Outsourcing: from cost cutting to strategic capability

The way we work is changing fast. AI, cloud technology and automation are now part of everyday business life. Add to that the long-term impact of the pandemic, the normalisation of remote working, and ongoing changes to employment rights, and it’s clear that organisations need a better understanding of what the workplace will look like beyond 2026.

Last summer, we commissioned new research from Norwich Business School at the University of East Anglia on the future of the workplace, in particular the role of the traditional employee versus outsourcing.

Summary of the findings:

Outsourcing is no longer just about cutting costs

The research explored the growing shift away from traditional employment models towards outsourced and fractional operational support. While outsourcing was once seen mainly as a way to reduce costs, it’s now increasingly viewed as a strategic tool, one that helps organisations stay agile, scale quickly, and access specialist expertise without over‑stretching internal teams.

This mirrors what we’re seeing on the ground. Businesses of all sizes are blending permanent employees with contracted specialists, particularly in roles such as executive assistants, operations managers and project support. It’s not about replacing employees, it’s about building the right mix.

A growing market without job losses

One of the most striking findings was that the UK’s business process outsourcing market is growing strongly, projected to exceed GBP 16 billion by 2030. At the same time, employment levels remain stable.

This reinforces an important point: outsourcing is complementing traditional employment, not replacing it.

Sectors such as finance, IT and healthcare are leading the way, using outsourcing to improve service delivery, manage compliance and respond more quickly to change without compromising workforce stability.

The rise of the outsourcing manager

Another key theme is the growing importance of the outsourcing manager. More large organisations are now appointing someone specifically to manage external partners and contractors, a clear signal that blended workforce models are here to stay.

This role plays a crucial part in:

Coordinating external suppliers
Monitoring performance and quality
Managing risk and compliance
Ensuring outsourced services align with wider business goals

What this means for membership organisations

The research highlights opportunities for membership organisations. For growing organisations, hiring full-time roles isn’t always the right answer. Accessing experienced secretariat and Board support on a flexible basis can provide breathing space, specialist insight and operational resilience without long-term overheads.

Key recommendations from the research include:

Embracing hybrid workforce models
Investing in strong supplier relationships
Using digital tools to support collaboration

Looking ahead

The findings confirm what we’ve long believed: the future of work isn’t about choosing between employees or outsourcing; it’s about using both intelligently.

Outsourcing is no longer a bolt on; it’s part of a broader resourcing strategy that blends permanent hires, trusted partners, flexible expertise and AI. It sits alongside traditional recruitment prioritising flexibility, resilience and long-term effectiveness.