Latest Outsourcing Trends

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Latest Outsourcing trends & insights

What’s Shaping the Future?

As we move through September 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.

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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.

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.

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.

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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.

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.

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