A misunderstanding of what outsourcing is has led to the public misconception that outsourcing does not help the British economy, a survey commissioned by the National Outsourcing Association (NOA).
The NOA commissioned a survey into public attitudes and was shocked by the findings. Public attitudes are in contrast to a Business Services Association (BSA) survey last year that showed that outsourcing contributed eight percent of the UK’s GDP, £14 billion in business taxes and £21 billion outsourcers’ income tax, the NOA said.
The ‘Public Perception of Outsourcing’ research revealed that just 19 percent of the public think that outsourcing can help get the UK out of recession, and respondents mainly associated outsourcing with cost-cutting (65 percent), job losses (53 percent) and India (45 percent).
However, the NOA believes that the mainly negative connotations of outsourcing are due to a fundamental misunderstanding of the strategy.
For instance, customers cited a bank opening a call centre in India (58 percent) or a sports brand opening a factory in China to manufacture trainers (47 percent) as examples of outsourcing.
“In fact, neither of the above are examples of outsourcing – both strategies are actually captive offshore projects, with no outsourcing involved,” said the NOA.
Instead, just 27 percent recognised that ‘a local computer company providing IT support to small businesses’ was an example of outsourcing.
Martyn Hart, chairman of the NOA, said: “The NOA is confident that we can prove to the public the value that outsourcing brings to businesses and the nation as a whole.
“Outsourcing is not just about offshoring and job losses, although the public currently thinks that it is. Most of the IT industry is outsourcing in one way or another. This is not being recognised currently. The research shows that although the public is adamant that they don’t like outsourcing, for the most part, they do not properly understand what it is.”
Market researchers Populous surveyed 2,053 UK citizens for the survey.
Retail group Shop Direct Group, owner of brands including Littlewoods, recently announced a £430 million deal to outsource its customer contact services to Serco, in an effort to cut costs and improve efficiencies. The deal involves the closure of call centres, and some offshored work.