A report commissioned to establish global demand for business process outsourcing and offshoring (BPO&O) services, and how well South Africa is positioned to meet this demand, was released last week by McKinsey and Company.

The report found that, if the country is proactive, and acts quickly, it can create 100,000 new jobs over the next five years. This would require a concerted effort from government, labor and the private sector, however, something which the group that commissioned the report aims to address.

The report was commissioned in September last year by the City of Johannesburg, in partnership with the ComMark Trust (a regional initiative aimed at addressing poverty in the Southern African Customer Union) and the South Africa Foundation (an association of local companies which promotes growth and business interests in SA).

Using the study as a base, government, the Business Trust, South Africa Contact Centre Community (SACCCOM) and other stakeholders are now in the process of putting in place initiatives to ensure that action is taken to enable SA to take advantage of this window of opportunity.

These include compiling a sector strategy document and business plan to drive the sector forward. The draft sector strategy document has been based on the report, and outlines five steps that need to be taken to get the country to the point where it is a Tier 1 BPO&O destination.

The business proposal has also been based on the report, and will outline a vehicle to be created to train some 100,000 people over the next five years, to meet the demand that will be generated should the sector strategy be successful.

The report highlights seven areas that need attention: The availability of quality talent; cost of operations; risk of operations; ease of set-up; enabling regulations; vendor landscape and marketing effectives.

Regarding the talent pool, the report states that SA needs to train some 40,000 to 60,000 agents a year. Cost of operations relates to the ongoing high telecommunications costs, as well as cost of labor, which could be reduced by skilling students at matric level. Most call center agents in SA today are graduates, hence the higher labor costs.

On the regulatory front, McKinsey says concerns have been raised around the flexibility of labor regulations, particularly around overtime work. Also, SA would need to put more financial and nonfinancial incentives in place.