The UK jobs market continues to burst with good news as we enter 2016. More than half a million new jobs were created in 2015, with 200,000 of those created in the last three months. On top of this, the rate of unemployment has dropped to just over 5%, and experts predict that it will hover around the 5% mark for some time to come. Three sectors were primarily responsible for the creation of new jobs: construction, the hotel and restaurant industry and business services. As shown in the short video that accompanies this post, business services accounted for around half of all extra jobs generated in the past year. Business services is seeing rapid growth for a number of reasons, with companies such as professional services consultancy firm Procorre experiencing increased demand as we enter a new age of business. Procorre and other business services companies, both in the UK and across the world, have seen this growth evolve rapidly since the late seventies due to three particular trends, which are discussed below.
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1. Outsourcing
The trend for outsourcing began in the 1980s and has since continued to expand. Outsourcing is the practice of reducing business costs by transferring certain portions of work or sectors of business to outside suppliers rather than employing people internally. By outsourcing specific tasks to external companies, a business can save on the cost of employing a full-time, in-house staff. Examples of areas that are often outsourced include IT, accounting, property management, security and a wide range of back-office functions. By outsourcing non-core activities, businesses can shift their primary focus onto their core activities, thus streamlining practices and increasing efficiency and productivity. Companies tend to see a reduction of costs of around 15% when outsourcing various non-core activities.
2. Technology and the Internet
The advent of the internet forever changed the way we do business, and companies today need to manage their websites as well as keep track of large amounts of data. Many businesses, especially small to medium enterprises, simply did not or do not have the skills and resources to manage their websites and databases effectively, which created the increased need for business services professionals. For instance, companies might bring in business services experts to set up and manage their websites, to install and monitor software for digital transactions or to assist in creating and maintaining a strong online presence.
3. Overseas Market Growth
Influenced in part by the internet and in part by increased affordability of travel, the business services sector has also seen huge growth in overseas markets. In 2015 alone, more than £60 billion of foreign earnings in the UK came from the export of business services. Today, the value of exported business services from the UK exceeds the value of exported manufactured goods. These services are delivered by people using technology, with the knock-on effect of a higher demand for other business sectors – such as more airport capacity and faster, more reliable broadband connections.
In the post to follow, more information will be provided about the other industries creating thousands of new jobs in the UK.
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