SJD Accountancy

Small businesses more likely to hire local contractors, finds new report

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A recent report by The Open University Business School, ACCA (Association of Chartered Certified Accountants) and Barclays Bank, has advised that contractors should look to their local SMEs (small and medium-sized businesses) when it comes to finding a contract.

The Quarterly Survey of Small Business in Britain found that 82% of small businesses that hire contractors are more likely to take on those who are based in the same area as them.

Of the SMEs surveyed, it seems that outsourcing is very much local, with 21% reporting that their contractors were in another part of the UK and only 5% had contractors based out of the country.

Dr Richard Blundel, the report editor, said of the findings, “SME owners and managers have some difficult and important choices to make around employment and outsourcing. Our research has examined some of the issues they are grappling with as they make these decisions.”

“For example, four factors seem to be especially important in deciding to keep activities in-house: the need to maintain managerial control over the activity; quality and reputation; organisational culture and staff commitment; and the need to protect proprietary knowledge.”

There’s a very complex mix of factors involved in these decisions and the case is likely to alter over time in response to changing circumstances. However, the scope for outsourcing of certain activities, including many ‘back office’ functions, is likely to increase in the future due to technological innovations such as cloud computing.”

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