Category: BPO

How has Brexit affected BPO companies in the UK & Europe?

By Matt Hyde, Managing Consultant, Mosaic Search & Selection Ltd

Brexit may have affected the UK and Europe, but less than many commentators assume. We discuss why in this post. 

When the Brexit result first came through in June 2016, many commentators worried that it would have a dire impact on UK BPO companies. Primary fears included: 

  • Transfer of BPO jobs to the continent, particularly commercial centres such as Frankfurt and Milan
  • Loss of international competitiveness due to exit from various international trade agreements
  • Reorientation of economic activity away from the UK to elsewhere in the world
  • Lack of labour migration to the UK to service the BPO industrY

The UK finally left the EU on 31 January, 2020, after many years of political wrangling. However, the warnings about the dire economic effects of Brexit never seemed to materialise. 

It is now two years since Brexit and the effects on the way BPO (business process outsourcing) operates have been relatively minor, both in the UK and on the continent. 

Brexit’s Effect On BPOs In The UK

Disentangling the effects of Brexit on UK BPO companies from the COVID-19 pandemic has been immensely challenging. This is particularly the case, since the UK’s exit from the EU occurred at the same time as China reported the new virus in Wuhan. 

The data reveal some effect of Brexit on the BPO industry before 2020, but turbulence was only brief. The combined ACV spending in the UK and Ireland on IT and business process outsourcing fell by 60 percent in 2018. However, it was up by 54 percent in 2019 to €1.4 billion, coming close to the peak ACV of €1.7 billion achieved in 2017. In 2020, consulting firm Businesswire lowered its growth estimate for the industry as a whole from 9.1 percent to 1.7 percent, but still showed growth, despite the pandemic.

There are several reasons why the UK’s leaving of the EU has not caused much impact on the BPO industry in the country. 

The first is that the UK is currently Europe’s second largest economy. Given demographic changes in Germany – the current number one – and high future growth prospects, it could soon become the continent’s leading economy. For this reason, domestic demand for BPOs is likely to remain high. 

The second has to do with the structure of the UK economy. Services in Britain concentrate in finance and banking, and these tend to be sectors that outsource more than other industries, again benefiting BPOs. 

A third reason for the lack of adverse impact is that the UK speaks English – the language of business – and that’s something that Brexit cannot change. The international business community is happy with taking risks and buying UK BPO services. They feel able to communicate and, as a group, trust UK PLC.

Brexit’s Effect On BPO Companies In Europe

Commentators had thought that Brexit would lead to a reorientation towards European BPOs, but that doesn’t seem to have happened either. 

Germany experienced the strongest BPO performance of any European country, seeing an annual average growth rate of more than 43 percent in 2017, achieving an AVC of €670 million in 2019. However, unlike the UK, Germany has a stiffer corporate culture and doesn’t benefit from the English-speaking advantage. As such, it has not been able to capitalise on any perceived weakness in the UK market. 

Nordic Countries have not fared well either, seeing modest declines in their BPO industries overall. The other large European economy, France, still has a very small BPO market compared to the UK – approximately €120 million as of the last available figures in 2019. 


The effects of Brexit on BPO companies seem to be limited. Brexit signalled Britain’s exit from a trade bloc, but it did not do a great deal to reduce its BPO market advantages. For that reason, Britain is likely to persist as a major BPO provider. 

Find out how Mosaic Search and Selection can help fill your leadership roles in a confidential and professional manner.  Contact Matt Hyde on +44 (0)1242 239147 or email: matthyde@mosaicss.com

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