By the end of 2025, the combined revenue of the largest outsourcing firms had grown by 10–14%. However, when adjusted for official inflation at 9.5% and an average price increase of roughly 10% per year in the sector, organic market growth was close to zero. So, what actually happened last year, and what can we expect in 2026?
What 2025 revealed: How has demand for outsourcing changed?
In 2025, demand for outsourced accounting functions – including payroll, HR administration, and bookkeeping – continued to decline. The number of inbound inquiries from potential clients in this industry dropped by 26% compared to the previous year. This is already the second consecutive decline of this kind after 2024, when the drop was also 26%. At the same time, the conversion rate of leads into deals remained stable, meaning the sales department is working efficiently; it is simply that the number of interested clients has decreased.
It is also important to remember that outsourcing is a low-margin business, where the main expense item is the wage fund. Specialists’ salaries rose by 15–20% in 2025. When revenue grows by 10–14% while the wage fund grows by 15–20%, it can’t be considered real growth.
This stagnation is also evident in comments from colleagues at other outsourcing companies. Some explicitly state there was no growth, while others report only minimal figures.
We met our budget, but only through the implementation of HR portals, digital personnel document management systems (CEDO), and accounting systems. In 2025, the share of process automation projects reached 63% of the actual quota achieved for new sales, whereas pure outsourcing accounted for only 37%.
Why companies shifted in-house and when they will return
The main reason for the decline in demand is a large-scale transition of accounting functions back in-house. Decisions to do this were made starting in 2022 and were implemented between 2023 and 2025. The logic seemed simple: to cut costs on support functions, moving away from an external contractor would save money.
Moreover, outsourcing began to be perceived once again as a loss of control and flexibility – a sentiment we have encountered before. This is despite global practice showing that outsourcing primarily reduces operational risks and ensures process predictability.
An additional factor was business consolidation. Mergers and acquisitions have led major players to prefer setting up their own shared service centers (SSCs) and scaling them across new assets rather than turning to external providers.
Here is what’s important: this is not something new. The outsourcing market goes through such cycles regularly. We saw it reach a similar “rock bottom” in 2017–2018. Back then, everyone was also talking about a crisis, declining demand, and the impossibility of growth. Then the market recovered – and quite quickly. In 2026, the cycle appears to be coming to an end.
However, two conditions are necessary for full market growth: companies exiting strict cost-cutting mode and a return to understanding the advantages that outsourcing provides.
Outsourcer + implementer: A new model for businesses
Portfolio diversification has become a necessity. Outsourcing companies are actively developing their implementation and automation divisions. This is happening at least because client companies lack the budgets to transfer entire functions to an external contractor but do have budgets for automating individual processes.
For the client, this changes the operating model. When implementation and service are handled by a single team that already knows the people and processes, the risks associated with launching new solutions – from payroll calculation to system implementation – become lower. If a company lacks the in-house expertise, such projects are more often closed through trusted partners.
Competition among outsourcers who also offer implementation will intensify, and within a few years, the mere ability to implement systems and provide payroll and HR services will cease to be a competitive advantage. However, companies that started earlier retain a head start – thanks to their accumulated case studies, established teams, and refined methodologies.
Artificial intelligence: Hype or reality?
What is today referred to as AI implementation is, in practice, more often process automation and robotization: document recognition, automated checks, and integrations between systems. These areas are actively developing, but calling them AI is a misnomer.
Throughout 2025, we did not receive a single client request for implementing AI solutions. Even in tenders held by large companies, this issue was not raised. There may be several reasons for this.
First, outsourcing accounting functions involves working with personal data, where information security requirements are extremely tough. Implementing AI under such conditions requires a legislative framework, which does not yet exist.
Second, the level of digital maturity varies greatly. In many companies, employees still resist transitioning to digital personnel document management (CEDO) and electronic work records. How can AI even be considered in such an environment?
Today, the main impact comes from automation: it reduces routine operations, lowers the number of errors, and speeds up data processing. As for AI in accounting functions, for now, it remains more hype than practical application.
Outlook for 2026: Cautious optimism
We do not expect significant growth in 2026. The overall economic conditions continue to exert pressure, so the market will likely remain at 2025 levels.
However, it seems we are approaching the bottom and may begin a gradual recovery. For instance, January 2026 already shows a more active flow of inquiries, particularly for system implementations.
Those who have used the past few years to develop new competencies and can now offer comprehensive solutions – outsourcing, implementation, and support from a single source – will come out ahead.
By Yekaterina Menshikova, Sales Director, UCMS Group outsourcing company