Why Ethiopia Is the Next Talent Outsourcing Destination

By user
March 4, 2024

It is estimated that roughly 300,000 jobs are outsourced each year in the U.S alone. Most of these jobs are outsourced to Asian countries like India, Malaysia and the Philippines which are known for being the best outsourcing destinations.

However, as more and more businesses choose to outsource to Asia, the outsourcing markets are quickly becoming saturated. It seems like the trend in outsourcing destinations is changing. Many companies are taking their business to a new continent – Africa.

Africa’s fast-growing population and markets are presenting immense opportunities for businesses. Foreign companies are flocking to do commerce in Africa. And guess what? They’re succeeding. For example, South Africa is now the third emerging BPO destination, competing with the likes of India. Africa will become the world’s next great manufacturing center as industries shift from Asian markets to lower-cost regions.

Here at MMCY, we have over fifteen years of experience. We are pioneers in the outsourcing industry in Ethiopia, so we might know a thing or two about outsourcing. In this article, we will look at some of the factors that help make Ethiopia a top talent outsourcing destination.

Improved Infrastructure

This past October, Kenyan telecommunications operator Safaricom launched its mobile network in Ethiopia. This ended state-owned Ethio-Telecom’s monopoly and made Safaricom the first private operator in one of Africa’s largest telecom markets. 

The Safaricom launch is introducing high-quality network and mobile services through faster internet, high-speed fiber connectivity, and game-changing mobile money services. Internet redundancy will soon be a thing of the past in Ethiopia. 

This type of infrastructure improvement is attracting many multinational companies to invest in Ethiopia. All these positive changes are sending out a loud and clear message: Ethiopia is open for business.   
 
And while there is no doubt that these infrastructure changes are bound to drive companies’ desire to outsource to Ethiopia, they are not Ethiopia’s main asset. What sets Ethiopia apart from all the other countries are the people. 

Young and Skilled Talent Pool 

Ethiopia’s massive, youthful population is shaping the country as a promising market with immense business opportunities. As of 2023, Ethiopia’s population has exceeded 120 million. Moreover, about 70% of Ethiopia’s population is under the age of 30, indicating a vibrant and youthful demographic, poised to shape the future of the nation and, potentially, the continent.

The quality of young talent in Ethiopia is exceptional, as there is a huge volume of STEM graduates. This younger generation of graduates are tech savvy and have the skills and knowledge to compete internationally. And since university courses in the country are offered in English, graduates from Ethiopia are also fluent in English. However, the stark reality remains that the domestic job market struggles to satiate the ever-increasing demand for employment amongst this burgeoning population.

In an effort to connect these graduates with the international companies, the private sector has established the Ethiopian Outsourcing Association (EOA). Their mission is to drive change in policy frameworks and talent gaps while promoting Ethiopia as an outsourcing destination to the rest of the world, in order to improve the ecosystem for both current companies and new entrants. Some member companies of the outsourcing association are ExcellerentR&D , and Africom Technologies.

International companies that turn to Ethiopia for their outsourcing needs will not only be creating jobs on a continent that needs it, but they will also be giving the talent a chance to learn and perfect marketable skills.

Affordable Prices

Not only is there a massive supply of labor in Ethiopia, but the lower wage rates make it cheaper than in most parts of the world. Ethiopia offers more affordable prices compared to other popular outsourcing destinations like the Philippines and India, so businesses can experience huge cost savings on salary and wages. Companies can also save money when setting-up since the operating costs are cheaper in Ethiopia

However, cheaper doesn’t mean that quality has to be sacrificed. A common concern is that the workforce isn’t as skilled or qualified. But Ethiopia is investing heavily in education and training programs, resulting in a large pool of highly skilled professionals. This means that businesses can find workers with the skills and expertise they need to get the job done right for a fraction of the cost of hiring an in-house team.

Additionally, Ethiopia is offering favorable tax policies that can further reduce costs for businesses. Which leads us to our next point…

Government Incentives

In an effort to increase job opportunities within the country, the Ethiopian government has also been taking steps to encourage the Business Process Outsourcing industry. MMCY has been able to experience immense growth in the last few years because the Ethiopian government has shifted its economic outlook towards building a BPO industry supported by government policy.

The Ethiopian government is adopting policies to attract foreign investors and improve the ease of doing business. They have reduced trade barriers, cut corporate taxes, and strengthened regulatory and legal systems. For example, the government has mandated that the Ministry of Technology create over 2 million tech jobs by 2030, giving as many incentives as possible to ensure that happens.

Such incentives and improved business conditions are attracting more foreign investors and making outsourcing to Ethiopia easier. As a result, a lot of outsourcing companies are beginning to pop up in Ethiopia.

Youth Empowerment and Job Creation

Along with a youthful population, Ethiopia has a high rate of urbanization, and the country is becoming more industrialized and service-based. And while more Ethiopian youth are enrolling in universities, many graduates struggle to find jobs, let alone jobs related to their field of expertise.

One of MMCY’s goals is to bridge that gap by creating more jobs, and so far, we have been successful. Since 2008, we have grown from a small Cvent shop to a talent outsourcing company that provides specialized remote resources that serve as an extension of our client’s team.

We now have over 600 employees and offer a wide range of services in various business sectors. Our team members are our greatest asset and the foundational element for our success. But to sustain our proven track record of success recruiting elite local talent and our ability to scale up our operations, we’ve had to collaborate with the top universities in Ethiopia.

We are partners with academic institutes across Ethiopia to recruit strong candidates with relevant technical knowledge and marketable soft skills into our talent pool. Once candidates become employees, our Learning and Development department offers diverse training programs and curriculums to nurture our young professionals and unleash their true potential.

Economic and Social Benefits: A Symbiotic Growth

The financial implications of outsourcing to Ethiopia extend beyond mere fiscal metrics; they permeate social aspects, affording companies the opportunity to instigate substantial, impactful change. By investing in people, championing education, and fostering skill development within the local workforce, businesses are not merely creating jobs. They are integral players in elevating living standards and driving socio-economic advancements.

Ethiopia is transforming to an attractive location for talent outsourcing. Apart from the economic benefits of conducting business in Ethiopia, companies have the opportunity to enact meaningful change. Thus, by investing in the people, training and educating the local workforce, and creating jobs that are needed, businesses will be improving living conditions. 

The future is bright, as evidenced by the young workforce and the drastic improvement in infrastructure. It’s safe to say that Ethiopia is on its way to becoming the next outsourcing hotspot. At MMCY, we make outsourcing as simple as possible. All it takes is 3 steps and 3 weeks. First, we work with you to figure out exactly what you’re looking for and what your business needs are. Then, we will present you with great candidates and then lastly, you will be able to interview them yourself to find the best one.

To learn more about how we can build your dream team, book a call or contact us.

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