Health and beauty retailer Boots has signed a £400m deal to outsource its back-office operations – including the management of its temporary and contract recruitment.

The company has appointed Xchanging, a business processing services company, to manage travel expenditure, marketing, resourcing, facilities management and workplace services for the next seven years.

Xchanging will manage a procurement budget of around £58m on Boots’ behalf, including its relationship with the agencies that supply temporary labour.

The deal reflects a growing trend for procurement departments or outsourcing firms to handle recruitment contracts.

The deal will see Xchanging working closely with high-street agency Adecco, which already supplies temporary workers to Boots and also manages the retailer’s relationships with other temporary agencies.

A spokesperson for Adecco insisted there would be no overlap between Xchanging’s and Adecco’s relationships with Boots, and that Adecco would be working closely with the outsourcing provider.

Boots has been struggling to cut costs after pre-tax profits for the year fell by 11%.

Richard Baker, Boots’ chief executive, has already announced plans to reduce the firm’s headcount by 500.