Revealed: the figures behind the outsourcing boom

Global spending on outsourcing could hit $700 billion by the end of the year, with nearly half of UK companies now spreading their work this way.

This represents a huge acceleration since the pandemic, growing 41 per cent since 2019. Where, according to data from various analytical sources, only a third expected to do so.

The virtual assistant provider SpareMyTime analysed numbers available from Deloitte, IBISWorld and YouGov to predict growth from the £500 billion allocated by businesses in 2022. They found the trend spanned several sectors, with IT outsourcing increasing 22 per cent from 2019. Similarly, Business Process Outsourcing is expected to reach £212 billion in 2023, a 19 per cent rise from 2019.

And with inflation continuing to rise, the company predicts that outsourcing will become commonplace for businesses looking to reduce costs on recruitment and other areas. 

Melisssa Gauge

Melissa Gauge: firms face multiple challenges

Founder Melissa Gauge said: “Inflationary pressures can prompt UK businesses to consider outsourcing as a strategic response to manage rising costs and maintain competitiveness. When inflation drives up operational expenses, businesses often face the challenge of containing costs while sustaining quality and productivity.

The YouGov analysis revealed that over 70 per cent of B2B decision-makers had outsourced some part of their business, with IT support being the main reason, although smaller firms are much more likely to hire a supplier to keep on top of their finances, with 37 per cent doing so, compared to 12 per cent of large businesses.

According to IBISWorld, there are now 155,564 Business Process Outsourcing Services in the UK, growing 2.5 per cent per year on average over the past five years, with the last three seing the most growth, with a 7.7 per cent increase since the pandemic.

SpareMyTime say the growth can be largely attributed to a surge in start-ups who are most in need of Business Process support such as bookkeeping at back-office tasks. Between March 2021 and March 2022, there were 753,168 new start-ups founded in the UK, the second-highest number registered in one year and only topped by the 810,316 founded during the height of the pandemic.

Melissa Gauge added: “As businesses embark on the journey of scaling up, their needs inevitably shift, demanding increased capacity in different areas. The transition isn’t solely centred on unfamiliarity with processes; rather, it revolves around the quest for high-quality support. Attracting exceptional talent becomes a steep hill to climb during this phase and clients seek our assistance due to recruitment challenges.”


The detailed findings can be found here

The statistics: Business Process Outsourcing

The statistics: YouGov dataset