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Written by Marijn Overvest | Reviewed by Sjoerd Goedhart | Fact Checked by Ruud Emonds | Our editorial policy

 Outsourcing Statistics 2024 — 50 Key Figures

Key take-aways

  • IT outsourcing to reach $519 billion, reflecting a 22% increase.

  • Focus on IT, cloud tech, and automation as industry standards.

  • Industry expands globally; talent acquisition and retention pose challenges.

Outsourcing statistics show us how outsourcing in today’s world is doing in every business. However, what are these figures?

In this article, we will talk about the situation of outsourcing in 2023. We will check the figures that will allow you to see the growth of outsourcing nowadays.

After you finish this article, you will know the latest outsourcing statistics that will allow you to know the growth of outsourcing in 2023. Additionally, it will enable you to decide if it is time for your company to also use outsourcing.

Defining Outsourcing

Before we show the factors affecting outsourcing and the latest outsourcing statistics nowadays, we will give a brief description first of what outsourcing is.

Outsourcing is the process of looking for an external party supplier. The external party supplier is hired to take on some activities of the management. Usually, it is linked to a lack of critical scale, investments for in-house experts, or the need to buy something quickly in the market.

The underlying principle of why companies choose to outsource is that third-party providers focus on the particular tasks assigned by the company which they are able to do cheaper, faster, and better than the hiring company could.

50 Statistical Outsourcing Figures of 2024 That You Should Know

The following are the latest reports regarding outsourcing:

1. According to Time Doctor, the IT outsourcing spending will be $519 billion in 2023, a 22% increase over 2019’s numbers.

2. According to ISG, IT services make up almost 72% of all outsourcing contract values globally.

3. According to Deloitte, global spending on outsourcing could hit $731 billion in 2023.

4. Projected until the end of 2023, expenditures on IT outsourcing are anticipated to surpass $1.3 trillion, driven by companies’ growing demand for expertise in digital transformation.

5. According to data from Statista, there will be a steep incline in revenue generated from IT outsourcing from 2023 to 2027.

6. The three most crucial areas within IT outsourcing are administration/support outsourcing, application (development and maintenance) outsourcing, and web hosting. Together, these three segments collectively contribute to over half of the market value in the IT outsourcing industry.

7. Business process outsourcing (i.e. a BPO company) is another core outsourcing service that’s due to continue in popularity going into 2023.

8. In 2023, there’s a strong chance that attention to outsourcing services will be turned toward locating talents who can do jobs that few others can.

9. The trend for traditional outsourcing services in 2023 will likely decrease as technology continues to advance.

10. The productive hour pricing bids from BPOs in the US will continue to increase in 2023.

11. Nearshore and offshore growth will continue due to wage inflation and rising cost in the US.

12. In 2023, most nearshore markets will remain relatively unsaturated and capable of delivering high performance and scale.

13. 2023 will be one of the biggest years on record for organizations that are looking to improve lives through outsourcing.

14. According to Everest Group, the impact sourcing market currently has 350,000 workers worldwide, with Africa employing 17% and Asia-Pacific at 58%.

15. Outsourcing will play a crucial role in helping organizations to improve efficiencies and contain costs throughout 2023.

16. Cost pressures on offshore and nearshore BPOs will continue throughout 2023.

17. The outsourcing industry will continuously rise in 2023, earning huge profits and market value.

18. The demand for cross-platform app development has increased in 2022 and will continue to rise until the third quarter of 2023.

19. According to a report by Commit, the greatest concern over outsourcing talent is the quality of work.

20. According to Gartner, almost 60% of finance and accounting outsourcing contracts will not be renewed by 2025.

21. In 2023, there is a growing trendline toward in-center staffing in some offshore and nearshore sectors.

22. According to Matchboard, 9% of the Philippines’ GDP comes from outsourcing.

23. OutsourceAccelerator states that businesses that opt to outsource to the Philippines can potentially reduce their labor costs by as much as 70%.

24. The outsourcing services industry in China is worth over $175 billion according to Statista.

25. According to the same report, over one million new employees join the outsourcing services industry in China every year.

26. In the same report, Japan’s BPO market is expected to reach $35 billion by 2025.

27. Almost 70% of British companies outsource their key business operations, a report by YouGov.

28. In the same report, over 34% of Business-to-Business (B2B) organizations in the United Kingdom outsource their IT support.

29. A report by Clutch found out that 37% of small businesses outsource at least one of their business processes.

30. As per Clutch, small businesses most commonly outsource their accounting and IT services, indicating that these processes are highly popular among them for outsourcing.

31. A report by Kearny states that India is one of the best countries where many businesses outsource their business activities. Thus, cutting a lot of their labor costs.

32. The Inter-American Development Bank (IDB) anticipates that after 2023, nearshore outsourcing will contribute an additional $78 billion to the export industries in the Caribbean and Latin America.

33. Technavio predicts that the worldwide virtual assistant market is set to expand by $4.12 billion, with a compounded annual growth rate (CAGR) of 11.79% expected between 2021 and 2025.

34. The adoption of cloud technology enables almost 90% of businesses to explore greater outsourcing possibilities by facilitating access to a broader pool of remote professionals.

35. MBO Partners reports that more than 50 million Americans engage in various forms of freelance work.

36. According to Statista, smaller organizations are more inclined to outsource their payroll services when compared to larger organizations.

37. Syntax reports that a significant 83% of IT leaders are contemplating outsourcing of their security efforts.

38. Ukraine has the fastest-growing population of IT professionals in Central and Eastern Europe. According to IT outsourcing statistics, the country is home to over 200,000 such workers, making it a potentially significant market for the IT outsourcing industry in the future.

39. Projections indicate that over the next five years, approximately 1 million jobs in countries such as the United States, Poland, India, and the Philippines could be at risk of being replaced by automation.

40. A substantial 71% of Americans perceive outsourcing as having a negative impact, with 62% expressing a desire for the government to enact a complete ban on it.

41. According to the most recent report from Grand View Research, the global Business Process Outsourcing (BPO) market was valued at $262 billion in 2022. It is anticipated to experience a robust compound annual growth rate (CAGR) of 9.4%, reaching a value of over $525 billion by the year 2030.

42. As per a report by Research and Markets, the COVID-19 pandemic has spurred the expansion of call centers on a global scale. This segment, valued at more than $461 billion in 2022, is projected to reach $742 billion by 2030. This growth represents a compound annual growth rate (CAGR) of 6.1%.

43. According to Verdict, almost 85% of Apple’s suppliers have their manufacturing facilities located in Asia.

44. Aptude reports that approximately 300,000 jobs are outsourced by the United States on an annual basis.

45. According to Insider Monkey, IBM holds the title of being the largest outsourcing company globally.

46. According to Deloitte’s outsourcing statistics, cost reduction is the primary motivation for outsourcing, with 70% of businesses citing it as their top reason.

47. According to Orient, a significant percentage, ranging from 70% to 80%, of finished manufactured products are outsourced. This outsourcing is often driven by the goal of reducing labor costs.

48. The global app development outsourcing market is expected to increase in value, going from USD 122.67 trillion in 2023 to approximately USD 145.73 trillion by 2027.

49. The pharmaceutical industry is following the global trend towards outsourcing. In 2014, the outsourced market share stood at 33.7%, and it is anticipated to increase significantly to 49.3% by 2023, according to Statista.

50. There will be huge demand from new and established outsourcing buyers which will continue to remain strong until the end of 2023.

Automation and OmnichannelAre The Standard

Automation and omnichannel are rapidly becoming outsourcing mainstays in 2022. New technology like robotic process automation (RPA), machine learning, artificial intelligence (AI), and big data analysis has advanced to the point that they have become essential differentiators for outsourcing looking to gain a competitive advantage.

Both automation and omnichannel have been trending for a while now. This is due to the events that have transpired in the last few years which have accelerated the widespread adoption of these technologies that are becoming the standard in the years to come.

A recent study has found that 93% of organizations are considering or have already adopted cloud services to enhance outsourcing. Additionally, 83% of financial organizations are considering or implementing robotic process automation.

The advancement in automation and omnichannel have been big. However, the pandemic has provided a great trial run for customers. Many customers have become more used to things like chatbots and automated online interactions than ever before.

Additionally, the need for automation has grown alongside the shortage of talented people in outsourcing. As the competition for outsourcing continues to rise, many organizations have adopted automation in omnichannel technology to cope with the lack of outsourcing talents.

Finding Outsourcing Talents

Finding and keeping outsourcing talents are more difficult than ever before for the outsourcing and BPO industry in 2021. Health concerns, economic pressures, quarantine measures, and remote work all contributed to the historic labor shortages. Furthermore, this trend will continue up until this year but not just because of COVID-19.

Workers across many industries have reevaluated their relationships at work. Workers are now demanding wage benefits, and better benefits, and choosing to leave the industry if they do not feel they are treated well enough.

Outsourcers are not just competing against other local outsourcing providers for talent. They are also competing with other organizations that offer remote work, as well as other industries that can meet the needs of potential talents. This year, only those companies that can adjust to the market’s demands will win the war for top outsourcing talent.

The Expansion of OutsourcingAcross The Globe

The COVID-19 pandemic has accelerated the idea of working remotely and technological advancements which is one of the reasons why the outsourcing industry expands in 2022.

However, the difference is that the year’s prediction of growth in the outsourcing industry would most likely happen away from the usual outsourcing hubs which are India and the Philippines.

Due to digital transformation, the growing popularity of remote work for outsourcing has the opportunity to flourish in 2023.

The growing outsourcing destinations like Egypt and Ireland will be able to continue their growth in 2023 along with new player countries that are yet to establish themselves.

Conclusion

In conclusion, the outsourcing landscape in 2023 showcases robust growth, notably in IT services and technological adoption. The industry is witnessing a transformative shift with automation, cloud technology, and virtual assistants becoming integral.

Despite global expansion, talent acquisition challenges persist, accentuated by the demand for better benefits and remote work options. The COVID-19 pandemic has accelerated the rise of remote work, prompting emerging outsourcing hubs like Egypt and Ireland.

As businesses adapt to these changes, the outsourcing sector faces a pivotal moment, balancing innovation with talent retention to navigate the evolving demands of the market.

Frequentlyasked questions

What are Outsourcing statistics?

Outsourcing statistics show the growth of outsourcing in 2022.

What is Outsourcing?

Outsourcing is the process or approach of looking for an external party where you can delegate some of the processes in your company.

What country has the most outsourced jobs?

India has the most outsourced jobs due to its large population and favorable cost of living. Thus, it is one of the favorite outsourcing locations in Asia for 2023.

About the author

My name is Marijn Overvest, I’m the founder of Procurement Tactics. I have a deep passion for procurement, and I’ve upskilled over 200 procurement teams from all over the world. When I’m not working, I love running and cycling.

Marijn Overvest Procurement Tactics