Umbrella companies look likely to increase in popularity as outsourcing grows in 2011, according to one expert.

Zain Wadee, director at Recruitment Process Outsourcing said that recruitment firms are likely to see further growth in 2011 as businesses attempt to cut expenditure while continuing to employ a high standard of staff.

Mr Wadee also said that companies would be looking to increase innovation in technology from attraction, sourcing and on-boarding perspectives.

"We expect convergence of models for contingent worker and permanent hiring to ensure total transparency of the hiring landscape," he added.

This comes after a PwC study found that organisations with flexible supplies of labour will have new opportunities in the future and that partnerships between government and private sector manpower providers may be put in place.

In addition, the research revealed that public sector organisations will attempt to decrease their non-core and fixed cost undertakings by utilising private and voluntary sector companies to deliver manpower services.