Why is Africa so big in the outsourcing world?
Outsourcing opportunities used to be based mainly on the low cost of labor but all that has changed. Confident in its abilities, Africa looks set to conquer this flourishing market.
Major companies are being lured to outsource projects to African countries mainly due to their fast growing economies and cheap labour. And even though outsourcing could be based on the dubious intention to find cheap labour, it could have a positive impact on people in these developing economies.
The most obvious reason is the low cost of outsourcing but there are other factors to consider too. In Africa, quite a few countries compete in the global outsourcing markets. For example Kenya and Nigeria export business and IT services mainly to UK and US based clients, relying on the absence of jet lag, their cultural similarities, linguistic proximity and quality infrastructure. It is also good for Africa and helps tackle youth unemployment and underemployment boosting economic growth.
Examples of the benefits associated with outsourcing include:
1. Reduced operation, infrastructure and recruitment Costs
2. Risk-Sharing is possible because after outsourcing, your vendor is responsible for all the risks related to their project and as specialists, they'll be better suited to handle it.
3. Increased flexibility to meet changing business and commercial conditions and this is very important in tech and AI related fields.
4. Access to a larger talent pool and specialized workforce.
There are typical problems that could arise such as lack of adequate cultural context which could affect the quality of work delivered. You may also need to spend more time training to avoid poor knowledge transfer although this can be solved by using a company like isahit who has expertly trained workers in the region. Also the contractual and legal processes are not as standardized and it depends a lot on the vendor’s location so you may spend more time preparing the adequate legal documents.
Companies that outsource to Africa include multinationals like Orange, Vodafone, Microsoft, Intel, Virgin, among many others.
There are a multitude of services that can be effectively outsourced to Africa including:
1. IT support
2. Data entry and database management
3. Call center services
4. Data labeling
5. Transcription
6. Content creation and writing services
7. Engineering services
8. Software development
9. Photo editing services
10. Virtual assistants
11. Web analytic services
All these jobs can be done remotely and on the basis of an independent contract.
The African continent boasts of a highly qualified workforce who are often unemployed or underemployed. This is a problem that is easily solved when companies outsource projects to Africa and also advantageous to the companies themselves as they get cheaper labour. Research has also shown that these workforce also have high levels of emotional intelligence, show low attrition rates, and are extremely hardworking and dependable.
Hiring African web developers, content writers, photo editors, customer service reps, transcription specialists, or data labeling specialists doesn’t just make perfectly good sense for your business, it also empowers individuals living in some of the poorest areas in the world and enables them to cater for and take care of their families. For example, Nigeria’s outsourcing sub-sector alone is worth $286m and employs over 16,500 people as at 2021 and is estimated to be almost twice that amount by 2023.
In order to position your company for outsourcing success, there are a few things you should consider including setting out definite goals and guiding rules, evaluating your current infrastructure to know what you can afford and identifying possible problems and challenges that may arise along the way. You also need to get familiar with different outsourcing models to be able to choose the one that suits your needs. Endeavour to always follow the right steps that will lead to outsourcing success.
In today's business landscape, cutting costs has become necessary for survival and most businesses are in search of a qualified and affordable workforce. Although there seems to be other more popular outsourcing markets for IT, data annotation and software-related needs in countries like India, the Phillipines and Vietnam, Africa is gradually positioning herself as a strong contender in the outsourcing sector and this could lead to a new wave of economic growth and development on the continent.
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