According to the Quarterly Outsourcing Index released by arvato together with NelsonHall, outsourcing deals in the UK are 65 percent higher during the first quarter of 2014 compared to the first quarter of last year. It is estimated that the total value of the deals in this year’s first quarter could reach £2.1 billion.
The report noted that public sector contracts, which grew 168 percent year-on-year and have a total value of £1.5 billion, propelled the growth. But for the private sector, contracts declined 20 percent year-on-year to £600 million.
Of the 39 contracts signed during the first quarter of 2014, 75 percent were onshore deals, and over 50 percent were new outsourcing deals.
Meanwhile, Debra Maxwell, Managing Director of arvato UK, said the outsourcing industry remains on the positive side because of the balance between the increase in total spend and first-time outsourcing partnerships. Moreover, organizations have been observed to use it to achieve and improve business goals.
The executive added that it is more evident in the public sector where outsourcing is crucial not only in reducing costs, but protecting the frontline services as well. Also, she said it is an advantage that there are now more onshore deals because it shows that the outsourcing industry is contributing to the economy of the UK and its position as a major player in the global outsourcing industry.
Seventy-one per cent of deals and £1.3 billion of spend are accounted for by HR, payroll, benefits administration, and recruitment business process outsourcing. On the other hand, IT outsourcing accounted for 29 per cent (£798 million).