The Ultimate List of Outsourcing Statistics

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U.S. $620 billion

BPO market value by 2032

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8.5%

BPO sector compound annual growth rate by 2032

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U.S. $98 billion

Expected growth of the tech outsourcing market

Revenue growth in the BPO sector

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Global markets and improvements in technology have changed the way businesses work. For many, staying competitive means capitalizing on the world being a smaller, more tech-savvy place, and enjoying the benefits of outsourcing.

Hiring an overseas workforce to outsource certain business functions can lead to lower overheads, increased growth and greater focus and service quality. Combined, these benefits mean a happier looking bottom line. On paper, it all sounds great. But for a business sitting on the fence about whether to offshore, promises and benefits that “sound great” aren’t enough.

You need evidence and you’ve come to the right place. Here, we take you through the ultimate list of outsourcing statistics, using current data from trusted sources.

Why businesses outsource

Deloitte’s 2021 Global Shared Services and Outsourcing Survey Report involved over 600 respondents from outsourcing and shared services leaders in 45 countries. What they discovered was that in order to keep up with client expectations, outsourcing providers are starting to change the way they look at qualifying ‘talent’. Outsourcing providers who are deemed ‘successful’, according to Deloitte, in meeting client demands are:

  • Focusing more on diversity within their leadership teams, with more than 80% having about a third of their leadership team composed of minorities and women
  • Adopting new approaches to talent, with 67% building continuous improvement and innovation into talent programs, and focusing on work/life balance and flexible practices as key strategies for retaining talent
  • Embracing digital transformation as a strategic agenda with 72% of them having already implemented robotic process automation, 55% having a single-instance ERP and 53% possessing cloud or AWS functions.

What remains clear, as it did back in Deloitte’s 2020 Global Outsourcing Survey, is that outsourcing providers continue to evolve and adapt to rapidly changing geopolitical conditions as they seek to provide value-added services and high-impact business outcomes for their clients.

From these key findings, Deloitte was able to identify what key benefits organizations were receiving from engaging successful outsourcing providers. While reducing costs is still a very big reason organizations outsource, a new contender has been unveiled for 2022. Respondents considered standardization and efficiency of processes as the top factor, compared with reducing costs and driving business value, although they remain immediate and tangible benefits.

The Ultimate List of Outsourcing Statistics

In 2021, Clutch surveyed 500 organizations in the U.S. and discovered that the reason 80% of survey respondents planned to outsource was to realize a host of benefits, including improved efficiency, business growth, and the chance to work with experts. The reasons behind their decision to outsource varied:

  • 27% outsource to improve their efficiency and save time
  • 19% outsource to support business growth and scalability
  • 33% outsource to access flexible resources
  • 26% outsource to work with an offshore expert.

The conclusion is that by outsourcing, businesses are rewarded with extra efficiency gains and greater staff support. This allows them to scale, remain competitive, and (potentially) improve their services and offerings. That’s good news for consumers.

Discover how 12 organizations from varying industries invested in offshore teams in the Phillipines to meet independent business needs.

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Why offshoring has become popular

According to Fact.MR, the global business process outsourcing (BPO) industry is expected to grow at a compound annual growth rate (CAGR) of 8.5%, reaching a total market value of US $620 billion by 2032. The research firm attributed this growth to organizations who have developed an increased reliance on the convenience of outsourcing services.

Businesses are feeling positive about their outsourcing relationships, especially those who are pursuing robotic process automation (RPA) and cloud integration within their outsourcing solutions. RPA and cloud integration go hand in hand with the cost savings objectives companies had in 2019.

What level % of savings have been achieved

Questions organizations ask before choosing to outsource

Which sectors and functions are outsourced the most?

Some business functions and industry sectors lend themselves better to outsourcing than others. This boils down to practical issues around setup and management. According to Deloitte’s 2021 report, the most commonly outsourced services are IT services (54%), finance (44%), payroll services (32%) and customer service or contact centers (22%).

Which sectors and functions are outsourced the most

Infiniti Research Limited released a report which states that the global tech outsourcing market is expected to grow by US$98 billion during 2020 - 2024. A large part of this success will be a result of the IT telecommunications sector. Advancements in technologies, more companies moving to the cloud, and increased global mobile usage, all boost the telecommunications sector and offshoring countries that can support its rapid development.

Most commonly outsourced business processes

Which regions are the most popular outsourcing locations and why?

A.T. Kearney compiled a report that, although completed in 2019, is still being widely used to identify the countries with the strongest underlying fundamentals to deliver outsourcing services. The top 10 countries were India, China, Malaysia, Indonesia, Vietnam, the United States, Thailand, the United Kingdom, Brazil and the Philippines. When professional services company KPMG analyzed outsourcing deals closed in Q1 2017, the US contributed 41.5% of the total deal value. But Asia Pacific regions and Europe, the Middle East and Africa (EMA), aren’t far behind.

An increased willingness to adopt outsourcing in the EMA and Asia Pacific has sent figures upwards. In the first quarter of 2017, the EMA’s contribution to the global outsourcing deal value was a healthy 35% (with 22.07% of deals coming from the United Kingdom). This was up on the last quarter of 2016, when it sat at 27%. Likewise, Asia Pacific’s contribution to global outsourcing deals rose from a mere 16% in the last quarter of 2016, to 23% in Q1 of 2017. In the same KPMG report, Australia and India were identified as key contributors to the global outsourcing market.

Major outsourcing buyer regions

What makes the Philippines one of the top outsourcing destinations?

A.T. Kearney, in its Global Services Location Index (GSLI), ranked the Philippines as an industry leader in outsourcing. With excellent communication skills in both oral and written English, the Philippines offers a balanced package of excellent customer service with reduced labor costs. More importantly, the government is very supportive of the offshoring industry, with a nationwide focus on infrastructure and telecommunications investments, especially in the main cities. So what do the statistics suggest it has going for it?

Philippines economic performance

The effects of disruptive automation and cloud working

When it comes to outsourcing, technology is key. The key transformation enablers employed by global BPO organizations involve robotic process automation (RPA), single-instance ERP, cloud-to-cloud (AWS) and virtual assistants or chatbots to name a few.

The effects of disruptive automation and cloud working

RPA is expected to be the most desirable digital enabler for outsourcing for the next few years. While cloud systems were number one back in Deloitte's 2019 report, they’ve moved down to fourth as 47% of respondents already have implemented cloud based systems.

However, there are challenges that BPO providers face when deploying the latest automation software, like RPA.

What are the biggest challenges you face today with deploying automation

As the popularity of RPA matures for logical rule-based processes, the use of advanced technologies like artificial intelligence (AI) is also becoming widespread. According to Deloitte’s, “Automation with Intelligence” survey, 58% of respondents had already started implementing AI. There was higher acceptance and increasing adoption of AI in companies that were using RPA. As maturity increases, this trend is unstoppable as more and more organizations experience these benefits.

While it may appear cheaper, automation still needs setting up and monitoring: cue the human workforce. Plus, some jobs simply can’t be automated. Healthcare, HR, telecommunications and customer service aren’t as robot-friendly, so offshoring continues to rise, despite increases in automation in other areas. This means businesses can outsource high-level roles to stay lean in a competitive environment.

This ultimate list of outsourcing statistics shows how popular offshoring continues to be. As technologies and infrastructure continue to evolve, particularly in the Philippines, companies needing to grow and remain competitive in the global market, can’t afford to overlook the cost savings and functional benefits of outsourcing.

The proof is in the pudding

Outsourcing has been a key to success for countless organizations that have benefited from its potential to reduce employment costs by up to 70%, improve efficiencies and provide the support needed to overcome unexpected hurdles and pursue business growth.

To summarise, let’s recap the key outsourcing statistics outlined in this blog:

Our ‘Case Study Portfolio - Real Challenges, Our Solutions’ showcases 12 in-depth, real-life examples of how offshoring in the Philippines has reaped rewards for organizations in industries as diverse as healthcare, eCommerce, insurance and tourism.