Although outsourcing is nothing new, the practice has been gaining increased popularity over recent years, and for good reason too! Namely, as our latest outsourcing statistics will reveal, offloading non-core business functions to other companies makes perfect sense — it helps you focus on core business processes, saves valuable time and money, and provides access to skilled labor and years of experience and industry expertise.
However, outsourcing is not without its faults. Over the years, there have been growing concerns regarding domestic job loss, the lack of transparency, and similar issues.
All this, and more, we’ll cover in the article below! So keep on reading to get all the latest facts and figures.
Top 10 Outsourcing Statistics for 2020
- The global outsourcing market totaled $131 billion in 2019.
- By the end of 2019, as much as 52% of small businesses were outsourcing some of their processes.
- $289.1 billion is the projected worth of the entire cloud market by 2021.
- The global outsourcing revenue totaled $92.5 billion in 2019.
- In 2015, computing was the sector with the most jobs moving offshore — 472,632 to be exact.
- The Business Process Outsourcing (BPO) Industry grew by a solid 4.4% each year between 2012–2016.
- The global HRO market is projected to reach $45.8 billion come 2027.
- India’s BPO revenue will drop by 9% by the end of 2020, estimates show.
- A total of 14.3 million US jobs were outsourced back in 2015.
- When asked, the majority of respondents (24%) stated efficiency was their main reason behind outsourcing.
Global Outsourcing Statistics
1. The global outsourcing market totaled $131 billion in 2019.
What’s more, the contact center outsourcing market will reach that amount by 2025 alone, which is a huge increase considering that it was worth “merely” $88.62 billion just 2 years ago.
2. By the end of 2019, as much as 52% of small businesses were outsourcing some of their processes.
Likewise, outsourcing industry statistics also show that a whopping 65% of companies that did so planned on increasing the amount of outsourced work for the current year.
In addition, around 89% of businesses said they were satisfied with their outsourcing agents.
3. Robotics is where organizations need help the most when it comes to outsourcing.
More precisely, 53% of respondents stated that they require assistance with automation processes. Moreover, stats on outsourcing indiciate that a staggering 49% of organizations are in need of experts in the digital field.
4. $289.1 billion is the projected worth of the entire cloud market by 2021.
Expanding at an almost exponential rate, one of the largest segments of the IT outsourcing industry is projected to hit a mind-boggling $331.2 billion by 2022.
5. Companies with more than 50 employees are more likely to consider outsourcing.
69% of them, to be exact, whereas merely 29% of businesses with less than 50 employees wish to take part in the outsourcing industry.
6. Nearly 67% of small businesses in the US outsource SEO services.
Likewise, 77% of enterprises use cloud computing services to augment their computing infrastructure; mostly for data storage purposes.
Outsourcing Revenue & Jobs Statistics
7. The global outsourcing revenue totaled $92.5 billion in 2019.
Nevertheless, revenue tends to fluctuate, especially in recent years. According to the latest outsourcing data, 2016 was by far the worst year of the past decade, with an accumulated revenue of “just” $76.9 billion.
8. 2014 holds the record for the largest revenue made outsourcing in a single year — $104.6 billion.
Over the course of two decades, the lowest revenue ever recorded was in 2000, some $45.6 billion in total.
9. Sitting at 37%, accounting is one of the most commonly outsourced jobs.
IT services share first place, whereas digital marketing comes second with 34% (mostly to help out with branding and online merchandising). Development services take third place with 28% and human resources and customer support are tied at 24%.
10. With roughly 63,700 outsourced contracts, IBM holds first place when it comes to most outsourced jobs.
EDS is also one of the biggest outsourcing companies, holding approximately 22,400 outsourcing contracts; DELL follows suit with some 17,450 contracts as well.
Honorary mentions include Cognizant, Siemens, General Electric, Convergys, Accenture, Computer Science Corp (CSC), and Intel, which all have between 10,000 and 15,000 outsourced workers.
11. One-third of small businesses outsourced some of their processes in 2018.
According to a survey of 529 small firms, small business outsourcing statistics are looking good indeed. Namely, there’s a steady increase in the number of outsourced workers each year, with the vast majority of tasks (21%) being related to accounting (as highlighted in our recent credit card stats), IT services (20%), and digital marketing (20%).
12. In 2015, computing was the sector with the most jobs moving offshore — 472,632 to be exact.
When looking at jobs moving overseas, statistics indicate computing was the undisputed ruler with nearly half a million jobs moving offshore. The business sector follows suit with 348,028, management with 288,281, and sales with 226,564 jobs in total.
Conversely, the legal sphere had some of the lowest figures — merely 74,642 — followed by life sciences (36,770), and art and design (29,639).
13. Some 4.3 million part-time employees have a hard time landing full-time positions due to outsourcing.
Apart from this, breaches and project delays are among the biggest drawbacks when the “dark side” of outsourcing statistics is concerned.
Namely, the problem arises when third parties gain access to valuable company info but lack proper communication channels between clients and service providers. The end result — deadlines and schedules get stretched even further.
14. The Business Process Outsourcing (BPO) Industry grew by a solid 4.4% each year between 2012–2016.
What’s more, the latest forecasts estimate that these recent trends in outsourcing will grow by 6% per annum in the next 5 years.
15. The global outsourcing market is expected to reach 332.4 billion by 2025.
According to experts, value and skill will be more important selling points than low service prices. Likewise, responsibilities will be more equally distributed among partners — hence the general appeal of outsourcing.
16. The global HRO market is projected to reach $45.8 billion come 2027.
Based on the available HR outsourcing statistics, experts estimate that this market will have a CAGR of 4.9% between 2020 and 2027.
Within the industry itself, payroll services are expected to reach a total market size of a whopping $21.3 billion, with a CAGR of 4.1%, which is almost half of the total value of the entire sector.
17. India’s BPO revenue will drop by 9% by the end of 2020, estimates show.
When looking at outsourcing to India statistics, figures report that the country’s BPO revenue will drop to $7.9 billion due to the ongoing COVID-19 pandemic.
Nevertheless, experts are confident that the country will recover already the following year with a 2.5% CAGR.
18. With over 150 locations across the globe and over 133,200 employees the telecommunication giant Verizon outsources its call center to the Phillippines.
In fact, Verizon is one of the largest firms on the planet to do this. Honorable mentions include Vodafone, Amazon, Microsoft, Pfizer, etc.
US Outsourcing Statistics
19. A total of 14.3 million US jobs were outsourced back in 2015.
What’s more, this practice of mass outsourcing led to the unemployment of some 5.9 million Americans, and the figures just keep rising with each passing year.
20. The US and the UK are the two countries that outsource the most.
US outsourcing statistics show that a whopping 84.2% of all outsourcing deals originated from the US, whereas the UK came second with merely 5.2%! Apart from that, Australia and Spain were also key players on the outsourcing market.
21. Between March 15 and July 31, 2020, roughly 37,000 workers lost their jobs due to outsourcing in the US.
(The Guardian, CreditDonkey)
When looking at jobs lost to outsourcing, statistics indicate a growing trend over the last couple of years.
As a result of Chinese outsourcing, over half a million (564,000) Californians lost their job between 2001–2013. Texas was the second most-affected state during the same time period with some 304,000 jobs being lost to Chinese outsourcing.
22. According to United States outsourcing statistics, around 300,000 jobs are outsourced each year.
Despite this leaving numerous US citizens without work, companies state that they prefer working with skilled specialists who can get the job done faster, while the rest of the company focuses on core business processes.
23. $132.9 billion is the total revenue of the US BPO Industry in 2020.
According to U.S. outsourcing statistics from 2019, the BPO industry in the US has grown by 1.7% per year, on average, during the 2015–2020 time period.
According to experts, the biggest negative factors that may affect the further growth of the industry are low entry barriers and none-industry assistance.
Outsourcing Facts — Concerns and Benefits
24. 23% of companies stated that cybersecurity issues affected their outsourcing processes.
Merely 14% of respondents said that they have certain cybersecurity measures in place if a breach would occur, while 13% stated that they do not consider cybersecurity issues as risks.
25. When issues do arise, 46% of service providers are reactive rather than proactive.
Also, companies that use outsourcing pointed out that their vendors aren’t innovative enough, 29% stated that they have high employee attrition rates, and 23% mentioned that their staff is unqualified.
26. More than half (59%) of companies see outsourcing as a cost-cutting strategy.
Recent outsourcing cost savings statistics reveal that 47% of firms turn to outsourcing to solve capacity issues. Likewise, 31% of businesses also stated that it helped them improve service quality.
27. When asked, the majority of respondents (24%) stated efficiency was their main reason behind outsourcing.
Moreover, 18% of surveyed firms marked available expertise as their main motivation, 16% pointed out an increase in flexibility, 15% said it provided more free time for employees to focus on other tasks, and 12% reported having more resources available as a result.
Merely 12% of respondents mentioned reduced costs as their main aim.
28. Applying outsourcing trends can help companies save up to 60% in overhead costs.
Furthermore, outsourcing can also help firms focus on core business functions. Namely, a whopping 90% of businesses credited outsourcing as their “main ingredient” for success.
How common is outsourcing?
The practice of outsourcing has managed to gain an incredible amount of ground over the years; and on a global scale too.
For example, in the US, around 68% (two-thirds) of companies that specialize in consumer products outsource some part of their process offshore. Most often, these processes are customer support and/or manufacturing.
How big is the outsourcing industry?
Some sources indicate that the size of the global outsourcing market in 2019 was around $131 billion; others indicate that the total revenue was more around $92.5 billion.
In addition, the Americas enjoy the largest share of the revenue generated from this industry with $62 billion in 2019, and the EMEA (Europe, the Middle East, and Africa) took second place with $56 billion.
Is outsourcing increasing or decreasing?
Outsourcing revenue and market size have been fluctuating over the past few years. For instance, in 2016, the total market size decreased to “just” $76.9 billion, which was the lowest figure of all years this past decade.
Inconstancies could also be observed in the IT industry, where outsourcing budgets dwindled to 9.4% in 2018 from a solid 11.9% in 2017.
Experts state that company size is one of the most decisive factors when it comes to outsourcing decisions. Namely, bigger companies were able to increase their outsourcing in 2019, whereas smaller firms opted for other alternatives.
(Statista, Computer Economics)
What countries outsource the most?
The US and the UK are the two largest outsourcers on the globe, with the US being responsible for a staggering 84.2% of all outsourcing deals made, whereas the UK was only responsible for 5.2%.
Australia and Spain also qualify as key players in the field.
What percentage of American jobs are outsourced?
Getting an exact answer to this question is nigh impossible since monitoring all contracts and other changes within the workforce is incredibly demanding. According to Entrepreneur, on a yearly basis, approximately 300,000 US jobs are being outsourced.
Our infographic shows even larger figures — that same year, a total of 3,320,213 jobs moved offshore.
All in all, outsourcing statistics can help us figure out more cost-efficient ways of doing business, how to improve overall efficiency, and increase business expertise. The data also shows troubling reports, such as growing domestic (US) unemployment rates, less control over key areas for clients, and other possible problems that need to be addressed.
Nevertheless, for now, the outsourcing industry is growing rapidly and only the future knows what’s in store for this budding branch of business.