The Ultimate List of Outsourcing Statistics for 2023
Outsourcing is a cost-effective and highly efficient way for companies around the world to gain access to more skills, technology, or any expertise they need in a fairly short time.
During the last couple of years, many businesses have struggled to make ends meet, largely due to the COVID19 pandemic. This has significantly influenced the outsourcing market and increased its demand drastically.
Small businesses, along with global corporations, choose between various outsourcing solutions, including IT services and digital marketing services, whereas some even choose to outsource their entire business process.
In this blog, we’re going to break down key outsourcing statistics to know, along with some of the most popular trends and how many jobs there are in the outsourcing market in 2022.
Outsourcing Statistics 2022 (Highlights)
- Up to 48% of companies choose to outsource offshore
- The primary enabler in outsourcing for around 90% of companies is cloud
- Approximately 300,000 jobs are outsourced every year in the US
- Approximately 24% of small companies outsource to increase levels of efficiency
- Business process outsourcing is set to hit a market value of $620 billion by the year 2032
- The IT outsourcing market will exceed $1.3 trillion by the end of 2023
- 27% of businesses reported a 10-20% cost saving when implementing RPA (robotic process automation)
Outsourcing Industry Statistics
1. Up to 48% of companies choose to outsource offshore
According to a study done in the United Kingdom, approximately 48% of companies are choosing to outsource offshore, mostly due to the lack of talent in their respective marketplaces.
When it comes to the United Kingdom, the most popular market for outsourcing is London, which comes as no surprise. Outsourcing statistics show that only 17% of businesses located in London never outsource any business function.
That percentage is slightly higher for the remainder of the nation, where the average rate of outsourcing amongst businesses is up to 26%.
2. 45% of companies planned to increase their outsourcing since the COVID19 pandemic started due to a lack of skillset in-house
Once the COVID19 pandemic began, many companies around the globe saw the rising need to improve and optimize their workplace, as well as bring in talent and new skills.
A study has found that up to 48% of companies knew that they needed to update their work environment due to the pandemic, whereas 45% of global corporations stated that they planned to outsource more work for the same reason.
The study also indicated that a lot of the effort previously used to outsource business will be reallocated to searching for more professionals with technical skills.
3. The top reason for outsourcing among 70% of companies is cost reduction
Outsourcing statistics show that the predominant reason why companies choose to outsource is simply due to the fact that it lowers their costs.
Outsourcing helps to lower overall business costs by significantly lowering the costs that are normally associated with hiring in-house staff, which include recruiting costs, various benefits, and health insurance, depending on the employer and location.
4. Up to 85% of logistics leaders are expected to see an increase in the outsourcing budget
Outsourcing industry statistics show that the number of companies that outsource essential processes and tasks in 2022 and beyond will significantly increase.
Statistics have already shown that approximately 85% of logistics leaders were expecting an increase in their outsourcing budget back in 2020.
The reason why is simply due to the fact that outsourcing in logistics can help companies further grow and develop. Approximately 70% of survey respondents stated that the end-to-end supply chain and objectives, in general, were met or even exceeded thanks to outsourcing.
5. India is continuing to grow as the top country to outsource business from
Due to the large talent pool available and the high-cost savings, India is still dominating the outsourcing market. According to a review of multiple studies done in 2021, India was the top choice for outsourcing offshore for companies around the world.
Top competitors in the outsourcing industry include the Philippines, closely followed by Ukraine, Poland, Brazil, and Mexico.
Global Outsourcing Market Statistics
6. The primary enabler in outsourcing for around 90% of companies is cloud
According to a survey, the vast majority of companies who choose to outsource have adopted cloud services as the primary enabler in their outsourcing journey.
However, the survey further showed that a big percentage of respondents also stated that a lack of maturity for solutions and operating models in the cloud has been a major setback when it came to realizing the full benefits of this workplace environment.
7. 62% of companies around the globe are looking to renegotiate their outsourcing terms and contracts
Companies are still battling budgetary issues caused by the COVID19 pandemic, as the marketplace continues to grow and evolve exponentially. A study has found that up to 62% of companies are planning on negotiating their outsourcing deals and contracts again.
The report found that up to 59% of companies are looking to renegotiate the terms and conditions of the outsourcing contracts, 56% of companies would like to change the pricing structure, and up to 48% of companies would like to reinvent the current delivery model.
8. Only 25% of UK-based companies have never outsourced
Outsourcing statistics for the United Kingdom show that around 70% of B2B companies outsourced key tasks and processes to third parties in order to be able to meet their goals.
Other statistics show that approximately 34% of companies regularly outsource IT support, whereas up to 28% of companies outsource for payroll tax purposes.
Furthermore, 24% of companies within the UK outsource accounting and printing services, 21% outsource software development, and 14% outsource recruiting services.
9. 32% of companies believe they will outsource less after the COVID19 pandemic ends
According to a study of the UK’s post-pandemic marketplace situation, approximately 32% of businesses have stated that they think there will be a smaller need for outsourcing once the pandemic ends.
Highly likely reasons for this include budget concerns, privacy standards, and a lack of control over security.
10. IBM is the largest outsourcing business in the world
Global outsourcing industry statistics show that the largest outsourcing company in the world is IBM. IBM’s global outsourcing revenue is predicted to be around $76.5 billion.
The company dominates the global market for outsourcing by offering e-business outsourcing, transformational outsourcing, application management services, trading networks, and more.
United States Outsourcing Statistics
11. Approximately 300,000 jobs are outsourced every year in the US
A report on the global market for outsourcing has found that businesses in the United States are outsourcing approximately 68% of their required workforce.
There are currently 300,000 jobs overseas each year, which accounts for around $85.6 billion on a global level. This means that there are approximately 300,000 jobs lost to outsourcing each year.
12. The number of workers US overseas affiliates hired in 2018 was 14.4 million
Back in 2018, there was still a large number of jobs outsource overseas. Those outsourcing companies stated that they hired people in various sectors.
The most popularly outsourced industries are IT, call centers, human resources, and manufacturing outsourcing.
13. Almost 60% of US marketers didn’t see any COVID-related changes in the outsourcing marketing activities
The latest outsourcing statistics show that only 19.4% of marketing professionals in the United States noticed any kind of change in their outsourcing marketing activities during the COVID19 pandemic.
Small Business Outsourcing Statistics
14. Approximately 24% of small companies outsource to increase levels of efficiency
A study on outsourcing statistics found that approximately one-third of small businesses, or 37% to be more precise, outsource at least one of the core business functions in order to reduce costs and improve skillsets at the moment.
The surveyed businesses outsourced technical tasks such as IT services (37%), accounting (37%), and digital marketing services (34%).
Additionally, more than half (52%) of respondents stated that they were planning on upping their outsourcing strategy.
15. A large number of small businesses use outsourcing as a way of accessing specialist skills
Approximately 18% of respondents said that they used outsourcing as a way to gain access to expert assistance and improve available skill sets.
The most commonly sought-after skills included IT services, digital marketing, sales, and accounting.
16. Larger businesses are 66% more likely to outsource compared to small businesses
Outsourcing statistics show that up to 29% of businesses that have fewer than 50 employees outsource, compared to 66% of companies that have 50 or more employees.
This means that small businesses outsource to a much lesser degree and spend less money when compared to large companies and global corporations.
17. Up to 37% of small businesses outsource for at least one of their business processes
The most commonly outsourced skills for small businesses include accounting (37%), IT tasks (37%), digital marketing (34%), and human resources and development (28%).
This is largely due to the fact that small businesses often do not have the required skills and proficiency for important business processes such as accounting, which they choose to supplement with virtual and outsourced accounting services.
Business Process Outsourcing Statistics
18. Business process outsourcing is set to hit a market value of $620 billion by the year 2032
Business process outsourcing (BPO) became increasingly popular during the COVID19 pandemic when many businesses were forced to take their business to the cloud and outsource the majority of jobs.
Outsourcing statistics show that the market value is set to hit $620 billion in approximately 10 years from now, indicating significant and continued growth for this industry. Just in 2015, the BPO sector generated an astonishing $22 billion in revenue.
19. Up to 54% of companies state that they haven’t seen any change in service quality when choosing to outsource their business process
According to a recent report, approximately 96% of outsourcing service relationships are highly rated by teams around the world. Despite the still ongoing pandemic, businesses were able to maintain a high-quality service thanks to outsourcing.
More than 50% of all businesses that chose to outsource have stated that they haven’t seen any change in the quality of their services. What’s more, some have stated that their quality of service has even improved.
When it comes to business process outsourcing in the US alone, it accounts for approximately 85% of the total $92.5 billion that is spent on BPO services globally on average.
20. India, China, and Malaysia are the top countries for business process outsourcing
Indian outsourcing industry statistics show that India is still the top outsourcing destination for many corporations, especially when it comes to financial service executives and the IT industry.
Statistics show that up to 71% of financial service executives outsource and offshore some of their core services.
When it comes to China and Malaysia, the outsourcing market is expected to slowly move more and more towards them in the future, as they’re already amongst the top 5 international outsourcing countries.
IT Outsourcing Statistics
21. The IT outsourcing market will exceed $1.3 trillion by the end of 2023
According to outsourcing statistics and reports, the IT sector outsourcing market will exceed a whopping $1.3 trillion by the end of 2023, making it a particularly fast-growing environment in the outsourcing business.
Outsourcing statistics point out that the ever-increasing demand for cloud and SaaS (software as a service) solutions are going to drive this demand for IT services even further.
22. 83% of IT leaders would like to outsource security
Data security has always been an important aspect of the IT industry. According to a report from a cloud services provider, outsourcing cybersecurity requirements are still the biggest focus for the majority of companies.
Namely, approximately 83% of companies that have an in-house security team are currently considering outsourcing some of their security efforts to managed service providers.
23. More than 65% of organizations are planning on increasing or maintaining their IT outsourcing efforts in the upcoming 2 years
A study has found that up to 65% of businesses and companies are planning to continue outsourcing either at the same rate or at an increased rate in the upcoming couple of years.
Additionally, around a third of the respondents stated that they were going to increase their outsourcing requirements in the IT sector.
24. IT and business service outsourcing hit record levels in 2021
Organizations around Europe invested around $26.5 billion into IT services and business services back in 2021. Statistically, this is the highest annual spending that’s ever been recorded.
Additionally, cloud-based services are beginning to close the gap on traditional outsourcing requirements. A 233% increase in sales has been noted when compared to previous years. Moreover, in 2021, as-a-service outsourcing contracts have increased in value by 41%.
25. Outsourcing accounted for 13.6% of the total IT budget in 2020/2021
(State of European Tech)
The total budget for the IT industry grew from 12.7% back in 2019 to 13.6% in the year 2020. Medium-sized tech businesses were the ones responsible for this massive outsourcing industry growth in IT.
Even though the world was struck by the pandemic, various tech companies decided to further increase outsourcing efforts and their associated budgets and collaborated with offshore and domestic IT outsourcing partners and outsourcing companies.
26. The most frequently outsource IT services function is software app development
(Red Bee Software)
Outsourcing statistics show that software development is and continues to be the single most commonly outsourced service in the IT niche. App development is one of the most frequently outsourced processes.
Statistics show that up to 60% of companies choose to outsource software development as one of their outsourced services at some point in their business lifespan, largely due to a lack of talent in-house and cost-saving purposes.
Outsourcing Cost Savings Statistics
27. 27% of businesses reported a 10-20% cost saving when implementing RPA (robotic process automation)
A study about the current state of outsourcing in the modern market has indicated cost is the most common concern for the vast majority of companies that choose to outsource.
27% of respondents stated that they have achieved up to 20% cost savings by implementing a form of automation known as robotic process automation (RPA).
However, around 53% of respondents stated that their achieved savings were less than 10%, 9% of respondents had savings between 20% and 40%, and only 2% of respondents stated that they achieved savings of more than 60%.
28. Outsourcing in the Philippines can reduce costs by 70-90%
The Phillippines has a much lower wage range and cost of living compared to other countries around the globe, making it the perfect choice for businesses who wish to outsource jobs.
Considering the fact that this country is still in the early developmental stages, it makes sense why so many companies outsource jobs there. The minimum daily wage for the Philippines is currently set at just $9.
29. Up to 70% of businesses chose to partner with an outsourcing company for cost reduction purposes in 2020
The second most common reason for outsourced jobs in 2020 was flexibility (40%), largely due to the pandemic that left businesses with limited options in terms of workspace and work hours.
Job outsourcing statistics show that speed to market was an important factor for many businesses (20%), and access to tools and processes were also noted as important aspects of making the decision.
The most outsourced jobs during the pandemic included jobs in IT, sales, marketing, and accounting, whereas HR outsourcing statistics show that the most outsourced jobs were HR consulting, benefits administration, and time tracking.
How Can These Outsourcing Statistics Help You and Your Business?
Global outsourcing is and will continue to be an ever-growing market, helping countless corporations and small businesses. The types of business process outsourcing services that are constantly growing and in high demand include IT, marketing, and sales.
The outsourcing industry offers an invaluable way for businesses of all sizes to gain access to the crucial talent and expertise they might need in a constantly changing business environment.
Outsourcing also allows businesses to grow more comfortable with working with professionals from various countries of the world in a flexible, cloud-based environment.
By offering the benefits of cost reduction, increased efficiency, and greater competitive advantage, outsourcing is only going to continue growing in the upcoming years.