BPO Briefings: Insights From a Transformative Year

Over the past year, the CCMA has brought together leaders from across the UK’s BPO and contact centre community for a series of in-depth briefings.

These sessions, supported by The Knowledge Group (tkg), have explored the realities of operating in an environment defined by rapid technological change, shifting client expectations and mounting cost pressures. From an in-person event in March to a virtual mid-year Outsourcing Summit, followed by a closing briefing attended by the Department for Business and Trade in October, the conversation has evolved into a clear picture of an industry that is rethinking what it means to deliver value.

A sector under strain but ready to adapt

The year began with a frank assessment of the challenges facing the UK BPO market. Rising employment costs, complex buyer expectations and ongoing competition from offshore locations have placed new pressure on providers. Many participants noted the difficulty of sustaining competitiveness against lower-cost markets, while also recognising that offshoring is not always a long-term answer. Quality, proximity and client trust remain vital differentiators for UK-based operations.

Talent retention has been a recurring concern. Leaders spoke of middle management migration, skills gaps and the shifting expectations of employees who are seeking roles with purpose and development potential. For those supporting public sector clients, the challenge is magnified by budget constraints and the need to deliver reliable outcomes within strict parameters. Yet across the year’s events, there was consensus that the UK industry still offers a compelling blend of experience, innovation and cultural alignment that can anchor its competitive edge.

From cost to capability

One of the clearest trends to emerge has been the shift from cost-based outsourcing to capability-led partnerships. Buyers, both public and private, increasingly expect their suppliers to bring strategic insight, not just labour capacity. This change has made it harder for providers to differentiate on price alone, but it has also opened space for genuine innovation.

Participants observed that buyers are more sophisticated than ever, expecting providers to help shape solutions rather than simply deliver them. Outcome-based pricing, shared-savings models and joint ventures are becoming more common, although they still require high levels of trust and transparency to succeed. As one discussion highlighted, some buyers remain locked in a “captive mindset,” treating providers as internal teams rather than strategic partners. Bridging that gap demands better communication, clearer measures of value and more proactive education on what modern outsourcing can deliver.

Technology as both disruptor and enabler

AI dominated the conversation throughout the year. Across the sessions, there was an acknowledgement that technology’s impact is accelerating but uneven. While AI and automation have already taken over transactional and low-value tasks, the consensus was that their greatest potential lies in augmenting human expertise, not replacing it.

In the final session, participants reflected on how this shift is changing the nature of frontline roles. As simple interactions are increasingly automated, BPOs are hiring more experienced frontline advisors who can handle complex, empathetic conversations. Some suppliers are investing heavily in learning and development to help staff understand and work alongside AI tools. Others are rethinking the very definition of entry-level work, positioning contact centre roles as skilled, career-building opportunities rather than transient jobs.

Still, apprehension remains. The speed of change, the rise of technology-first competitors and the increasing overlap between BPOs and tech providers have blurred traditional boundaries. The challenge for many organisations is how to balance investment in technology with the human capability and culture that have long underpinned service excellence.

Offshore competition and new delivery models

Offshore delivery remains a core feature of the BPO landscape, but the conversation has matured. Leaders acknowledged that the long-standing advantages of locations such as South Africa are narrowing, with rising costs and currency volatility reducing the gap with UK delivery. Some participants questioned whether constantly chasing the next low-cost region remains viable, suggesting instead that regional prosperity and skills development could offer more sustainable value.

Several contributors emphasised that the true competition is not necessarily offshore suppliers, but automation itself. As AI replaces many entry-level tasks, offshore models will need to evolve, focusing on complex work and high-value specialist functions. For others, multi-location and hybrid delivery models are emerging as the way forward, combining onshore quality with offshore scale and digital augmentation.

Procurement, pricing and partnership

Procurement practices were another recurring theme. Across all three briefings, there was a shared frustration with processes driven primarily by finance or generalist procurement teams. Many buyers still prioritise rate over output, resulting in short-termism and underused technology investments. Suppliers noted that procurement often fails to capture what end users actually need, creating tension between operational reality and contractual expectation.

At the same time, buyers are getting smarter. They are asking tougher questions about outcomes and demanding clearer demonstrations of value. For suppliers, this means refining propositions, building consultative capability and focusing on the basics of operational excellence. Participants agreed that those who combine strong fundamentals with transparent, data-led storytelling are best placed to succeed.

ESG, resilience, and the public agenda

Environmental, social, and governance priorities were discussed throughout the series, often framed as part of a wider conversation about sustainable business and regional development. For many, ESG has evolved beyond compliance into a lens for decision-making, including influencing where to invest, how to procure, and what kind of partnerships to pursue.

Cybersecurity and resilience also emerged as growing concerns. Some suggested that increasing transparency in procurement processes, including greater scrutiny of technology supply chains, could help organisations manage risk more effectively. Others noted that a shift back toward partial on-premise systems may occur in some sectors as data protection pressures rise.

The public sector continues to be a central client group for many UK BPO suppliers. Discussions highlighted both the scale of opportunity and the structural challenges of working with government. Questions remain around centralised versus localised contracting, and how to balance value for money with social and regional impact. Representatives from the Department for Business and Trade attended the final session, underlining the growing policy interest in how BPOs contribute to national capability and employment.

A sector in motion

By the close of the 2025 series, participants agreed that the UK BPO industry is undergoing fundamental change. The traditional model, built on labour cost arbitrage and volume, is giving way to one defined by capability, technology integration and trust-based collaboration.

While competition is intense and margins remain tight, there is renewed optimism about the sector’s potential. The UK retains a strong foundation of customer experience expertise, operational excellence, and adaptability. Those who invest in people, technology, and partnership will be well positioned to define the next chapter of the industry.

Looking ahead

As CCMA and tkg and prepare for the next BPO Briefing Series in 2026, the focus will remain on helping the industry navigate these transitions. The discussions in 2025 have reinforced the need for collaboration, transparency, and innovation, and for a collective voice that can engage government and buyers more effectively.

Next year is shaping up to be a fascinating one for the BPO sector, and the Briefing Series will continue to bring together leaders from across the sector to share insight, challenge assumptions and build a stronger, more resilient UK BPO community.