UK businesses to expand outsourcing by $3.8Bn in 2025
ROTHERHAM, UNITED KINGDOM — The back-office outsourcing industry in the United Kingdom is poised for a significant boost in 2025, with an estimated £3 billion (US$3.8 billion) in additional revenue projected.
According to Parseq’s State of UK Back-Office Outsourcing report, 57% of organizations plan to increase their outsourcing activities next year.
Digital transformation drives outsourcing growth
The report noted that accounting and finance services will see the greatest growth, with 21% of businesses intending to start or expand outsourcing in this area.
Customer communications, including contact centers and digital mailroom services, are also expected to grow, with 20% of companies planning similar expansions.
Craig Naylor-Smith, CEO at Parseq, said, “Outsourcing is on the up, driven by talent and cost challenges, and [the] growing recognition that businesses can realize efficiencies of scale and automation through partners that already have that expertise and a critical mass of people and technology.”
Access to specialized skills is the primary driver for outsourcing, cited by 32% of surveyed business leaders. Cost reduction follows closely at 23%.
Rising wage inflation and national insurance contributions are expected to further accelerate this trend as businesses seek to focus on core competencies while delegating non-core functions.
Regional and sectoral outsourcing trends
Outsourcing adoption varies significantly by each region in the UK. London and the East Midlands lead the way, with 63% of businesses planning to increase outsourcing in 2025. By contrast, the South West lags behind, where only 23% of businesses currently outsource back-office functions.
Sectorally, financial services, public sector organizations, and technology firms are the most active adopters of outsourcing. Over 60% of businesses in these sectors already use third-party providers for back-office processes.
Outsourcing adoption rises with business size
The report also revealed that larger organizations are more likely to outsource. While only 56% of micro-businesses (fewer than ten employees) plan to increase outsourcing next year, this figure rises sharply to 99% among large enterprises (250+ employees).
Medium-sized businesses (50-249 employees) also show strong growth potential, with 89% planning expansions.
A long-term trend for efficiency gains
As businesses face ongoing challenges related to talent shortages and operational costs, outsourcing remains a strategic priority. Naylor-Smith added, “This is a long-term trend that wage inflation and national insurance increases will only accelerate.”
With £3 billion in additional revenue anticipated for the UK outsourcing industry in 2025, the sector is well-positioned for robust growth driven by innovation and efficiency demands.
