According to a survey conducted by Parseq for a managed services provider, more than half of UK organizations plan to increase their level of outsourcing business processes to third parties in the next year. Parseq estimates that this additional activity could generate up to PS3billion in extra income for the UK outsource industry by 2025.
Parseq’s analysis shows that accounting and financial services providers are likely to see the most growth. Parseq’s study shows that 21 per cent of companies are planning to outsource these functions in 2025 or to increase their level of trust with third parties.
In 2025, the outsourcing of customer communications, such as contact centres and digital mailrooms, will also increase significantly. Parseq’s analysis indicates that 20% of companies will begin or increase the use of third-party providers to perform this function by 2025.
Parseq’s analysis is based on a Censuswide survey of business leaders in October 2024, and research by the Department for Science, Innovation & Technology published in February, indicating that UK outsourcing companies had combined revenues of PS52.6billion in 2022.
Around a quarter (23%) of businesses are interested in outsourcing their back-office functions to reduce costs. However, the availability of specialized skills (32%), is what drives them to trust partners with these activities.
Outsourcing of back-office functions by sector, size and region
- The percentage of businesses that outsource processes is increasing with the size of their business. In 2010, 53% of micro-organisations (less than 10 people) and over 99% of large companies were outsourcing. In 2025, growth will be driven by companies of all sizes. This includes 56 percent of micro businesses, 80 percent of small (10-49), and 89 percent of medium (50-249).
- The highest levels of outsourcing are in the technology, financial and public sectors. More than six out of ten companies use third-party partners to handle back-office tasks, and more than 70 percent of all activity is delegated.
- Outsourcing is most common in London and East Midlands. Six out of ten companies in these regions use partners to perform 13 percent of their back office activities. 63 percent of the businesses in both areas plan to increase or start outsourcing by 2025.
- In the South West only 23% of businesses outsource their back-office activities.
“Outsourcing has risen, driven by talent challenges and rising costs, as well as a growing awareness that businesses can achieve efficiencies through automation and partners who already have the expertise, a critical mass people, and technology,” said Craig Naylor Smith, CEO of Parseq. “Organisations outsource back-office functions in order to gain access to specialist skills, reduce costs and concentrate on their core competencies. It is a trend that will continue to grow.
The original post Business to increase back-office outsourcing in 2025 by PS3bn appeared first on Human Resources News.
