Egypt’s Outsourcing Companies Redraw Geographic Map: A Strategic Shift Towards Governorates
In light of escalating competition within Egypt’s outsourcing services market, major local and international companies are actively redrawing their geographic footprint.
They are increasingly expanding into the governorates, a strategic move reflecting a pivot towards leveraging untapped human potential outside Greater Cairo.
With the continuous rise in recruitment costs in the capital and declining job stability rates, regional areas have emerged as a smart solution, offering qualified talent, higher operational stability, and lower costs.
This new trend is not arbitrary; it is underscored by industry data and statements from officials at leading outsourcing companies operating in Egypt.
They highlight the high quality of skills available in the governorates, particularly in language and technology, and the presence of a less crowded and competitive work environment.
Notably, some governorates, such as Beni Suef and Assiut, are securing prominent positions in future expansion plans due to their distinct advantages, which ultimately enhances Egypt’s competitive edge as a regional hub for IT and outsourcing service exports.
Competition for Talent Drives Regional Expansion
An official at a global outsourcing company operating in Egypt – who preferred to remain anonymous – revealed that this move to expand outside Cairo and Alexandria is a direct result of intensified competition for talent in the capital, coupled with companies’ recognition of exceptional talent availability in several governorates.
He pointed out that many Egyptian cities are now rich with graduates possessing rare language skills, such as German and French, in addition to high proficiency in English.
These elements have become a major priority for cross-border service providers that rely on delivering technical support and customer service to foreign markets.
He explained that cities on the Red Sea coast, like Hurghada, are distinguished by an abundance of young, German-speaking talent due to their continuous interaction with the tourism sector.
This has made them attractive destinations for establishing specialized service centers for German-speaking clients.
In Upper Egypt, he noted that Assiut Governorate has emerged in recent years as a promising hub for technological skills, thanks to its universities and specialized institutes, and the high rates of technical education among youth.
This provides a suitable human resource base for technical support and software development services.
He concluded that companies’ expansion into the governorates reflects a strategic shift aimed at creating a more balanced operational environment, reducing costs, and maximizing the utilization of human resources distributed outside major cities, thereby strengthening Egypt’s competitive capacity as a regional outsourcing hub.
Shedid: Rising Labor Costs Drive Outsourcing Companies to Governorates
For his part, Eng. Mohamed Shedid, Executive Director of the Eitesal Association, confirmed that outsourcing companies are increasingly moving towards the governorates.
This trend is driven by the rising cost of labor in the capital and the declining rates of job stability among its workforce.
He explained that the nature of the labor market in Cairo is characterized by constant employee movement between companies, which creates significant challenges for growth plans and talent retention.
Shedid pointed out that the governorates have become an attractive destination for outsourcing companies due to the greater job stability among workers and their desire to remain in their positions for longer periods.
He added that talent in the regions is no less competent than their counterparts in the capital, possessing distinct skills, especially in language and information technology, along with a continuous desire to develop their capabilities.
This serves as an additional attraction factor for companies seeking to expand and achieve operational efficiency.
Gerges: Lower Turnover Rates in Governorates are a Key Attraction
John Gerges, CEO of Aura Outsourcing Services, affirmed that the companies’ shift towards expanding into various governorates outside Greater Cairo is not arbitrary. Instead, it is a result of clear factors confirming these areas’ readiness to accommodate the sector’s activities.
He explained to “Taaheed” newsletter that the most important of these factors is the availability of distinguished human resources in the governorates, who possess experience and commitment, and are sometimes more stable and productive than the talent available in the capital.
Gerges added that the lower employee turnover rate (attrition) in the governorates compared to Cairo is a significant attraction, as it provides companies with greater operational stability and reduces costs associated with re-recruitment and training.
He noted that some governorates, like Beni Suef, have proven their ability to provide qualified talent thanks to a large number of universities and higher institutes, in addition to the stable nature of the population.
This positively reflects on employee retention rates and service quality.
He concluded by affirming that Aura adopts an operational strategy based on improving the work environment in the governorates and providing genuine growth opportunities for employees, with the aim of creating an integrated operational system that supports local development and serves the objectives of Egypt’s outsourcing sector.
This trend signifies a pivotal moment for Egypt’s outsourcing industry, promising more balanced growth and wider distribution of economic opportunities across the country.
