26 Outsourcing Statistics in the UK for a More Successful 2021

Easy access to talent, lower cost, getting ahead of the competition by investing less — these are just some of the benefits of outsourcing. But is this trend all it’s cracked up to be? Or do the drawbacks outweigh the advantages? Why are a third of companies in Britain planning to outsource more in the future?

Take a look at the latest outsourcing statistics in the UK to find out.

Ten Outsourcing Facts to Help Grow Your Business

General Outsourcing Statistics in the UK

1. 30% of UK businesses plan to outsource more by 2022.

(PA Consulting Group)

A third of UK businesses plan to outsource more in the future, the latest outsourcing data indicates. On the other hand, only 15% of companies plan to outsource less in the next two years. 

The number of enterprises intending to increase outsourcing has dropped by 2% from 2019. On the other hand, the percentage of businesses that want to outsource less has remained almost unchanged since 2019.

2. How many companies outsource in the UK?

(YouGov)

According to data from YouGov, seven in ten companies in the UK outsource services to third parties. By contrast, 25% of UK businesses have never used outsourcing in any area of their organisation. 

3. 17% of businesses in London have never outsourced. 

(YouGov)

The rate of outsourcing services in the country’s capital is higher than the rest of the country as polls show that only 17% of London companies have never outsourced to third parties. London businesses are most likely to outsource IT functions thanks to the city’s advanced technological ecosystem and higher demand for such services. 

4. The value of business process outsourcing agreements amounted to £2.7 billion in 2018.

(Statista)

Despite a slight dip in 2017, the value of business process outsourcing agreements has remained steady for four years. Outsourcing statistics in the UK show that in 2018 alone, £2.7 billion was spent on BPO deals, up from £1.8 billion in 2017 and £2.65 billion in 2016. 

5. The global value of BPO agreements in the IT sector was estimated at £68 billion. 

(KPMG)

From the total value of outsourcing deals, 5.2% originated from the UK. Conversely, the majority, or 84.2%, of bundled deals in the IT sector came from the USA. Other prominent markets coming up as key players in outsourcing include Spain and Australia. 

6. 62% of companies that outsource software development services turn to Eastern European countries. 

(ITProPortal) (Bdaily)

UK businesses seem to prefer to outsource in Eastern Europe primarily due to the geographical proximity and time distance, as well as cultural affinity. Countries like Poland, Bulgaria, and Romania are just some of the favourite outsourcing destinations for British companies, however, Ukraine is listed as the most financially attractive. 

7. 78% of South African BPO work is done for British companies. 

(Aboutmatch)

Outsourcing data and trends point to South Africa as a well-established hub for outsourcing, demonstrating an annual growth of 20% throughout the last seven years in the contact centre BPO sector. Today the majority of South African BPO work is carried out for companies based in the UK. 

8. Brexit might increase outsourcing in the IT sector.

(Emerging Europe)

Estimates put the demand for skilled IT workers at 180,000 in the UK alone. As demand grows, so will salaries of UK-based IT specialists, forcing British companies to outsource these services to other countries. Since the UK can no longer resort to immigration from the EU, these businesses might turn to non-EU countries to meet their outsourcing needs. 

Outsourcing Industry Statistics

9. Financial services and manufacturing companies will outsource the most.

(PA Consulting Group) 

50% of businesses in the financial services and manufacturing industry plan to outsource more, making this the sector most likely to contract third parties for services. The public sector, however, doesn’t come anywhere near these companies in terms of outsourcing. Only 22% of enterprises in the public sector plan to outsource more, while one in five want to outsource less. 

10. IT support is the most frequently outsourced function.

(YouGov) (Bdaily)

Although there are many outsourced jobs in call centres, positions in IT are still some of the most commonly outsourced jobs in the UK. More specifically, 34% of businesses in the UK want to outsource IT support to third parties, while 21% plan on finding coders and software developers from outside their own company.

Another survey by Clockers involving over 3000 start-up firms in the UK revealed that 56% of enterprises hired foreign software engineers for SaaS program development and API integrations.

11. 64% of UK accountancy firms are expected to outsource core services.

(Accountancy Age)

A study by Accountancy Age has shown that 64% of accountancy companies plan to outsource key services in the future. 

The study also revealed that accountancy firms have divided opinions over outsourcing. While 67% believe that contracting third parties will offer quality and services their company cannot provide, 72% think outsourcing accountancy services can lead to a bad reputation for the firm.

12. 61% of UK businesses outsource their payroll, outsourcing jobs statistics indicate. 

(Expert Market)

Outsourcing payroll is secure, cost-effective, and it eliminates the chance of payroll scams. These are just a few of the reasons why 61% of UK businesses let other companies handle their payroll management services. 

13. Almost half of the UK businesses outsource their marketing.

(Onrec)

Research by digital agency MarketingSignals has revealed that 42% of UK businesses are outsourcing their marketing. 

Research by digital agency MarketingSignals has revealed that 42% of UK businesses are outsourcing their marketing. 

The most commonly outsourced subsector from this department is digital marketing — 63% of the companies interviewed do not handle digital marketing in-house. Other outsourced marketing categories include social media marketing, email marketing and PR, which are handed over to third-parties by 59%, 44% and 36% of businesses, respectively.

14. Many British businesses outsource HR services. 

(YouGov)

When it comes to HR outsourcing, statistics and surveys show that 14% of UK companies have outsourced recruitment services to other companies. What’s more, 12% of the businesses surveyed stated that they had outsourced employee benefits, while 9% have allowed Human Resources (excluding benefits and recruitment) to be handled by third-parties instead of in-house. 

Outsourcing Business Statistics

15. Accounting is the most-commonly outsourced sector by small companies. 

(Premierline)

Almost 40% of small businesses in the UK outsource accounting services to other companies. This is also the sector that small companies are the least likely to manage in-house. By contrast, large companies are most likely to hand over IT services to other companies, including IT support and development work.

16. Small businesses rarely outsource customer support services. 

(Premierline)

A survey by YouGov discovered that less than 5% of small businesses in the UK contract third-parties for customer support services. The same is true for 5% of medium-sized companies and 17% of large UK companies. Companies’ reluctance to outsource customer services may be due to the emphasis businesses of all sizes place on this sector. 

Revenue Outsourcing Statistics

17. In 2018, the IT outsourcing market revenue was at $22.5 billion (£16 billion).

(Statista) 

This doesn’t come as a surprise, knowing that there are a lot of major IT companies that outsource in the UK. That said, the outsourcing market for IT in Britain is expected to increase to around $24.6 billion (over £17 billion) by 2021.

18. In 2021, BPO revenue is expected to reach over $22 million.

(Statista)

Revenue in the Business Process Outsourcing sector is continuously on the rise. Projected to increase at an annual growth rate of 6.2%, the market volume is expected to reach $28 million (over £20 million) over the next four years.

19. Application outsourcing is forecasted to reach over $9.6 million (almost £7 million) by 2025.

(Statista)

According to outsourcing statistics in the UK, the revenue of application outsourcing in 2021 will go over $7.8 million (£5.6 million). However, with a CAGR of 5.3%, the app outsourcing market value could reach as high as $9.606.2 million by 2025.

Reasons for Outsourcing

20. Why do UK companies outsource?

(PA Consulting Group) 

71% of UK businesses say cost reduction is the main reason for outsourcing. 50%, on the other hand, cite business transformation, whereas for half of the companies surveyed the quality of the service provided is the key driver. 

21. A survey by YouGov suggests companies outsource because they do not have skilled staff. 

(YouGov)

A 2019 poll by YouGov shows that 48% of UK companies outsource certain services because they do not have the staff to do so in-house. On the other hand, 30% let third-parties handle service in order to get better results. 

22. Companies outsourcing marketing services also say lack of expertise drives their outsourcing strategies.

(Onrec)

37% of UK businesses that do not handle marketing in-house say that they outsource because they can’t find qualified staff for the job. Outsourcing facts and figures further show that 32% prefer outsourcing because of the level of expertise and skills external marketers provide. Cost also enters the equation as 22% state that contracting third-parties is cheaper in the long run.

23. IT companies outsource because it’s cheaper.

(YouGov)

30% of IT companies in the UK say they outsource to cut costs, while 28% say outsourcing is more efficient than handling these services within the same company. 

24. Reduced costs are the main reason why the UK call centres outsource to South Africa.

(PrimoDialler)

There is a big difference between paying for contact centres services in the UK and other countries. That said, UK contact centres can save up to £11,766.02 per agent if they outsource these services to countries like South Africa, where the annual salary of a call centre agent is £5607.98. Considering that companies would pay £17,374 for the same service in the UK, it becomes clear why the number of jobs outsourced to South Africa is on the rise. 

Outsourcing and the COVID-19 Pandemic

25. 28% of UK companies plan to outsource at least one business due to the COVID-19 pandemic.

(Information Age)

Because of the coronavirus pandemic, 28% of UK businesses plan to outsource one or more sectors, most likely IT and marketing. The main reason why companies might be keener on outsourcing in the post-pandemic period is cost. Experts think that as businesses try to recover from the coronavirus recession, they will attempt to cut costs wherever and whenever possible. 

26. 32% of respondents say there will be less outsourcing after the pandemic.

(Deloitte)

A Deloitte survey on outsourcing statistics in the UK amid the coronavirus pandemic indicates that only 22% of respondents believe outsourcing will increase after the pandemic. A bigger proportion, i.e. 32% think that there will be less outsourcing as contract clauses in the post-coronavirus period become more inflexible.

Conclusion

Are you planning to outsource any sector of your organisation? If so, take these outsourcing statistics from the UK into consideration. Carry out a careful cost-benefit analysis before deciding on contracting third-parties and above all, make sure that the company you choose has the skills and expertise to get the job done quickly and efficiently.