Outsourcing is a popular business practice that helps improve the efficiency of various organizations, allowing employees to focus on core business functions and help cut costs simultaneously.
Today, Outsourcing has become a global industry with businesses of all industries and sizes utilizing outsourcing services to enhance their businesses. The outsourcing spending worldwide was predicted to be $731 billion in 2023. In this article, we will look at the Top Outsourcing statistics (2024-2027) along with the global market, revenue, latest trends, and more.
Top Outsourcing Statistics (2024-2027)
- In 2023, the global outsourcing spending was predicted to reach $731 billion.
- The Global revenue of the IT outsourcing industry is projected to reach a milestone of 777.74 billion in 2028.
- More than 1 million employees in China join the outsourcing service industry every year.
- By 2027, the business process outsourcing (BPO) market will be valued at more than $400 billion.
- More than 6,600 outsourcing firms operate in China.
Global Outsourcing Market Statistics
The outsourcing market worldwide is ruled by two sub-industries: Business process outsourcing (BPO) and IT Outsourcing (ITO). The IT Outsourcing industry includes multiple services such as web hosting, cloud computing, data backups, and cybersecurity. On the other hand, business process outsourcing (BPO) includes many functions like customer service and logistics, marketing services, payroll, and various other Human resources services.
The Global spending of businesses on outsourcing was predicted to reach $731 billion in 2023
According to Deloitte, the amount spent by businesses on outsourcing was expected to reach a peak of $731 billion in 2023. In 2022, businesses spent around $700 billion on outsourcing and were expected to witness a rise of 31 billion in 2023. In addition, IT outsourcing spending was also predicted to make $519 billion in 2023 and witness a rise of 22% from 2019. In 2023, BPO (Business process outsourcing) was forecasted at $212 billion, which witnessed a 19% rise from 2019.
Business Process Outsourcing (BPO) is projected to reach over $400 billion by 2027
Many industries such as E-commerce, Healthcare, Tech, and others depend on Business Process Outsourcing (BPOs) to perform internal processes. Most BPO activities are in-house functions such as front office and human resources requirements. Around 59% of big and small businesses slowly utilize outsourcing services as a cost-cutting tool. This results in massive growth for the BPO industry year after year and is projected to reach a milestone of $400 billion by 2027.
The business process outsourcing market worldwide is projected to be worth $525 billion by 2030
The Business process outsourcing market is expected to rise 9% every year from now to 2030 and is projected to be worth $525 billion in 2030. The areas in the BPO industry expected to witness the highest growth are IT, telecommunications, and financial services.
Revenue of the IT outsourcing industry worldwide 2019-2028
The global revenue in the IT services market’s ‘IT Outsourcing’ segment is expected to reach 512.47 by the end of 2024. Also, the IT outsourcing industry is expected to witness significant growth in its revenue and reach a milestone of 777.74 billion U.S. dollars by 2028
Here is a breakdown of the revenue generated by the IT outsourcing industry worldwide from 2019 to 2028:
| Year | Revenue (in billion) |
| 2019 | 324.3 |
| 2020 | 320.8 |
| 2021 | 360.59 |
| 2022 | 411.66 |
| 2023 | 460.05 |
| 2024 | 512.47 |
| 2025 | 574.4 |
| 2026 | 641.62 |
| 2027 | 709.3 |
| 2028 | 777.74 |
Around 60% of the accounting and finance outsourcing contracts aren’t be renewed by 2025
According to Gartner, Finance, and Accounting (F&A), organizations will likely not renew 60% of existing business process outsourcing (BPO) contracts by 2025 due to outdated pricing models that don’t drive process improvement and digitalization. Outsourced processes are becoming increasingly automated while traditional “headcount-based” pricing models are becoming expensive.
Over 6,600 outsourcing companies are operating in China
China is playing an emerging role in global outsourcing by improving its quality and becoming one of the top players worldwide in outsourcing. In recent years, central and local authorities have showcased excellent determination towards promoting information technology (IT) and other business services industries in the country, along with launching great initiatives to enhance education, training, and supporting infrastructure, which has resulted in China building an impressive outsourcing industry.
A large number of firms are adopting cloud services to enhance IT outsourcing
Over 55% of the shares in the outsourcing industry belong to IT outsourcing. Various functionalities such as web design and hosting, help desk, data entry, application development, and tech support have involved outsourcing. Today, over wide % of businesses are implementing cloud delivery by over 50% by IT outsourced teams and freelancers.
In today’s digital world, more and more companies are utilizing cloud computing to bring considerable changes to their businesses. It includes a network of servers that can be hosted remotely on the internet which can easily store, manage, and process the business’s data. One of the prominent reasons companies are adopting this technology is to cut losses in the cost spent on hardware and other expenses required for operating a data center.
Over 94% of companies utilize some sort of IT Outsourcing
Outsourcing IT-related business processes is an excellent strategic method to manage various tasks that are initially handled by internal staff. Some of the IT companies are also investing in outsourcing services such as application servers, T-reliant business processes, and infrastructure solutions.
According to Statista, the IT market was over $120 billion in 2019, with the IT outsourcing market valued at $92.5 billion. By the end of 2021, the numbers reached $413 billion, of which 70% came from outsourcing.
Small Businesses Outsourcing Statistics
Gradually, small businesses are accessing outsourcing services to enhance efficiency and productivity. One of the top reasons behind small business outsourcing is to gain access to various specialized skills. Below, we have mentioned some of the top small business outsourcing statistics to give a clear picture regarding the impact of outsourcing on small businesses:
More than 1 in 3 small businesses outsource one business process
In 2019, over 1 in 3 small businesses (37%) utilized at least one business process to enhance efficiency and utilize employees’ time for various other tasks. In addition, it was also reported that about 52% of companies were planning on outsourcing a minimum of one business process in the future.
IT services and Accounting are the leading outsourced processes for small businesses
Around 37% of small businesses are outsourcing IT services and accounting. At the same time, other common outsourced processes include digital marketing (34%), Human resources another common choice (24%), and customer service (24%).
| Outsourcing processes | Percentage utilized by small businesses |
| IT Services and Accounting | 37% |
| Digital Marketing | 34% |
| Human Resources | 24% |
| Customer Service | 24% |
Small businesses are more likely to outsource payroll services in comparison to large businesses
According to Statista, small businesses are more likely to outsource their payroll function compared to large businesses with about 15% of the respondents companies with less than 2,500 employees reporting they outsource their payroll in a global survey conducted in 2019. Large organizations with over 10,000 employees are likely to outsource their payroll by only 8%.
Top challenges faced by small businesses looking to outsource
According to a survey conducted by Upcity in 2022, it was revealed that one of the most common reasons behind small businesses not utilizing outsourcing is due to high costs by 23%. The second most common challenge respondents face is difficulty in communication by 21%. Some other concerns respondents raised are the inability to meet deadlines, inability to follow instructions, lack of confidentiality, low-quality work, and more.
Here is a breakdown of some of the top reasons why small businesses are not considering outsourcing services:
| Challenges | Percentage |
| High cost | 23% |
| Difficult to communicate | 21% |
| Failed to meet deadlines | 14% |
| Didn’t follow instructions | 12% |
| Lack of confidentiality | 9% |
| Low quality work/service | 9% |
| Data breach | 8% |
| Other | 5% |
Latest Trends and Growth in the Outsourcing Industry
There have been massive changes that took place in the growth and trends in outsourcing that have transformed the business landscape over the years.
1. Recruiting Skilled Talent
In 2022, a survey reported that 75% of employers in the United States struggled with finding suitable candidates. Many people reported the need for more individuals with advanced skills in the new technology. Outsourcing services have played a significant role in various companies by saving time from long recruitment processes and allowing them to acquire access to proficiency that they lack in-house.
2. Increased utilization of Modern Technology
Technological advancement has played a major role in transforming the outsourcing industry. Artificial intelligence, Automation, and cloud computing have enhanced productivity and expanded partnership opportunities between clients and service providers.
3. Rise in Remote Employment
One of the most notable and beneficial changes brought by outsourcing services is the rise of remote employment. The 2020 global COVID-19 pandemic played a crucial role in changing corporate life worldwide by bringing “Work from home” or “Hybrid mode” employment, a new approach allowing users to complete their tasks and projects while working from home. In 2023, a survey by Pew revealed that 35% of workers in the United States were working from home. It witnessed a decline from January 2022 data, which reported 46% of users were employed remotely. However, most companies prefer remote work.
4. Data Security
Another great impact lead in the outsourcing service is data security. These days, offshore companies are taking essential measures to secure the privacy of their data and ensure compliance with important protocols. This way, organizations can gain the trust of their clients and provide a safe and secure environment for all users.
Conclusion
The statistics mentioned above indicate a promising future for outsourcing, as it’s projected to be an excellent strategic solution for businesses in various industries, offering efficiency, increased flexibility, and reduced operational costs. Overall, the future for the IT outsourcing industry looks bright, with a variety of opportunities along with the revenue of IT outsourcing projected to reach 777.74 billion in 2028. The BPO industry is also expected to witness excellent growth and reach $400 billion by 2027 by playing a significant role in various fields such as E-commerce, Healthcare, Tech, and more.
