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Business Services/Outsourcing: +10 percent job growth in 2021?


By Elias van Herwaarden, Head of Location Strategy, Colliers Occupier Services EMEA

More than 12% average annual headcount growth across EMEA for the Business Services Sector (BSS – comprising shared services, global business services, BPO and ITO) - at least that is what it was during the 10 years leading-up to the Covid outbreak in 2020. And through the last twelve months, even as they halved their year-on-year headcount growth expectations, most Business Services Center (BSC) leaders and analysts alike have maintained a positive outlook.

Some, however, stated early on that the BSS would emerge stronger from the crisis. And why not, after the sector resiliently weathered both the 2003 SARS-1 and the 2007-2008 financial crises? When Covid lockdowns started many back and middle offices successfully switched to remote work within, at most, a few weeks if not within days. They also took on additional tasks from the front-line operations of the businesses they serve. Tasks that are now unlikely to move back in full.

The latest industry expert projections put post-Covid BSS headcount growth levels back in the 10-15% bracket. But more than a few challenges need to be tackled for such a V-shaped recovery to occur. Here are a few of my insights into the challenges to consider:

  1. Achieving acceleration. Many companies will demand more from their BSS organisations. Centre leads will need to move quickly to cope with demand. Implementing automation will need to move faster than before. This hinges on the ability of BSC leaders’ to source skilled talent as much as it does on them convincing the frontline business to standardise and harmonise process inputs.


  2. Designing new ways of working. If numerous BSCs used the lift-and-shift principle to transition-in work from frontline businesses, most of them only applied the “lift” when it came to transitioning staff to remote working. The ensuing challenges have been manifold: diminishing workforce engagement; staff exhaustion as it struggles to maintain historic productivity whilst working remotely; reduced focus on innovation and continuous process improvement. BSC management principles have relied on small teams and highly interactive spans of command. These may prove ill-suited to permanently delivering on a remote basis.


  3. Redefining the role of a work place. Countless 2020 surveys show that many people are happy to work more from remote locations. Yet the polls also reveal that many (if not most) people missed aspects of the workplace. Particularly when it came to the office’s role as social meeting hub. Of course, BSS offices already had their chill areas pre-Covid but, moving forwards, what if the core function of the office would be as a platform to “glue” people together around a common culture?


  4. Amending location strategy. Corporate appetite to locate BSCs in Tier-3 and Tier-4 cities has clearly increased over the last twelve months. This is with a view to increasing resilience, capturing wage cost arbitrage and tapping hitherto less-saturated talent pools. But few companies have the time or resources to develop a robust multi-location strategy. They run the risk of making hasty decisions. Or of simply copying the choices that other companies have made. Since every company and every location project is different, a “following-the-herd” approach will rarely succeed.


Let’s not be under any illusions, 2021 will see the leading, enterprising BSCs successfully tackling these challenges, paving the way for others to follow suit. Those leading BSCs – and the companies they serve – will benefit from a first-mover advantage. The laggards might drag BSS employment growth however, making a K-shaped recovery for the sector ever more possible.

Yet one thing is clear: the Covid-pandemic put BSCs and outsourcing in the top-right of corporate planning boards. With the right approaches, a +10% year-on-year job growth for the sector may prove much more real than the wishful thinking of some, post-Covid.


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United Kingdom

Elias van Herwaarden

Head of Location Strategy

London - West End

Elias is Head of Location Strategy, Occupier Services - EMEA..

He has advised over 650 companies on where to locate new operations and where to consolidate existing ones.

In doing so he brings to bear a deep understanding of business operations, and of how to tune them to local operating conditions.

Having conducted field work in 47 countries and over 250 cities globally, he applies this expertise across all business functions: headquarters, manufacturing, R&D, warehousing and distribution, and shared services.

Elias expertise ranges from location strategy through tactics to project implementation. He developed robust data-models but holds that experience is key to deliver recommendations that work.

He regularly speaks and publishes on location strategy, emerging markets, business resilience and corporate deployment trends.

Elias teaches International Business Strategy at one of Europe’s top-10 universities, sits on the board of various international business associations and is member of the Site Selectors Guild.


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