Kenya has been ranked the world’s eleventh best country to outsource business processes to, beating advanced economies like the United Kingdom and the United States, due to its affordable labour costs and English proficiency of workers.
Business process outsourcing (BPO) is the practice of hiring a third-party company to handle back-office functions like customer care, telemarketing, data entry, content moderation, and IT support, among others.
A global ranking of 193 countries by American outsourcing consultancy Ataraxis places Kenya 11th globally, and third in Africa, behind South Africa and Nigeria, highlighting its competitiveness in the international industry.
Kenya’s competitiveness is primarily due to labour affordability and an English-proficient workforce, bolstered by good digital infrastructure, ready availability of talent, and business stability, according to Ataraxis.
Nairobi’s performance in the BPO market beats that of the US and UK, which are homes to some of the world’s largest outsourcing firms, including Samasource and Teleperformance, which already have major operations in Kenya.
“The advantage that Kenya has is that labour costs are very competitive, almost close to the global minimum, without sacrificing on English proficiency,” said George Atuahene, Ataraxis CEO.
“While infrastructure and talent scale are still developing compared to more mature hubs, its rapid digital transformation makes it an ideal spot for companies looking for high-quality, cost-effective technical and support talent.”
Globally, the Philippines tops the world BPO market, due to its developed digital infrastructure, added to English fluency and a readily available and affordable workforce.
Other top performers ranking above Kenya are Malaysia, India, Chile, Peru, Indonesia, Argentina, and Romania, which have business-level English proficiency and a huge and affordable labour force.
The UK and US rank 29th and 86th, respectively, globally, largely due to expensive labour costs, which are among the highest in the world. The US, for instance, performs exceptionally in English fluency, digital infrastructure, and availability of labour, but its costs are the fifth highest in the world, after Monaco, Liechtenstein, Luxembourg, and Switzerland.
“The United States has a perfect score in digital infrastructure and a very high score in business stability, making it one the world’s most reliable locations for critical business operations,” said Mr Atuahene.
“Without the labour cost variable, the United States would rank among the strongest global talent markets. A US-company can often hire several offshore staff for the cost of one domestic employee.”
Currently, most of the roles outsourced to Kenya are in data entry and analysis, AI-training, content moderation, telemarketing and digital marketing, graphic design, and copywriting.
However, experts project that Kenya’s edge and market share in the industry will improve after the US considers new rules to ensure customer care outsourcing by US firms goes to English-proficient countries or stays within the country.
In a move to promote consumer welfare, the US Federal Communications Commission (FCC) said it is considering limiting the use of foreign call centres in the country, and requiring foreign-based customer service workers to be proficient in American-standard English. FCC estimates that 70 percent of US companies outsource at least one department, including customer service and call centre operations to foreign countries, with India currently leading.
Brendan Carr, FCC chair, said “too many Americans have struggled to resolve an issue with a representative due to cultural and language barriers,” necessitating the restriction of call centres to English-proficient countries.
“I think this will really tip the scales in favour of countries like Kenya, where labour is already cheap, and the workforce is generally fluent in English, as opposed to other countries where labour is cheap, but workers struggle to speak good English,” reckons Mr Atuahene.
Kenya’s cheaply available labour has, however, been a cause of concern for many activists, who argue that it has led to the exploitation of Kenyans to do mentally draining tasks for poor pay.
