Businesses to boost back-office outsourcing by £3bn in 2025
More than half (57 %) of UK organisations plan to increase the level of business processes outsourced to third parties next year, according to a survey of business leaders conducted for Parseq, a managed service provider. Parseq estimates this extra activity could be worth up to £3bn in additional income for the UK outsourcing industry in 2025.
Parseq’s State of UK Back-Office Outsourcing analysis, which is published today, reveals that providers of accounting and finance services look set to gain the greatest amount of new business. Parseq’s study indicates that a fifth (21 %) of companies plan to start outsourcing aspects of these functions or increase the level of activity trusted to third parties in 2025.
Customer communications outsourcing, including contact centre and digital mailroom services, will also rise significantly in 2025. Parseq’s analysis suggests that 20 % of all companies will start or increase their use of third parties to deliver this function in 2025.
Parseq’s analysis draws on a survey of business leaders conducted by Censuswide in October 2024 and research published by the Department for Science, Innovation & Technology in February, which indicated that UK outsourcing companies generated combined revenues of £52.6 billion in 2022.
While around a quarter of businesses (23 %) are interested in outsourcing to reduce their costs, access to specialised skills (32 %) is the main driver for trusting back-office activities to partners.
Back-office outsourcing by business size, sector & region
- Outsourcing of processes increases with business size, from half (53 %) of micro-organisations with fewer than ten people to over 99 % of large businesses today. Growth in 2025 will come from companies of all sizes, including 56 % of micro, 80 % of small (10-49), 89 % of medium (50-249), and 99 % of large businesses.
- Outsourcing levels are highest in the public, technology and financial services sectors, where more than six in every ten businesses use partners for back-office processes, and almost 70 % of activity is trusted to third parties.
- Organisations in London and the East Midlands make the greatest use of outsourcing. Around six in ten businesses in these areas use partners to deliver 13 % of their back-office activities and 63 % of companies in both locations plan to start or increase outsourcing in 2025.
- The lowest levels of outsourcing are in the South West, where only 23 % of businesses use third parties, and just one % of back-office activity is outsourced today.
Craig Naylor-Smith, CEO at Parseq, comments: “Outsourcing is on the up, driven by talent and cost challenges, and growing recognition that businesses can realise efficiencies of scale and automation through partners that already have that expertise and a critical mass of people and technology.”
“Organisations are outsourcing back-office functions to access specialist skills, cut costs and focus on their core competencies. This is a long-term trend that wage inflation and increases in national insurance contributions will only accelerate.”
