP.
“It's my belief that a lot of the businesses that moved their activity to the Philippines for a significant cost saving are now concerned by their customer dissatisfaction,” Darren Lord, chief executive officer of The Smart Group, says.
“They are now looking for a better option but bringing the work back into Australia isn't an option because it would double their budget for this operation, which a lot of businesses can't fund.”
The Smart Group, which is based in Richmond, Melbourne, specialises in sales servicing inbound and outbound contact centre activity acr...