Onshore Outsourcing Increasing

According to PeoplePerHour.com’s survey of 50,000 UK based businesses, 60% said that they are outsourcing more than they did two years ago, however 61% said that they are outsourcing to local rather than overseas providers.

Many of the companies surveyed attributed the change to the impact the recession has had on their businesses, however this appears strange considering that UK based suppliers are normally far more expensive than their offshore competitors. One theory is that many skilled professionals were either made redundant or were unable to secure a contract during the recession. This led many to set up their own businesses and deliver services to UK based clients at lower margins. 2009 and the early part of 2010 saw a record number of company formations in the UK which may back up the theory, however this may be partially due to contractors risking being caught the wrong side of IR35 in order to keep valuable pounds out of HMRC hands.

Xenios Thrasyvoulou, PeoplePerHour.com’s founder said “You might have expected offshoring to grow through the recession as UK businesses looked to cut costs by outsourcing IT requirements to cheaper overseas suppliers. However, it is clear that outsourcing is growing and offshoring is falling”.

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