UK Businesses Outsourcing Lead to Increased Productivity

This week the i-FM has reported that an increase in outsourcing of 1% adds £2bn in productivity gains to UK economy.

The study produced by research and forecasting specialist Oxford Economics has shown that using more outsourced business services delivers greater productivity. When a business outsources it means they can focus on delivering their core activities more efficiently. The researchers found for every percentage point that outsourcing grew between 1995 and 2013, GDP growth increased 0.37% per year faster than it would have otherwise and productivity increased faster by 0.12%.

You would assume that this outsourcing and productivity growth would result in a loss of jobs. However in the professional services sector employment is growing 2.8% per year, despite being one of the greatest users of outsourcing, according to the BSA.

Melanie Maxwell Scott, Director of Policy at the BSA, commented: “The notion that businesses or governments should try to do everything themselves is as misguided as it is old-fashioned. Bringing in experts simply makes sense.”

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