GBS CREATES JOBS IN KZN
Business Process Outsourcing has grown 10 fold in KZN over the past six years, proving that there’s more to call centres than meets the ear, writes Shirley le Guern
In the business sector, good news is hard to come by these days. But, during November, the spotlight has been on Durban as a growing hub for the global business services (GBS) and business process outsourcing (BPO) sectors which are an important potential salvo for South Africa’s youth unemployment woes.
First came the roof wetting for the third operations centre at the Rewardsco campus on Umhlanga Ridge and then the hosting of the successful South Africa GBS Investor Conference which welcomed around 300 local and international business leaders.
The closely related sectors include call centres, technical support and back and front office services for major multinationals and local brands. According to the Department of Trade, Industry and Competition (DTIC), which has thrown its weight behind developing this emerging industry, it created an estimated 14 300 new jobs during 2021 whilst also netting R1.9-million in export revenue.
It comes as no surprise, then, that South Africa has been voted the ‘Most Preferred CX Offshore Destination’ for the past two years.
According to Statistics South Africa, GBS and BPO are already contributing 11.2% to the South African economy – more than financial services at 6.1% – and the cool off doesn’t seem to be coming anytime soon. Instead, what is hotting up is competition.
Russell Curtis, head of Invest Durban, said that the conference, which was the ideal mechanism to market South Africa to an international audience as a scalable delivery destination capable of offering real value across the GBS value chain, certainly enhanced opportunities to attract new investors.
“The GBS sector growth trends have reflected a 24% compound annual growth rate during the past five years. This has contributed appreciably to stimulating our country’s economic growth and strengthening South Africa’s profile in the global market. In line with this, the national job creation target for the sector is 500 000 new employment opportunities by 2030,” he pointed out.
Curtis said that Durban had already taken its place as a top destination when it came to customer experience-centric sales and lifecycle management, offering exceptional business-to-consumer and business-to-business frontline BPO sales talent and servicing for both local and global markets.
A HOME GROWN SUCCESS STORY
For Curtis, one of the most positive developments was the official launch of the R300-million new Rewardsco operational centre just prior to the conference. The company, which is a leading provider of outsourced sales and distribution services, already has 600 vacancies and is expected to open up another 1 200 workstations with the launch of this new facility.
Another to celebrate the success of the conference and the growth of the industry in Durban, (which included a visit to the Rewardsco campus) was Reshni Singh, CEO of industry body Business Process Enabling South Africa (BPESA).
“It was so wonderful to welcome some of the industry’s most influential personalities to the conference where they got to unpack relevant topics impacting the GBS sector today. In addition to inspiring talks and workshops, attendees were treated to site visits to get first-hand insights into the potential the country offers. During the three-day engagement, this national conference offered several opportunities for domestic stakeholders and international investors to convene, learn, co-create, and discover the many benefits South Africa offers as an attractive, scalable offshore location,” she said.
Singh said her relationship with Rewardsco had developed over time and dated back to 2009 when she visited the company at its previous premises in Riverhorse Valley. Back then, GBS was only just emerging and Rewardsco had 71 employees.
“I remember my first visit because all I was seeing in Durban were sweatshops. This one was really different. The one thing that hasn’t changed is that they are firmly rooted in investing in infrastructure as well as in their people,” she said.
With the maturation of the sector beyond basic call centres to incorporate all IT related services, came the creation of BPESA to represent the industry. Singh now heads this.
“The nice thing is that there’s collaboration and co-creation in everything that we do in this particular sector. Rewardsco is very much involved as one of the co-creators with government of the GBS Master Plan. This talks to creating 500 000 jobs by 2020. 80%of that is focussed on youth unemployment. Currently, in the sector, about 85% of the jobs are actually youth jobs. So, aside from the (launch of the) building and all the innovation and technology, there has definitely been a commitment by this organisation to contribute to that masterplan,” she said.
Although much of the future focus is on international business, Rewardsco, despite being one of the province’s biggest success stories, is only now targeting offshore markets.
But cementing a domestic niche first is imperative before venturing offshore, Singh noted.
Group commercial director, Dylan Koen, said the company’s strategy was to develop and grow both organically and domestically before looking offshore. The R300-million investment was an important milestone that reflected that Rewardsco was now ready to expand its business internationally.
Sven Steenfeldt-Kristensen, managing director of Rewardsco, said the real impact of what had been achieved was best appreciated by looking back to its humble beginnings and its start around present day chairman and father Michael Steenfeldt-Kristensen’s dining room table in 1996.
Back then, there were just three employees. Today, the business employs 2 000 people. By the time it is operating 24/7 and servicing customers in the likes of North America, Australia and even the UK, this could reach 6 500 in the medium term.
“When Rewardsco first started out, our first premises was next to East Coast radio house with sugar cane as far as the eye could see. We soon outgrew that property and built our first one down at La Lucia Ridge. This served us very well but we outgrew that one too. So we put together a custom built facility down in Riverhorse Valley which also served us well. But it had a lot of challenges, especially when it came to transport. So, we went out looking for premises to lease but couldn’t find anything suitable, something that met our standards,” he said during the roof wetting ceremony.
An introduction to Zenprop which intended to develop the property in Ncondo Place followed. The first custom-built facility came on stream in 2014. From there, the campus grew sideways, ultimately becoming a three-building campus that reflected the strong growth of the business.
Rewardsco’s entrepreneurial journey began with a focus on loyalty and incentive programmes that were outsourced to it by major brands such as Pick ‘n Pay and ABSA. But, according to Koen, major growth began in 2007 when the business moved from being just a niche provider of incentive and loyalty programmes to working predominantly in the BPO sector.
Since then, two key factors underpinned ongoing expansion.
The first was the pandemic which changed market dynamics and increased demand for products offered by Rewardsco and partners such as Vodacom, MTN and Telkom.
The second was diversification.
“We invested heavily into online and digital whereby we created our own lead generation business which is now a Google premium partner. This has allowed us to augment our business as a telecommunications reseller. This side of our business – known as www.mondo.co.za – has grown by nearly 400%, which is significant,” he said.
Looking forward, the company is expected to grow by an average of 25% per annum for the next five years.
Koen continued: “We have an extremely proud domestic business within which we continue to invest and innovate. At the same time, the launch of this new building and a decision to move into the international market is something of a new beginning.”
He said the intention was always to grow the business exponentially. But, to accommodate this, Rewardsco had to have the right premises. “We did not want to compromise and develop sweat shops like a lot of others have done. We have now built three buildings that are all P-Grade and 5-Star rated.”
He added: “This is a strong endorsement of our belief in KZN and eThekwini as well as in Umhlanga. When you collect a lot of similar businesses into an area, you create a centre of gravity which attracts a multitude of clients from different geographies. That puts you on the map. If you stand up as a high calibre business like we do, we believe this can only be a positive thing.”
The five levels of floor space in Block A, and adjoining Rewardsco facilities, feature spacious cubicles, comfy chill areas and restaurant facilities set within a sea-facing indigenous landscaped precinct. Other features include natural light and an open, free-flow plan that fosters interaction and collaboration.
Inbuilt features within the Rewardsco campus proactively address potential challenges to growth. Each building is fully redundant when it comes to emergency infrastructure and each has its own generator to ensure that services will not be interrupted during electricity outages.
The three operation centres are joined by impressive sky bridges.
THE BPO SKILLS QUANDRY
Of the 275 000 people currently employed in the call centre space nationally, 57 000 reside in KwaZulu-Natal. Rewardsco is one of the biggest single employers at 2000. The new building brings Rewardsco’s total operation covering to 20 000 sq/m, providing capacity for a further 1 200 employees.
“We have capacity for approximately 600 consultants now. That will take us to 2 500 nationally,” he said.
Further international contracts that are expected to come on stream next year could boost this to 3 200 within as little as a year.
“It makes sense to pursue business growth opportunities within the global business services space. We’d be remiss not to capitalise on these because they represent new business lines that offer greater volumes than those that are likely to emerge domestically.”
While the creation of a night shift component enables Rewardsco to fully utilise its current assets, it also increases the company’s exposure to a major risk that is shared by its competitors – a large pool of potential employees but a huge lack of skills.
According to StatsSA, by the end of the second quarter of this year, youth unemployment was 63.9% for those aged between 15 and 24, nearly twice the national unemployment rate of 34.5% and more than four times the global average of 13.6%.
“Nationally, this sector is seeing unprecedented growth at the moment, specifically in KZN where, over the past six odd years, we’ve literally grown 10 fold. If you spend a lot of time in the Umhlanga precinct, you will see that there are a number of contact centres, predominantly servicing the offshore market. The result is that there’s a lot of competition for skills. That has resulted in what we are calling a resource crisis. At the moment, because of the shortage of talent, people are starting to poach. So, my message to operators in this precinct is that you have to become an employer of choice and create a really compelling case for your staff not to leave you. This industry is about people, so investing in them is one way to become highly successful, especially in the offshore space,” Singh explained.
Koen believes that Rewardsco can claim the moniker” Employer of Choice” thanks to the creation of a sophisticated third operational facility and ongoing investment in skills development and staff retention. The aim is to offer long-term career development prospects rather than just entry-level jobs.
“One of the main challenges in our industry is that, when people apply for work, they do not look at it in the context of a career. In many instances, it is just a case of just trying to put food on the table. Trying to turn that mind set into something that is more long term and career orientated is a challenge and an opportunity – and something that we take seriously.
“We can’t deny that unemployment among youth at around 60% is a threat to our society and, while we certainly can’t do it on our own, being a part of creating half a million jobs by the end of the decade is a unique opportunity for which we all have to collectively take a responsibility. That is something which is very exciting,” Koen concluded.