Outsourcing and economic crisis: The situation among service firms

Abstract

This paper seeks to analyse the application of outsourcing within Icelandic service companies in the wake of the banking collapse. Findings are based on comparing surveys conducted in early 2009 and in the summer of 2013. The main conclusion is that outsourcing did not increase, and similar tasks are outsourced in both surveys. Also, more firms gave cost?reduction as a reason for outsourcing in 2013, although strategic reasons were mentioned more often in both surveys. More respondents in 2013 expressed a positive experience of outsourcing. It is uncommon for companies to outsource human resources or lay off staff. Larger firms tend to outsource more in general than smaller firms, and they tend to do so for more cost reduction and strategic reasons compared to smaller firms. The former outsource more peripheral and information technology tasks, while smaller firms tend to outsource more tasks of administrative nature.