The contact centre and business process outsourcing (BPO) industry in Cape Town has enjoyed unprecedented growth during 2005. There are now 167 contact centre and BPO operations employing a total of 14,345 people, up from 116 operations and 10,014 staff in 2004. This represents growth of 39% in the number of agent positions and 43% in the number of staff.

These figures are revealed in Calling the Cape’s 2005 Key Indicator Update, a sequel to last year’s comprehensive survey conducted in association with Deloitte. The research, carried out by Voice Recruitment and analysed by Deloitte, confirms that the industry is thriving beyond expectations – but recommends that the government and private sector must continue co-operating to ensure that future growth is not sabotaged by skills shortages.

Calling the Cape has also attracted new investment in 2005 worth R506m, up 19% from the R426m secured in 2004. 76% of this investment originated from the UK. As these investments unwind in the coming years, an additional 2 000 new agent positions will be created, fuelling further growth in the industry. Since over 50% of BPO investments are spent as agent salaries, the investment boom is bringing real financial benefit to the Cape Town labour force, as well as new job opportunities.

“The Micro Economic Development Strategy has identified call centres and the business process outsourcing as a critical sector in the Western Cape. We have developed a package of interventions which includes addressing skills shortages to ensure an enabling environment for call centres and BPO’s to reach their full potential and to create as many jobs as possible,” said Provincial Minister of Environment, Planning and Economic Development, Tasneem Essop.

“Our expectation was to create 2,000 new jobs this year,” says Calling the Cape executive director Luke Mills. “In fact we have well over 4,000 new jobs, which is immensely encouraging. Cape Town is developing an international reputation for high quality of service and is attracting high calibre investors, both international and domestic.”

The growth in jobs has been paralleled by a small increase in attrition, and above-inflation salary increases, both potential warning signs of increasing competition for skills. However, Mills says Cape Town’s attrition rate of 14% remains well below international norms, and is particularly impressive in an industry that has grown by 70% in just two years.

He cautions that skills shortages in specialist positions could become an issue if the industry continues to grow at current rates. “While agent talent is abundant, middle management take three years to reach full maturity and capability, so the sector needs to take a progressive attitude to skills development.

“It’s also vital for government and the industry to continue working together to develop a co-ordinated and appropriate response.”

Mills is confident that the industry will continue to grow through 2006. “Cape Town is offering increasingly complex and sophisticated BPO services. The industry still has extraordinary potential to develop and empower new entrants to the labour market. ”

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