When a lot of people think of outsourcing, it’s usually in a negative way. They imagine that it means jobs going abroad in the name of cutting costs and increasing profits for fat-cat multinationals while providing a lower quality of service for the public.
In fact, the truth is very different. While some UK companies may outsource abroad, for a variety of reasons, outsourcing actually provides a major boost to the UK economy. In 2015, 10% of the UK workforce had jobs in outsourcing. This accounted for 3.3m jobs, and the figure is now considerably higher. Additionally, as the UK’s outsourcing sector grows, so does its contribution to the economy in terms of GDP and gains in productivity.
The rise of outsourcing has certainly been a game changer, but its impact has largely been positive. Outsourcing has enabled UK businesses to adapt to the demands of a modern global economy. It has provided jobs and training as the UK has moved from a manufacturing-based economy to being one largely made up of service providers. It has also levelled the playing field, enabling small businesses and start-ups to compete with established players while focusing on their core strengths.
Changing business models
UK businesses are second only to those in the US in embracing outsourcing. British companies tend to be more flexible and agile than their competitors in Europe, and so were able to move faster when ways to cut operating costs and provide a more efficient service became apparent. These major changes in how business was done would require sometimes difficult negotiations with trade unions and suppliers, but they were still much easier to implement than they would be in a more over regulated economy, where business structures are more resistant to change and adapt to new realities more slowly.
Reasons for outsourcing
While reducing operating costs will always be a consideration for any business, outsourcing should be about finding a provider that will do the best job, not just the cheapest. In order to compete in a global economy, it is sometimes necessary for firms to shift certain departments abroad where the work can be done at a lower cost. However, often it’s about finding contractors with the expert skill sets needed to fulfil a role effectively, whether those contractors are local or based overseas.
Let the experts handle it
Outsourcing allows a business to focus on its core functions and so provide a better quality of service to its customers and clients. If a job needs doing and your company does not have the skills or resources to do it well, then it makes sense to pay an expert to do it for you. This extends not only to highly skilled but supplemental roles within the workforce, but also to basic issues such as storage, where expert solutions are often more affordable and locally available.
Growth of technology
One of the key drivers in the rise of the outsourcing sector is the increasing importance of technology in all areas of business, and the rate at which technology is continually improving and changing. It’s extremely difficult for any business to keep pace with the latest technological developments, especially if they are not directly related to their core functions. IT is one of the largest and fastest-growing areas of outsourcing, with skilled programmers, designers and cyber security experts in great demand.
In today’s business world, there’s a huge amount of pressure to get things done quickly and to a high standard. Being able to outsource where needed allows smaller businesses to compete in this environment. The presence of outsourcing firms gives these smaller companies access to resources and skills that they might not otherwise have.
Businesses shouldn’t be expected to do everything in-house, and those that try will end up over-stretching their resources and doing a shoddy job. Outsourcing allows every firm to ensure that every aspect of its business is undertaken to the highest level of quality.
Skills and training
Finally, what about the outsourcing companies in question? For these businesses, their employees are their greatest asset, and so they constantly invest in making sure that they receive constant training and development. There is a constant need to upskill and stay ahead of new trends and technology in order to keep providing a competitive service. A highly skilled workforce is also a well-paid workforce that contributes to the overall economy and wellbeing of the nation.
The UK business landscape is very different thanks to outsourcing, but it is ultimately a healthier and more efficient one. Outsourcing allows for greater flexibility and adaptability, and is the only way to stay competitive in a modern, high-tech world.