Simplifying to succeed: The BOSS and why outsourcing will outlive wage inflation

In summary

• Rising costs are helping drive a shift to outsourcing functions like payroll and tax, but other factors are equally important
• They include skills gaps, the need for continuity and increasing complexity from regulatory change
• Outsourcing offers a solution to these challenges, but also allows organisations to concentrate on their core competencies that drive value

You don’t always get what you pay for. Despite rising wages in finance in recent years, skills gaps persist across many organisations, helping fuel interest in outsourcing. Our latest Business Owners Sentiment Survey (The BOSS) shows strong interest in farming out internal functions.

In total, our survey of owners running businesses with at least £5 million revenue found more than six in ten seeking to outsource functions. About one in six (16%) planned to do so within a year. Moreover, one in five already said they were already outsourcing internal functions. 

In part, that’s likely to be driven by rising wages. Finance is a good example.  Accounting jobs site GAAPweb’s 2025 Salary Survey found significant rises in average salaries, with senior roles such as chief finance officers, particularly, reporting substantial hikes. Others suggest a more mixed picture, but few doubt that some experts are commanding high salaries.

“Salaries for executive finance roles have become more fluid, with six-figure packages increasingly common in a post-pandemic world, even outside of the capital,” as recruitment consultant Reed’s 2025 salary guide notes.

That’s long been a driver for outsourcing. In many cases, for a proportion of the salary cost of a qualified individual that a business needs, businesses can get a full finance team from an outsourced provider. 

While costs can make a compelling case for outsourcing, it’s far from the only driver. Just as often, the issue is not cost, but availability. Widespread reports of skills shortages persist in areas like finance. Research commissioned by the Association of Accounting Technicians earlier this year found 34% of employers struggled to recruit these positions. The BOSS, more generally, found labour and skills shortages just as much of an issue as rising staff costs among British business owners. 

The findings also show widespread concern for staffing issues going forward. Significant numbers of business owners fear both skills shortages generally and the loss of critical employees specifically over the coming year. 

For these reasons, interest in outsourcing is likely to persist even if salary pressures ease. In fact, it’s more likely, if anything, to grow – a prediction based on three other, related issues: Continuity, complexity and value. 

The first of these, continuity, is closely related to challenges around skills gaps and critical personnel dependencies. Outsourcing effectively eliminates these risks by giving businesses uninterrupted access to experts with the finance, accountancy or other skills they need. It relieves them of the challenges of recruitment, retention and succession for these professionals – as well as more mundane issues around arranging cover for holidays, illness or other absences. 
All these challenges are offloaded onto the outsourced service provider.

The second key issue is the growing complexity across areas like accountancy, payroll and company secretarial services. This ensures skills gaps remain an issue and increases the attractions of on-demand expertise. In-house teams face a continual struggle to keep up with changing regulations and requirements impacting these business functions.

Currently, for instance, finance functions are contending with significant upheaval from changes to FRS 102, the financial reporting standard, and its simplified alternative FRS 102 1A. Elsewhere, they contend with the move to mandatory payrolling of benefits in kind adding complexity there, while additional identity verification requirements add to company secretarial duties.  

Managing these functions in-house, organisations must keep their people and systems up to date with continually changing rules, regulations, rates and allowances. Relying on an outsourced provider, they can benefit from its economies of scale, specialist expertise and industry-wide experience – and better control associated costs, reducing the related uncertainty. 

Finally, outsourcing can offer these benefits because the functions in question are crucial to an organisation’s smooth running but are not among its core competencies. The central benefit outsourcing brings is that it allows a business’s key staff and management to focus on their areas of expertise and the things that drive value for the organisation.

Facing rising costs, an uncertain economy, and changing regulations, risks and taxes, organisations must focus on their key challenges: enhancing efficiency, improving performance, boosting sales and breaking into new markets.

In this context, outsourcing can eliminate the challenges of managing internal functions that distract from pursuing these strategic goals. In a challenging time, it means organisations can focus on what matters – or at least on those areas where they’re best placed to make a difference. For some, it may not just be the key to success but survival.