An increase of 41% since the pandemic
SpareMyTime, a UK Virtual Business Assistant firm, has seen an impressive surge in growth, registering a remarkable 325% increase since the onset of the pandemic in 2020. In the current year alone, they have reported a substantial 47% boost in revenue. The data, drawn from sources like Deloitte, IBISWorld, and YouGov, highlights an intriguing trend in the business landscape.
As of September 2023, SpareMyTime’s analysis suggests that global spending on outsourcing is poised to reach a staggering £571 billion by year-end. Astonishingly, nearly half (48%) of UK companies are now embracing outsourcing, marking a rapid 41% expansion since 2019. This contrasts significantly with the situation in 2020 when only a third of UK businesses considered outsourcing a viable option for the present and future.
SpareMyTime’s findings indicate that UK businesses allocated a whopping £500 billion to outsourcing in 2022. This trend spans across various sectors, with IT outsourcing witnessing a substantial 22% increase since 2019. Likewise, Business Process Outsourcing is projected to experience substantial investment, with an expected spending of £212 billion in 2023, reflecting a significant 19% rise from 2019.
In light of the ongoing inflationary pressures, SpareMyTime predicts that outsourcing will become commonplace for businesses seeking to mitigate rising costs, particularly in recruitment and other operational areas. Melissa Gauge, the Founder of SpareMyTime, elaborates on this phenomenon: “Inflationary pressures are prompting UK businesses to view outsourcing as a strategic response to managing escalating costs while maintaining competitiveness. When inflation drives up operational expenses, businesses often grapple with the challenge of balancing costs, quality, and productivity. Through outsourcing, businesses can gain the flexibility needed to navigate changing economic conditions without financial constraints.”
Intriguingly, data from YouGov indicates that over 70% of B2B decision-makers acknowledge their companies have outsourced certain aspects of their operations. Notably, IT support (34%) stands out as the most common function outsourced to external suppliers. Smaller businesses appear to be more inclined to enlist external support for financial management, with 37% of small businesses opting for this route compared to 12% of larger enterprises.
IBISWorld reports that the UK has witnessed the growth of 155,564 Business Process Outsourcing Services, with an average annual growth rate of 2.5% over the last five years (2018 – 2023). However, SpareMyTime’s data reveals that the most substantial growth occurred over the past three years, with a remarkable 7.7% increase in services since the pandemic began.
Business Process Outsourcing (BPO) encompasses two primary domains: back-office and front-office operations. Back-office BPO involves outsourcing essential business support functions such as accounting, payment processing, IT services, human resources, regulatory compliance, and quality assurance. In contrast, front-office BPO predominantly covers customer-centric services like technical support, sales, and marketing.
The surge in outsourcing, according to SpareMyTime, can be largely attributed to the proliferation of startups that require crucial Business Process support, particularly in areas such as IT and bookkeeping. Between March 2021 and March 2022, the UK witnessed the formation of 753,168 new startups, marking the second-highest annual startup registration rate, surpassed only by the 810,316 startups established during the peak of the pandemic (2020-21).
Notably, virtual assistants now spend a significant portion of their time on tasks such as diary management (22.62%), expense support (14.86%), and inbox management (11.4%). Less common tasks, like business development research (1.13%), have also seen an uptick in client requests for specialized support.
Melissa Gauge, Founder of SpareMyTime, comments on this trend, stating, “As businesses embark on the journey of scaling up, their needs inevitably evolve, necessitating increased capacity in various areas. The transition isn’t solely driven by unfamiliarity with processes; 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. Our fortunate advantage lies in our ability to effortlessly attract top-tier professionals, thanks to our scale and the opportunities we offer.”
In conclusion, SpareMyTime’s comprehensive analysis of the global outsourcing market sheds light on the growing significance of outsourcing in the contemporary business landscape. Melissa Gauge outlines six compelling reasons why outsourcing is emerging as a preferable solution in 2023:
- Lower Risk: Outsourcing to specialized agencies simplifies the complex task of finding the perfect fit during recruitment, mitigating risks associated with mismatches.
- Cost Efficiency: Outsourcing circumvents the substantial costs often associated with recruitment processes.
- Flexibility: Outsourcing allows businesses to adapt their resource allocation as needs evolve, critical in rapidly scaling businesses.
- Consistency: Outsourcing supports steady growth by freeing up focus on core areas like customer service.
- Best Practices: Outsourcing provides access to real-world best practices from professionals immersed in diverse business landscapes.
- Enhanced Capacity: Outsourcing relieves businesses of the burden of managing critical components like compliance and data processing, ensuring expert management of essential tasks.
For a detailed exploration of SpareMyTime’s analysis of the global outsourcing market, visit their website at sparemytime.com
