Third party administration

In the last decade it has become increasingly prevalent for businesses to transfer one or more of their functions to an external specialist service provider. Formal contracts define the details and the two parties work together in an ongoing business relationship. This kind of arrangement is often known as ‘outsourcing’.

As the trend grows, businesses have not only ‘outsourced’ but ‘offshored’ certain business functions to another country. Overseas call centres for UK customers are a well-known and somewhat controversial example of this. Furthermore ‘multi-sourcing’ (outsourcing to more than one service provider) and ‘multi-shoring’ (outsourcing to more than one country/culture) are also becoming widespread.

So far ‘outsourcing’ has been principally the domain of larger businesses that have sufficient resources to invest time in researching options, choosing providers and then managing the relationship. It remains to be seen if ‘outsourcing’ becomes an option that can appeal to smaller and medium-sized businesses.

What skills does the subsector need?

The third party administration and outsourcing subsector suffers from high levels of attrition and a lack of knowledge of best practices, particularly among small to medium sized financial services employers (SMEs). The skills needs for the subsector are recognised as:

■communication and interpersonal skills
■relationship management
■business administration
■customer service
■having an eye for detail