Latest Outsourcing Trends
As we move through August 2024, the outsourcing landscape continues to evolve, driven by technological advancements and changing business needs and wants. If you’re not utilizing some form of outsourcing, you’re already falling behind. However, it’s not too late to catch up. In this blog, we’ll explore the key outsourcing trends to watch in 2024.
The Growth of the Global Outsourcing Market
The global outsourcing market is on track to reach an outstanding $769.7 billion in 2024. This growth underscores the increasing reliance on outsourcing as businesses seek cost-effective and efficient ways to manage various functions. From IT services to business processes, outsourcing is becoming an integral part of strategic planning.
Major Players: G2000 Companies Lead the Way
A significant 57% of G2000 companies leverage outsourcing to maintain competitiveness and operational efficiency. These large corporations recognize the benefits of outsourcing, from reducing overhead costs to accessing specialized skills. This trend is likely to continue as more companies see the value in partnering with external providers.
Stats from doit.software
- IT outsourcing remains a dominant trend, with 76% of businesses channeling an average of 8.1% of their budgets into this area to ensure technology expertise and business continuity.
IT Outsourcing: A Dominant Force
IT functions remain the most commonly outsourced services, with 76% of businesses opting to outsource their IT needs. Companies allocate an average of 8.1% of their budget to IT outsourcing, highlighting its critical role in business continuity and innovation. By outsourcing IT, businesses can focus on core activities while ensuring their technology needs are met by experts.
Business Process Outsourcing: A Multifaceted Approach
Business process outsourcing (BPO) is another key trend, with 52% of executives outsourcing various business processes. Within this segment:
- 64% of companies outsource legal tasks
- 61% outsource tax-related functions
- 57% outsource human resources
This diversification allows businesses to streamline operations and reduce the burden on in-house teams, leading to increased efficiency and productivity.
The US: A Major Contributor to Outsourcing Revenue
The United States plays a pivotal role in the global outsourcing market, generating 36% of the total industry revenue. American businesses outsource approximately 300,000 jobs annually, reflecting the country’s strong inclination towards leveraging external expertise. This trend is driven by the need for cost savings, access to skilled labor, and the ability to focus on core business functions.
Asia Pacific: The Outsourcing Hub
Asia Pacific countries have emerged as the most attractive outsourcing destinations, capturing 23% of global IT revenue in 2023. The region’s appeal lies in its large talent pool, competitive costs, and robust infrastructure. As businesses continue to seek efficient outsourcing solutions, Asia Pacific is expected to maintain its position as a leading hub.
Outsourcing Costs for Small Businesses
For small businesses in the US, outsourcing represents a significant investment, with an average annual expenditure of $198,550. Despite the costs, many small businesses find outsourcing to be a valuable strategy for growth and scalability. By outsourcing non-core functions, small businesses can allocate resources more effectively and focus on driving innovation and customer satisfaction.
Learn more about the offshoring trends in 2024
- Corporate Leaders
57% of G2000 companies are leading the charge in outsourcing, recognizing its potential to reduce costs and enhance operational efficiency.
- Asia Hub
Asia Pacific is a key outsourcing hub, drawing 23% of global IT revenue in 2023 due to its vast talent pool and cost advantages.
- Trend Shift
The trends in 2024 emphasize the growing importance of outsourcing in maintaining competitiveness and operational efficiency across industries.
- Strategic Advantage
Conclusion: Embracing the Future of Outsourcing
The latest outsourcing trends in 2024 highlight a dynamic and evolving market. From the substantial growth of the global outsourcing market to the leading role of the US and the prominence of IT outsourcing, businesses worldwide are increasingly relying on outsourcing to stay competitive. By understanding these trends and strategically leveraging outsourcing, companies can position themselves for success in an ever-changing business landscape.