A survey of 2200 small businesses in the UK for Freelancer.co.uk reveals that the rate of outsourcing to the developing world by UK small businesses grew by 35% this year.
Most jobs were outsourced to India, Pakistan and the Phillippines, but China saw a large growth with an increase in 20% of small businesses outsourcing to this country. The survey found that they expect to hire more freelancers overseas in 2015, with 43% saying they will outsource more work abroad.
The survey revealed that small businesses outsourced for two reasons: to have work done that they couldn’t do themselves, such as complex programming and IT, and to outsource work for a cheaper price in order to boost their margins and be able to take on more work. Of those that outsourced 48% said they outsourced to boost their capacity, so they didn’t have to turn away work.
Freelancer.co.uk that released the survey saw its own profits from UK businesses outsourcing abroad through the site increase by 43% last year.
The survey also found that 52% said that outsourcing work to consultants and freelancers has been central to their capacity to grow over the past 12 months.
The survey found that 42% of small business owners were increasingly having to outsource to programmers and web developers to compete with technological innovations and the increase in online trading and e-commerce.
“Small businesses in the UK are looking to outsource overseas to cut costs but also to increase their own capacity. Rather than turning away contracts for work, they are taking it on and outsourcing it for less abroad to boost profits,” said Bill Little, European Director of Freelancer.co.uk.
“A majority of small businesses in 2014 realized that rather ignore work that they can’t do themselves, they can outsource it. They are getting in expertise that they may not have otherwise been available to them to hire. And when resources are in short supply, they have realized that they only pay for services as they need them,” he said.
“But small business are also outsourcing more because the growth in outsourcing sites gives them confidence and protection. With freelancers reviewed for quality of their services and escrow payment systems ensuring security, small businesses are now able to manage a diverse workforce with reliable and easy to use project management systems,” he said.