Why is services tailspend increasing?
Business spend on services has consistently increased in recent years.
Several market factors are further fuelling this increase...
1.
Awareness
Much like the rapid rise of contractor recruitment in the 80s-2000s, services is growing as an increasing route to ‘get things done, fast’ by operational staff, often as a workaround to traditional, more controlled routes to resource and services, like contract and permanent recruitment.
2.
Market capability
Supplier capability is ever evolving, allowing the market to cover increasingly diverse and specialised services. This offering is increasing choice and ability to utilise services over resource provision.
3.
Compliance
Legislative risks like IR35 has driven a reduction in Limited Company Contractor engagement, pushing workers into PAYE models or driving buyers to obtain skills through outsourced services and consultancy agreements instead.
4.
Contracting trends
Providers have increasingly moved from the traditional 'time and materials' approach to take on greater risk & deliverables for higher fees. Alongside this, the trend towards short-term 'gig' working is accelerating, disrupting traditional contracting & supply models and blurring the space between temporary workers and outsourced services.
