Ubiquity, a global leader in business outsourcing, suggests that the increase in Employer National Insurance (ENI) announced by Rachel Reeves in the budget may prompt companies to explore savings through Business Process Outsourcing (BPO).
The Chancellor has raised Employers’ contributions to National Insurance from 13.8% to 15%, effective April 2025. Additionally, the threshold for employers to start paying National Insurance has been lowered from £9,100 to £5,000.
Financial commentator Georgie Frost of Times Money Mentor notes, “Economists have indicated that raising employer NI acts as a tax on jobs, potentially leading to lower wages, reduced hiring, and fewer work hours offered by companies.” This change is expected to motivate employers of all sizes to seek cost efficiencies in managing Employer National Insurance.
“Ubiquity has successfully helped companies navigate similar regulatory changes in other markets by utilizing BPO solutions to reduce fixed headcount costs while maintaining flexibility and service quality,” says Matthew Agronin, Chief Marketing & Growth Officer at Ubiquity.
Data from Ubiquity indicates that outsourcing key processes and services can lead to cost savings of up to 60% compared to in-house employment.
The introduction of ENI at a lower threshold alongside the higher percentage, compounded by rising minimum wage costs and current union pressures, is likely to drive businesses to reassess the benefits and savings associated with outsourcing essential functions.
Agronin adds, “Based on Ubiquity’s experience, the significant likelihood of redundancies due to increased costs will encourage companies to explore their options. The outsourcing sector has matured, offering a credible alternative to dedicated in-house teams while providing cost and quality benefits.”
“Ubiquity urges both medium-sized businesses and large corporations to consider their options. The ‘Outsourcing Cost-Savings Estimator’ provided by Ubiquity serves as a practical tool for assessing potential savings to offset the increased expenses of in-house teams,” he continues.
