A new report by Kimon Services, a leading global provider of outsourcing and business process solutions, has revealed that recent UK government policies are driving a significant surge in offshoring entry-level roles, as small and medium-sized businesses grapple with escalating employment costs.
The study highlights the impact of rising Employer National Insurance contributions, combined with stricter compliance measures and growing wage obligations, which are pushing many UK firms to explore more cost-effective workforce strategies.
Findings show that 62% of surveyed businesses are now considering outsourcing entry-level administrative functions overseas as a key survival strategy to protect margins and remain competitive in a challenging market.
“Businesses across the UK are constantly telling us the same story: the rising cost of employing staff is eroding margins and threatening viability,” said Michael Kitt, CEO of Kimon Services. “Outsourcing is no longer just a cost-saving measure; it’s become a lifeline. Kimon helps companies navigate this shift responsibly, ensuring they can focus on growth while we deliver skilled, reliable, and most importantly, cost-effective teams to support their operations.”
The research also reveals that 24% of respondents plan to outsource administrative and customer service roles abroad within the next year, while 16% have already started outsourcing parts of their operations following the recent Employer NI increase.
Large-scale examples are already emerging, with Nationwide Building Society announcing plans to transfer 1,000 back-office and customer support roles to India, including HR, data processing, and call-centre operations. Meanwhile, Asda has outsourced over 100 IT positions to India, signalling a wider move towards operational efficiencies.
Kimon itself has reported a 40% year-on-year rise in UK businesses seeking outsourcing solutions for roles in customer support, financial administration, and back-office processing.
The study warns that unless government policy addresses escalating employment costs, the shift towards offshore outsourcing will accelerate, reshaping the future of entry-level employment and challenging traditional expectations of domestic hiring.
