Antoine Boquen, from consultancy New Horizons Global Partners, said that his firm has seen “major interest” in outsourcing among UK firms to Asia since the pandemic erupted in March. And while many are doing it to curb costs, others are employing foreign firms because of uncertainty over the UK’s future trading relationship with the EU after the Brexit transition period, he claimed.
Mr Boquen, a managing partner at the firm, said: “We are seeing major interest from UK firms in accessing overseas talent, and engaging a more cost-effective workforce based in Asia.
“Many different functions can be outsourced in this way such as IT, accounting and customer service.”
Mr Boquen said an increasingly popular solution is to use a global Professional Employer Organisation (PEO) which directly recruits, hires and manages overseas staff.
He added: “That way, UK firms can avoid the expensive and time-consuming process or setting up their own local entity or subsidiary in a new country.”
Pierre Pradier, the co-founder at New Horizons Global Partners, agreed with his colleague and said that the economic turbulence of the pandemic has only hastened this trend.
This is because the cost-cutting benefits are now available to smaller firms, while advances in technology have made it much easier to facilitate.
He added: “SMEs probably have the most to gain from outsourcing overseas in this economic climate.
“By outsourcing to an overseas location, they can place all their efforts on their core business.
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“Outsourcing through a global PEO makes the outsourcing process entirely scalable. As the business pays a per-worker fee, they can start with as few employees as necessary and then scale up the size of the operation as necessary.”
Outsourcing’s popularity had already been skyrocketing before the Covid-19 emerged from Wuhan in China this year.
In 2019, Deloitte estimated that worldwide spend on outsourcing reached £536bn – twice the level of previous years.
Mr Pradier also believes some firms could outsource simply for regulatory purposes ahead of the end of the Brexit transition period in January.
He said: “For example, a UK financial services firm may not be licensed to operate in an EU country, but may be able to instead outsource to a licensed firm in that country.
“We can expect to see continued interest in outsourcing from the United Kingdom to Asia.
“The trend to outsource is longstanding due to the clear economic benefits it can bring to individual firms. Outsourcing allows firms to play to their own competitive advantage, instead of trying to be a ‘jack of all trades’.”