A third of UK companies plan to increase investment in tech, a third plan to outsource IT abroad

Since the start of the pandemic, UK businesses have been adapting to the new working environment and adopting one or more new technologies. Covid-19 has been a challenge for UK businesses and new tech investments has meant that they have been able to overcome many of the hurdles of the pandemic, with staff working away from their business hubs. Some of the tech investments made weren't always the right ones and a third of businesses has already scrapped some of the changes they made. And news this week, that a third of UK businesses plan to outsource their IT abroad rather than have staff working from home, with 59% of manufacturing and 46% of financial services planning to increase outsourcing. In a report by Tony Blair Institute Global Change has warned that up to six million jobs could be at risk in the UK due to outsourcing. A third of businesses also lost time and money on unsuccessfully trying to adapt to new digitisation projects.

With the increase in need to adapt to new digital platforms, many key decision makers have admitted that their organisations are not geared up to the challenge, as their businesses lack the skills to do so, while others have admitted that they have struggled to keep up with the pace of technology developments. Frustrations included the way their businesses had handled IT projects during the pandemic, with some decisions being made at a moments notice, due to the panic of getting their business infrastructure working again during the initial stages of the pandemic. Now things are finally settling down, two thirds of businesses plan to launch new IT projects over the next year.

Upgrading a business's technology is an important thought process and at the start of the pandemic when staff had to work from home, many organisations had no back-up plan in place to keep staff working securely from their homes. Many were logging on with no firewall or security system in place to keep company information secure and also there was the added threat of cyber-attacks on insecure networks. With time to now think properly about the way ahead, key decision makers are now looking at the right tools to properly invest in technology for their business networks. There has been some huge challenges over the last year and finally with a much more positive business environment ahead, companies can strategically invest in the right tech for their businesses and adopt new digital tools.

Up until the pandemic, many businesses were slow to embrace any new technology suggesting they were too risk-averse to any significant change. Now, since the pandemic, attitudes have changed and there are now less barriers within an organisation to change and adopting new technologies to introduce new ways of working, focus on innovation and improve productivity.

With the delay in "Freedom Day" from June 21st to July 19th, and now a suggestion from the government that it will continue to encourage UK workers to 'work from home', this leaves many organisations with a dilemma. If staff are to be encouraged to work from home, then wouldn't be cheaper to outsource the work done by their 'absent' staff to a cheaper employee working abroad, but in essence, doing the same job, but for far less money?

Reducing costs is seen as the main reason for outsourcing. Also the apparent threat to six million white collar workers currently employed, whose jobs could go to those working abroad if the 'working from home' regime were to continue. The government has suggested that working from home should be considered a legal right 'post-Covid'. Therefore, if workers didn't want to work in the office or company headquarters for part of the working week, they couldn't be made to do so. But if workers were allowed to 'work from home' most of the time, this would have a huge impact on town and city centre revenues, with the knock-on effect of less people going into these centres to spend money.

The pandemic had been a key driver in companies keen on outsourcing, and that is now a key benefit to many organisations wanting to stay profitable and keep costs down by changing they way they work, bring in new innovative work practises therefore improving productivity and efficiency. The pandemic has accelerated the pace of digital transformation and the need for businesses to embrace new tech through investment, but maybe at the cost of local jobs.

It's far too early to tell whether the UK government is serious to suggest that 'working from home' should be a legal right. If so, many businesses will indeed look to employing remote 'cheaper' workers from abroad, rather than employing UK based staff that cost more. At the end of the day it's efficiency, productivity and profits that will be the main decision maker as to whether an organisation remains loyal to its own staff by employing them or go the route of outsourcing.