At the height of modern technology, more and more businesses are considering the benefits of outsourcing services to optimize their operations. With this, the outsourcing industry is expected to grow non-stop. 2022 was a visibly fruitful year for the global BPO sector, garnering a total revenue of USD 329.9 billion, and is projected to expand tremendously for the coming years.
We’ve been in the business for a long time, and we’ve witnessed all different outsourcing trends come and leave unbelievable influence to both modern and traditional outsourcing practices. This list aims to update you with figures and predictions that will define the current status of the outsourcing industry.
If you’re a business owner, an executive, or involved in managing operations within a company, it’s important to stay up-to-date with industry trends. In this article, we will provide you with a list of the most significant outsourcing statistics to have impacted outsourcing providers. We will also share with you the latest industry trends that have helped this multifaceted sector earn billions in 2023. Keep reading to stay informed.
The global outsourcing market growth and trends over the years.
Just like any industry, the business process outsourcing market is subject to changes brought by new technologies, growing customer demands, and diverse preferences. To be able to adapt to these inevitable changes, the global market should be updated with the trends. Here are some of the trends that shaped the outsourcing industry in 2024.
A quick rise in remote work.
The pandemic has an enormous effect on the employment sector. Since most companies were required to operate with a skeletal workforce, a lot of people lost their jobs. The remote and hybrid employment settings have successfully paved the way for laid off workers to get the best opportunities without compromising their health and safety. Through work from home arrangements, global companies can have access to a wide pool of talent without worrying about documentation and operational costs.
A global outsourcing survey last February found that 35% of American workers are in a remote work setup. This figure is a slight decrease from 2022’s 46%, but employers still prefer this setup as it offers plenty of cost savings to their firms.
Greater focus on cybersecurity and data protection.
In this world of digital information, almost everything can be delivered and disseminated online. While this has favorable outcomes, the risk of data leakage has also become more prevalent. With this, BPO firms, primarily offshore companies, exert more effort in protecting their clients’ data. These efforts include stringent security protocols and privacy measures to maintain the trust and confidence of their clients.
Versatile engagement models.
Businesses outsource their activities to ensure that all departments are working well, and corporate goals are achieved. When accepting outsourcing deals, clients have specific timeframes and goals set. Versatile engagement models enable companies to properly utilize their remote human resources through project-based to long-term contracts, or anything that would fit their needs and requirements.
Better utilization of modern technologies.
One major reason for outsourcing is the BPO firms’ proven ability to invest in modern technologies. Companies are aware that technology plays a pivotal role in optimizing business operations, making every task easier, and of superb quality. From updating equipment and software, to hiring the best professionals to operate them, technology will always be one of the top contributors in the outsourcing world.
Employing skilled workers for major projects.
Skilled workers are considered rare gems in the outsourcing industry. In fact, a 2022 survey found that 75% of employers in US struggle in choosing skilled employees to perform specific tasks. This is why companies use outsourcing to shorten the traditional hiring process and have quicker access to professionals who specialize in technology-based tasks. Digital marketing, software development, technical support, and payroll and other HR tasks are among the most commonly outsourced jobs that need skilled workers.
Top Countries that Dominate the Outsourcing Sector.
Before we list down all the important outsourcing stats that made the industry what it is today, here are the top outsourcing destinations that serve as major players in the global outsourcing market:
The Philippines
From small businesses, to large and established firms, The Philippines is always a solid option when it comes to outsourcing services and skilled manpower. With a low cost of living and excellent work ethics exhibited by its workforce, companies can be at ease that Filipino workers have the best attitude towards their outsourcing partners.
Outsourcing is so big in this archipelago, that experts projected the BPO talent pool to expand with 1.7 million employees in 2023. The Philippine BPO industry has become one of the biggest economic pillars in the outsourcing industry, holding an estimated 10 – 15% of the global BPO market.
India
Known as the “Outsourcing Capital of the World”, India dominates the sector by supplying global companies with the most experienced IT professionals in the world. India is popular for the quality of its higher education and top-caliber graduates who specialize in IT, app and software development, customer support, and other back-end operations.
China
In contrast with the majority of outsourcing locations that focus on IT and customer service, China specializes in manufacturing. With approximately 2.8 million production plants, China is an excellent outsourcing destination for businesses that need help in their production and supply chain operations. Equipped with the best technologies and an extensive workforce, its contribution to the global outsourcing market will continue to rise.
Eastern Europe
Countries in Eastern Europe like Poland, Romania, and Ukraine excel in IT services and software development. This skills’ advantage made them one of the leading countries for global outsourcing companies offering tech-related business solutions.
Southeast Asia
A favorite of local and international clients, South East Asia is home to competent professionals in digital marketing, IT, and other back office operations. Countries like Malaysia, Thailand, and Vietnam are recognized for the skills of their people as well as positive attitude towards their outsourcing clients.
Related article: 7 Top Countries for Outsourcing in 2023
Major Benefits that Outsourcing Brings to Industries
Companies that rely on outsourcing enjoy plenty of benefits and advantages. You might be wondering why a European company outsources its services to Asian countries like the Philippines and Malaysia. Well, you’ll be surprised to learn that outsourcing offers game-changing benefits that could propel every business to success.
Outsourcing can help reduce costs.
Perhaps, this is the most important benefit that outsourcing gives to businesses. Every business owner wants to save as much money as possible without compromising the organization’s daily operations. Outsourcing and shared services can minimize hiring and recruitment as well as operational costs by as much as 70%.
The outsourcing provider will shoulder all the costs associated with acquiring human resources, including the onboarding and training phases, which also allows the company to enjoy the next benefit…
Outsourcing helps them focus on core tasks.
Along with cost reduction benefits, businesses can also have a better focus on their goals with high priority levels. These include revenue-generating activities like sales, lead generation, and marketing to make sure that the business is earning more than spending. When one or more departments are being handled by a remote team, the in-house team can maximize the time and resources available to planning and designing sales and promotion campaigns. This will ensure that the organization has holistic growth.
Outsourcing gives companies access to new technologies.
With new outsourcing trends bringing immense impacts to businesses, the need for new technologies also intensifies. BPO firms regularly update their equipment and software to make sure that all departments can keep up with deadlines. Having a reliable service provider gives businesses easy access to the latest technologies that help in providing seamless operations to clients and stakeholders.
Outsourcing connects global companies to top talents.
Lastly, BPO firms can provide the best and the most experienced professionals and skilled workers who could fit project and campaign requirements. As mentioned earlier, major outsourcing countries like the Philippines and India are home to highly skilled workers and IT professionals. This means that businesses can work with these talented individuals without paying extremely high salaries compared to their North American and European counterparts.
A definitive list of outsourcing statistics in 2024 (per industry)
The outsourcing sector enjoyed rapid growth in employment and revenue in 2024. In fact, the outsourcing market is expected to reach USD 512.4 billion in size by 2030. Thanks to the help of new strategies and technologies. Outsourcing has become a strong contributor to the global economy, and its global market value is expected to rise continuously. Here’s our definitive list of valuable outsourcing statistics as delivered by reputable outsourcing survey report agencies:
General Outsourcing Statistics
Approximately 30 million jobs are at stake because of outsourcing.
A Princeton study found that more than one-fifth of the total active jobs in the world can be lost because of outsourcing. When companies start to hire remote teams to perform common business tasks, jobs lost to outsourcing become more prevalent.
Most of the high-paying jobs in the outsourcing industry require advanced and higher educational credentials.
Based on the latest global outsourcing surveys, the top industries that outsource require its outsource or offshore team to have higher educational credentials. Computer engineering, information technology, electrical & electronics drafting, and mechanical drafting are some of the most in-demand yet most difficult jobs in the world. So outsourcing these functions is a common corporate practice that global organizations adapt to maintain work and performance quality.
Large businesses are expected to outsource their functions more than small businesses.
Apart from having higher budget allocated to outsourcing, established firms operate on a larger scale. This is because they have several departments, a bigger customer base, and a bigger workforce. Experts claim that large companies are 128% more likely to need the help of a third-party service provider in completing important tasks than small businesses.
59% of businesses outsource to reduce costs.
Businesses always find ways to save money and time. A global survey found that more than half of the companies in the world see outsourcing as an effective tool to minimize corporate costs associated with recruitment, hiring, training, operations, benefits, and compensation.
Approximately 300,000 jobs are outsourced each year.
Outsourcing is projected to have an immense impact on the global economy. With 300,000 jobs being outsourced in the U.S. alone, developing countries are expected to become popular outsourcing destinations. This is due to these countries’ ability to provide a competent workforce with professionals who have proven and extensive experience in various industries.
The global outsourcing market is expected to reach its all-time high.
With USD 92.5 billion global value in 2019, the multifaceted industry is expected to grow tremendously with the availability of modern solutions and practices aided by technology. The administration outsourcing segment alone is projected to have a value of $60.21 in 2023.
Majority of China’s outsourcing deals are from the U.S.
China has become one of the most sought-after outsourcing destinations in the world. Thanks to its strong workforce and updated technology. American businesses outsource their functions to China more than any other country, which increases China’s outsourcing market growth by 30% every year.
Customer Service and Call Center
42% of contact centers step up to create a seamless omnichannel experience.
As per the June 2021 report by Customer Contact Industry Review by CCW Digital, call centers focus on building smooth and hassle-free connection between channels. Besides omnichannel support, identifying relevant metrics (37%), utilizing effective self-service customer support (49%), and training agents (50%) are among the top priorities of contact centers to deliver exceptional digital experiences to its customers.
59% of customers’ preferred phone as their primary communication channel.
Based on the State of the Connected Customer by Salesforce (2022), there was a subtle yet impactful rise in popularity (from 56% in the past three years). While SMS and email experienced a decline. In 2020, it can be noted that only 44% of customers preferred phone calls as a method of communication. This adds up to the conclusion that people favor immediate solutions to their service and product related issues and complaints.
61% of customers still favor resolutions with “human touch” – which is absent in self-service customer support.
While self-service customer support provides quicker solutions to common customer issues, the 2021 survey results as conducted through the Deconstructing Delight Report by Opinium / Freshworks state that automation still isn’t the best option. This is especially true for complex problems requiring more detailed solutions and a step-by-step approach.
44% of customers don’t like waiting for 5–15 minutes to receive and resolve their issues.
No customer wants long waiting times regardless of the complexity of an issue. Based on the 2021 survey conducted by Replicant, 44% of customers are frustrated with the standard time that they have to wait between call transfers and the actual resolution. In addition to this, 70% of them expressed difficulty in reaching out to an agent during the pandemic times, with staffing issues as the main contributor to the problem.
79% of customers identify efficiency as top trait of call center agents.
Along with product and service knowledge (75%), superb communication skills (65%), and friendliness & rapport (60%), consumers prioritize a call center and its agents’ ability to solve problems efficiently and on time. This is based on Clutch’s survey related to 5 Ways Businesses Can Improve Telephone Customer Service conducted in February 2019.
The March 2022 survey conducted by Sprout found that a vast majority of consumers have high expectations in terms of brands’ social media presence and responsiveness. Besides the 76% of consumers expecting a reply within 24 hours, 13% expect a response within an hour. These results encourage brands to improve their digital presence through active social media accounts and 24/7 customer service.
53% of CX leaders state recruitment and retention as both their major challenge and priority.
It is a known fact that the attrition rates in the BPO industry are considered relatively higher than other industries. This fact has been solidified further by a survey conducted last October 2022 by Hanover Research. Finding and keeping good talents with the best skill sets has become even more challenging after The Great Resignation, which was triggered by the pandemic.
The value of CCaaS market is expected to reach 17.12 billion dollars in 2030.
In the April 2022 report by Grand View Research, experts predict that the availability of modern technologies and integration of AI will have a huge impact on the future state of the Contact Center as a Service market. These figures also suggest a possibility of a compound annual growth rate of 19.1% in seven years.
81% of consumers expect chatbots to become a more popular and efficient CX channel by 2030.
Chatbots are one of the simplest yet most efficient CX channels that brands integrate for their websites and social media channels. Due to its straightforward approach to customer support, consumers expect chatbots to become more widespread by 2023. This is based on the 2019 study and survey conducted by Futurum Research: Experience 2030 – The Future of Customer Experience is Now.
63% of CX leaders find permanent work from home setup essential.
In a 2020 study and survey focused on the future of call centers, 63% of customer experience leaders state work from home as more than just an emergency option, but a permanent setup that is beneficial to both the company and its staff.
The study Future of the Contact Center by CCW Digital surveyed industry leaders and found the cost reduction benefits of the said setup to be essential in personal and organizational growth.
IT & Software Development
IT services make up 72% of all contract values in the world.
This figure is an excellent basis for Deloitte’s global outsourcing survey report in 2021, which ranked IT as the major player in the global outsourcing phenomenon. Finance and payroll ranked second and third, respectively. In
92% of the top 2,000 global companies use IT outsourcing.
This makes IT the most outsourced services by businesses worldwide. In fact, IT outsourcing is more popular than Business Process Outsourcing with only 59% of global companies having a contract.
By 2030, the global IT outsourcing market is expected to reach $1.06 trillion in size.
A growth rate of 8.06% from 2022 to 2030 is projected, with more businesses outsourcing software development services and roles to remote teams and international outsourcing service providers.
The preference for cloud-based solutions will continue to rise.
More and more organizations are expected to invest in cloud-based solutions, particularly data management and cybersecurity. Experts predict a rapid growth in its market value, from $530.15 billion in 2021 to a potential increase at around $1.06 trillion by 2030.
46% of top software development executives cite automation as an essential key to software development success.
In a survey conducted by Tempo, software development experts and professionals state the importance of outsourcing and automation in resolving customer experience issues which include outdated processes, low capacity, wasting time on mundane tasks, and unavailability of skilled staff.
Finance & Accounting
71% of companies outsource their tax preparation duties.
Tax preparation requires high levels of focus and accuracy. With 71% of companies in the world outsourcing tax preparation duties, it becomes the most outsourced accounting task, and fastest growing area in accounting services as well.
9.1% CAGR is predicted by experts for the global finance and accounting business process outsourcing market.
Valued at USD 56.42 billion in 2022, industry professionals predict a greater compound annual growth rate for the global finance and accounting BPO sector from 2023 to 2030.
More than 300,000 accountants in the U.S. has left their jobs in the past two years.
Despite these shocking statistics, the projected job openings for accountants are still considered low at 136,400 per year. With the usual problem of staff unavailability, companies turn to outsourcing to have access to competent accounting teams. Thus, helping the finance and accounting outsourcing thrive during and after the pandemic.
Mobile App Development
The application outsourcing market is projected to reach $118.60 billion in 2023.
App developers for various platforms are on a rise. Industry professionals have predicted an immense revenue growth for the app outsourcing market, with an annual growth rate (CAGR) of 1.84% (2023 – 2028). This can result in a projected market volume of $129.90 billion in 2028.
A huge chunk of this projected revenue comes from the U.S.
The United States is the biggest contributor in the app development outsourcing market, with approximately $44,350.00 million worth of revenue expected to be generated by the U.S. in 2023.
Human Resources
80% of companies outsource at least one HR function.
We’re talking about a global work setting. Many companies outsource their daily HR tasks for the following:
- Optimize recruitment processes.
- Improve payroll accuracy and efficiency.
- Focus on core business functions.
Companies can save an average of 22% by outsourcing HR operations.
While this might seem like a small value, saving around 22% of the total costs for HR operations is a solid proof that outsourcing business functions can help companies cut on project and manpower related expenses.
32% of American companies outsource at least one HR task.
Access to talent and technology, cost savings, and culture fits. These are just a few of the benefits that American companies can enjoy when outsourcing at least one HR task. For example, if your talent pool is packed with Filipino talents, it would be best to hire a Filipino capability trainer to easily establish rapport and trust with your team.
Outsourcing HR operations can lead to a 10 to 12% reduction in HR staff size.
Hiring in-house HR staff means paying for onboarding, training, compensation, and benefits. Outsourcing this function can help not only in reducing staff size, but more importantly, cut expenses associated with recruitment. A smaller in-house team would be easier to manage, thanks to the help of remote HR staff that can be hired under project-based, contractual, or permanent terms.
Outsourcing recruitment processes result in a 97% satisfaction rate.
Most companies follow the traditional recruitment process with specific steps that could take so much time. By outsourcing every step of the recruitment process, businesses can save so much time and resources.
77% of HR managers and specialists acknowledge outsourcing and its aid to payroll accuracy and efficiency.
Payroll is one HR function that should be handled with great focus and accuracy. Outsourcing payroll means letting a dedicated team of experienced professionals make sure that there will be no discrepancies in each payroll. A remote payroll department or team is trained to compute, compare, and verify payroll details, which result in high accuracy rates.
87% of companies that outsource their HR operations are satisfied with their outsourcing provider.
Companies invest money on outsourcing, and the BPO firms’ goal is to ensure that the services and outcomes are worth each penny. Well, good news, because more than half of the companies that outsource their business functions are happy with how their outsourcing journey is going.
75% of common HR functions can be completed by modern technology.
With the existence of online HR systems like project management and scheduling system, it would be easier for companies to follow the necessary metrics set to measure employee performance and project success. Instead of hiring an in-house team to work on payroll and benefits, outsourcing HR functions is considered a more practical approach.
68% of companies recognize HR outsourcing as a way to improve their employees’ experience and morale.
HR outsourcing is beneficial to both the organization and the employees. With a dedicated remote team dedicated to deliver the same level of effort and quality outputs for each project, the in-house team can have a more favorable experience.
29% of HR professionals believe that outsourcing HR functions give them better access to seasoned experts.
The availability of remote working solutions paved the way for professionals to work in the comfort of their homes and get paid well. This is why 29% of HR leaders believe that they are more likely to recruit and hire the best skilled staff for a specific project through outsourced recruitment processes.
Production & Manufacturing
Around 70% to 80% of manufactured products are outsourced.
From clothing and footwear, to daily necessities and electronics, a vast majority of items that people around the world were manufactured in China and distributed in their home countries. So don’t be surprised if you see a lot of products with China in its manufacturing credits. Most likely, those products originated in other nations, but are produced and manufactured in China.
Manufacturing is among the most commonly outsourced services by global organizations.
Along with information technology outsourcing, accounting, and digital marketing, manufacturing is one of the leading services that companies all over the world outsource in terms of demand and efficiency.
China excels the most in manufacturing services outsourcing, due to the availability of human and technological resources.
A huge chunk of manufacturing services in the world is being outsourced to China because of low labor costs and access to manpower.
Business Process Outsourcing in the Philippines
In the outsourcing market overview and study by Nexford University, the Philippines becomes a great example of a destination with an economy that thrives with the help of BPO. Contributing nearly $30 billion to the local economy every year, the value of the outsourcing sector continues to rise. Coming close to the end of 2023, the Philippine BPO industry has employed around 1.3 million Filipinos in over 1,000 companies since 2019.
The country’s attractiveness for outsourcing companies delivers favorable impacts in terms of employment. It is also important to note that the recent emergence of digital platforms has paved the way for Filipinos to see bigger opportunities in the freelancing and outsourcing sectors. 1.5 million Filipinos work through a digital platform, which is equal to a remote setup, in project-based, long-term, or permanent contracts.
With great support from the government, the value of outsourcing is expected to rise. Large and small businesses use outsourcing to complete time-sensitive projects and develop campaigns, which open possibilities for Filipinos to work full-time and part-time. This also helps them try and explore new skill sets, and work with multicultural teams.
Related article: Offshoring in the Philippines: Top Reasons Why Outsourcing is More Fun in the Philippines
Conclusion
Planning to outsource or offshore your business operations? There are plenty of BPO companies in the Philippines that can help you! Digital Minds BPO is one of the fastest-growing outsourcing providers that specialize in various services to optimize your daily operations. We have the right teams of skilled agents and professionals who can deliver superb outputs on time, and at incredibly affordable rates.
We hope that these top outsourcing stats help you pick the right company to achieve all your business goals and provide better opportunities for a bigger workforce. Contact us now, and let’s start building your dreams!
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