Outsourcing is the practice of hiring a third-party company to perform tasks that were previously done in-house.
Outsourcing can be a cost-effective way to get access to specialized skills or resources, or to free up internal resources for other priorities.
There are several benefits that come from outsourcing, but there are also risks.
However, the benefits of outsourcing usually outweigh the risks.
If you’re considering outsourcing, be sure to first do your research and choose a third-party source that can meet your needs.
In this article, we’ll discuss outsourcing statistics and the benefits and challenges of outsourcing along with other relevant information.
- 1 Key Statistics
- 2 Top Outsourcing Statistics in 2023
- 2.1 1. IT, Customer Service, and Accounting Are Among the Top, Most-Used Outsourcing Services.
- 2.2 2. Global IT Outsourcing Revenue Is Expected to Reach Over $777 Billion by 2028.
- 2.3 3. All Global Outsourcing Is Expected to Reach $731 in 2023.
- 2.4 4. 92% of G2000 Companies Outsource IT Tasks.
- 2.5 5. 9% of The GDP in The Philippines Is from Business Process Outsourcing.
- 2.6 6. 37% of Small Businesses Outsource No Less than One Business Task or Process.
- 2.7 7. In 2020, Around 1.11 Million New Workers Joined the Services Outsourcing Industry in China.
- 2.8 8. The Average Cost Savings from Call Center Outsourcing Is 20% to 30%.
- 2.9 9. 59% of Organizations Use Outsourcing to Cut Costs.
- 2.10 10. 8 in 10 U.S. Businesses in The United States Said They Planned to Outsource in 2022.
- 2.11 11. 47% of Professionals Outsource Graphic Design Services
- 2.12 12. India Holds a 65% of The Global Offshore Share of Outsourcing in The BPO Segment.
- 2.13 13. 37% of Outsourcing Among U.S. Small Businesses Is for Accounting and Finance Tasks.
- 2.14 14. Between 70% and 80% of American Products Are Outsourced.
- 2.15 15. The United States Leads in The Outsourcing Realm with 84.2% of The Market Share.
- 2.16 16. The Global HR Outsourcing Segment Is Expected to Expand to $10.90 Billion by 2026.
- 2.17 17. 300,000 Jobs Are Outsourced from The United States to Other Countries Each Year.
- 2.18 18. 77% of Americans believe that outsourcing harms the country’s economy.
- 2.19 19. Outsourcing Can Reduce Labor Costs by Up to 90%.
- 2.20 20. Between 1979 and 2009, 8 Million American Jobs Were Outsourced.
- 3 FAQs
- 4 Conclusion
- 5 Sources
- IT, customer service, and accounting are among the top, most-used outsourcing services.
- Global IT outsourcing revenue is expected to reach over $777 billion by 2028.
- All global outsourcing is expected to reach $731 in 2023.
- 92% of G2000 companies outsource IT tasks.
- 9% of the GDP in the Philippines is from business process outsourcing.
- 37% of small businesses outsource no less than one business task or process.
- 1.11 million new workers joined the services outsourcing industry in China.
- The average cost savings from call center outsourcing is 20% to 30%
- 59% of organizations use outsourcing to cut costs.
- 8 in 10 U.S. businesses in the United States said they planned to outsource in 2022.
Top Outsourcing Statistics in 2023
1. IT, Customer Service, and Accounting Are Among the Top, Most-Used Outsourcing Services.
Professional services are the most popular and most used type of outsourcing.
IT, customer service, and accounting are among these top, most-used outsourcing services.
Business outsourcing has a large chunk of the market share in today’s work environment.
(Nearshore Technology, Zippia)
2. Global IT Outsourcing Revenue Is Expected to Reach Over $777 Billion by 2028.
According to current data, the global IT outsourcing segment revenue figure is expected to achieve $460 billion (USD) in 2023.
With a CAGR of 11.07% between now and 2028, this figure is expected to reach over $777 billion (USD) by 2028.
For reference, the United States is expected to account for $167.9 billion in 2023.
3. All Global Outsourcing Is Expected to Reach $731 in 2023.
Even before the global pandemic businesses were finding it cost-effective to outsource some of their workload.
It’s been going on for years, but today it’s a trend that doesn’t look like it’s going away.
Research shows that the overarching global business of outsourcing will reach $525 billion (USD) by 2030. Some segments, like IT, are expected to achieve significant figures.
(Market Research Future)
4. 92% of G2000 Companies Outsource IT Tasks.
Within this 92% of G2000 companies that are using IT outsourcing, the tasks include software development, system administration, and data center management.
IT outsourcing also includes other tasks, but these are the primary outsourcing tasks for G2000 companies.
5. 9% of The GDP in The Philippines Is from Business Process Outsourcing.
The Philippines is a major hub for outsourcing nowadays, particularly in the IT and call center industries.
The skills and talent exist all over the world for a variety of outsourcing jobs.
Data shows that 9% of the GDP of the Philippines comes from BPO (business process outsourcing).
According to our research, BPO has been a significant contributor to the country’s economy.
(The Portugal News)
6. 37% of Small Businesses Outsource No Less than One Business Task or Process.
Outsourcing is such a growing trend that 37% of small businesses look for ways to save time and money, which is outsourcing.
This data comes from 2019, but it’s unlikely that it’s changed much, if at all. Moreover, another 52% in a 2019 survey said they plan to implement outsourcing.
7. In 2020, Around 1.11 Million New Workers Joined the Services Outsourcing Industry in China.
China is a major player in the global outsourcing market, and its workforce is growing rapidly.
In 2020, around 1.11 million new people started working in the outsourcing service industry in this country.
This figure for China and outsourcing workers has stayed steady since 2016.
8. The Average Cost Savings from Call Center Outsourcing Is 20% to 30%.
This can be even higher for certain tasks, such as software development. The cost savings does vary from industry to industry and task to task.
In terms of call center outsourcing, savings of at least 20% to 30% has been found. Furthermore, 4% of organizations use customer support operations teams from various providers.
(ROI CX Solutions)
9. 59% of Organizations Use Outsourcing to Cut Costs.
Studies and surveys have found that 59% of businesses use outsourcing for certain tasks mostly to cut costs.
Outsourcing has become a popular and trendy option for small to large businesses to save money.
This same survey found that another 26% of small businesses said they outsource to get expert help.
10. 8 in 10 U.S. Businesses in The United States Said They Planned to Outsource in 2022.
In 2022, around 8 in 10 businesses in the United States said they planned to outsource in that same year.
Likewise, 128% of large businesses said the same thing, which accounts for the businesses more likely to implement outsourcing of some kind in their business operations.
11. 47% of Professionals Outsource Graphic Design Services
Another survey finding showed that in 2022, 47% of professionals outsourced graphic design services.
Another 43% said they outsource video creation services.
Graphic design can cover a wide range of image-related services from removing backgrounds from images to creating a logo.
India is the country with the highest percentage of BPO outsourcing offshore at 65%.
Our sources tell us that outsourcing in India includes outsourcing tasks for accounting, customer support, teleradiology, and even animation.
Businesses that outsource go where the top skilled talent is that will also save them money. This country plays a major role in the global remote workforce.
13. 37% of Outsourcing Among U.S. Small Businesses Is for Accounting and Finance Tasks.
Data from Clutch research reported by PR Newswire shows that 37% of small businesses in the United States utilize outsourcing for their finance and accounting tasks.
These outsourced tasks provide benefits for small to large businesses for cutting costs and hiring top talent to do the job.
14. Between 70% and 80% of American Products Are Outsourced.
American manufacturers outsource 70% to 80% of finished products.
Data from 2004 tells us that this is true. Some people think that outsourcing is a new thing, but it dates back to before 2004.
It’s not uncommon or unusual for manufacturers in the United States to enlist outsourcing as part of their processes.
(The Outsourcing Revolution Report)
This data from 2017 refers to how much a country outsources as opposed to where it’s outsourced.
The United States is the country leading the way with 84.2% of outsourcing deals being made.
The United Kingdom and Australia each come in second as leaders in the outsourcing usage segment.
16. The Global HR Outsourcing Segment Is Expected to Expand to $10.90 Billion by 2026.
According to data, the global human resources outsourcing market is expected to grow by $10.90 billion between 2022 and 2026.
That said, it’s expected to see a deceleration CAGR of 4.87% over this period.
17. 300,000 Jobs Are Outsourced from The United States to Other Countries Each Year.
The United States is known to outsource an average of 300,000 jobs to other countries every year.
Tech jobs are often outsourced offshore to India. It’s believed that more than 30 million American jobs are susceptible to outsourcing.
Moreover, 66% of American businesses outsource jobs from at least one department.
18. 77% of Americans believe that outsourcing harms the country’s economy.
According to a Gallup poll, 77% of Americans think that outsourcing is harmful to the US. economy.
They don’t just mean due to job loss either.
The concerns cover more than job loss, but the lack of understanding in communications in the customer service area is the most concerning factor.
In other words, most Americans are concerned about things going wrong with an order due to a communication issue that occurs from outsourcing.
19. Outsourcing Can Reduce Labor Costs by Up to 90%.
Overall, outsourcing to overseas nations can help American businesses save between 70% and 90% in labor costs alone.
This is due to the fact that outsourced labor to countries like the Philippines is cheaper for American companies because there is a low cost of living there.
20. Between 1979 and 2009, 8 Million American Jobs Were Outsourced.
In case you thought that outsourcing was a new thing, the data shows that between 1979 and 2009, 8 million American jobs were outsourced to other countries.
This outsourcing came from the manufacturing industry. This has resulted in 51,000 American manufacturing plants to be shut down.
What Is Outsourcing?
In the simplest terms of the word, outsourcing is when a person or company hires contractors, freelancers, or outside agencies or other entities to perform certain work-related tasks that were formerly done in-house or done by the individual.
What Types of Outsourcing Are Used?
There are several unique types of outsourcing that include the following:
Project Outsourcing: Involves hiring a third part to handle specific projects like the launching of a new website or the creation or development of a new product or service.
Process-Specific Outsourcing: The hiring of a third party to handle certain functions or processes like IT support, helpdesk, customer service, accounting, etc.
Logistics Outsourcing: Hiring a third-party person or agency to manage the transporting and warehousing of products (goods).
Professional Outsourcing: This is when you hire a third-party person or agency to provide and deliver specialized professional services like copywriting, engineering, marketing, legal counseling, etc.
Operational Outsourcing: When you hire a third party to manage all your company operations like call center management or manufacturing management.
The outsourcing type you use will be determined by your industry, your needs, and your budget.
What Are the Benefits of Outsourcing?
We found several benefits of outsourcing which include:
• It’s cost-effective
• You get a quicker turnaround of services
• You get access to specialized skills
• You get access to more skilled and top talent
• You can prevent employee burnout
So, you can save money, get things delivered and done faster, utilize highly skilled specialized service providers or agencies, gain access to top talent for certain skills, and your full-time employees can perform their tasks without the extra burden that causes burnout.
What Are the Disadvantages to Outsourcing?
As with the good of outsourcing comes the not so good.
Let’s consider these downfalls of outsourcing.
• Data protection and confidentiality risk (privacy concerns)
• Financial and reputation risk (negligent or incorrect work)
• Negative affect on your workforce (morale)
• Lack of consistency (due to editing, altering, or substituting changes – time)
• Loss of control (Lack of control of how the service is being handled)
• Lack of flexibility (no immediate access)
• Communication issues (can be remedied via technology)
It’s important to have contracts in place and to choose an outsourcing agency or individual who understands your needs, your company culture and mission, and effective methods of communication and contact.
Sometimes, even with all the factors in place, outsourcing can have its challenges.
It’s ultimately up to you whether outsourcing will benefit you or not.
Outsourcing in the labor force has become wildly popular among businesses of all sizes seeking to find ways to cut costs and boost productivity and efficiency.
This is what the statistics above show us. Overall, outsourcing has more benefits than disadvantages.
It’s wise to know your business needs and to create a strong interviewing and onboarding process for the third-party people or agencies you choose.
The risks and benefits of outsourcing must be weighed before a business decides to implement any kind of outsourcing.
Considerations should include the quality of labor, any legal issues that may arise, issues of cultural understanding, and other potential risks.
We shared some of the benefits and risks with you for your consideration in the FAQs section.
We urge you to read it and save it.
We hope you have learned something of value from these outsourcing statistics we researched and shared with you today.