Ignoring outsourcing could be a big mistake for your business.
From small shops to big companies, many are outsourcing jobs to stay competitive. This includes IT services, app development, and other business tasks. Outsourcing is now a key to success.
This article shares the latest outsourcing statistics and trends, showing how businesses use it to grow, improve, and save money.
Top Outsourcing Statistics (Editor’s Picks)
We’ve handpicked 56+ of the latest statistics, facts, and trends about outsourcing. Here are 6 that we believe will blow you away.
| 1 | $1,138 billion is the predicted global spending on outsourcing by 2025 |
| 2 | 75% of all global outsourcing contracts are for IT services |
| 3 | 92% of G2000 companies outsource their IT tasks |
| 4 | 54% of businesses find their service quality the same after outsourcing |
| 5 | 84.2% of outsourcing deals start in the U.S. |
| 6 | 60% of all manufactured products are outsourced |
Outsourcing Statistics Worldwide
Global spending on outsourcing is predicted to hit $1,138 billion by 2025 (Deloitte)
Breakdowns include $573.6 billion for ITO, $235.5 billion for BPO, and $329.7 billion for shared services, highlighting how integral outsourcing is to modern business strategies and operations.
The global business process outsourcing market is expected to reach $525 billion by 2030 (Grandview Research)
The market is expected to grow by more than 9% annually until 2030. Financial services, IT, and telecommunications are driving this growth. Outsourcing is becoming more important in these areas.
Outsourcing in financial services is valued at more than $130 billion (Fortunly)
As more banks and financial institutions use external services, this market is growing fast, with a 7.5% increase expected annually.
54% of businesses find their service quality the same after outsourcing (Founderjar)
Many companies that outsource say it doesn’t affect their service quality, and for some, it even gets better, indicating that outsourcing can be a good option.
More than 800 firms use the Philippines for call center services (GoRemotely)
This includes well-known companies like Chevron and Citibank. The outsourcing industry there was projected to reach over $50 billion in 2020, up from half that in 2016, with call centers driving much of this growth.
75% of employers find it hard to find suitable candidates for open positions (Manpower Group)
Companies with 1,000 to 4,999 employees face the greatest difficulties, according to a ManpowerGroup survey involving 40,077 employers from 41 countries.
60% of all manufactured products are outsourced (Invedus)
China is an example of one of the most low-cost manufacturing regions where most manufacturing companies, entrepreneurs, and retailers outsource their services.
92% of G2000 companies outsource their IT tasks (ISG)
That’s a lot more compared to the 59% who outsource business processes, showing a clear preference for IT outsourcing among these top companies.
Tech startups outsource more often than non-tech ones (Faster Capital)
About 74% of tech startups use outsourcing, while only 62% of non-tech startups do, showing that tech businesses are more likely to get outside help.
Outsourcing leads to higher growth and better survival chances for startups (Faster Capital)
Those that outsource show a yearly revenue growth of 15%, versus 10% for those that don’t. Also, 65% of outsourcing startups survive for at least five years, more than the 55% of startups that manage all work internally.
Outsourcing Trends
Around 300,000 of American jobs are outsourced annually (Zippia)
While the U.S. saw the creation of 6.4 million new domestic jobs in a recent year, about 4.5% of jobs were outsourced abroad. This indicates that 95.5% of the new jobs benefited Americans directly, while the remaining 4.5% were allocated to overseas labor.
Nike outsources work to over a million people worldwide (Harvard)
They use workers from 42 different countries to make their products, with nearly half of their production in Vietnam and a significant amount in China.
62% of companies want to change their outsourcing contracts (BCG)
Because of fast changes in the market and money problems caused by the pandemic, a lot of companies are looking to renegotiate their deals, as found in a BCG study.
Customer services holds the leading position in the BPO market (Grandview Research)
The growth in this segment came from an expanding need for service centers providing both offline and online technical support globally.
Pharmaceutical companies outsource about 60% of their manufacturing (OptiBPO)
Kate Hammeke of ISR points out that while only one-third of manufacturing is done in-house, the majority is outsourced, showing the industry’s preference for using third-party providers.
68% of outsourcing companies worry about data security when moving to cloud technology (Fortunly)
Along with this, 45% are concerned that cloud services might not be reliable enough, and 35% fear losing control over their intellectual property as they switch to cloud-based solutions.
IBM is the biggest outsourcing company in the world (Insider Monkey)
It’s expected to bring in about $76.5 billion from outsourcing. IBM leads the market by providing services like e-business outsourcing, managing applications, and more.
Outsourcing Statistics by Country
20% of US companies outsource all their IT support to other countries (Go Remotely)
Also, 15% send out all their app development and maintenance, and 10% do the same for their data management. It looks like this trend will continue, with about 9% to 11% of companies planning to outsource more IT work abroad.
Outsourcing Expert Interviews – Outsource Accelerator
Ukraine is a major center for IT outsourcing in Central and Eastern Europe (N-iX)
The country has seen its IT workforce grow to 200,000 professionals and hosts over 1,600 IT outsourcing companies, a number that has doubled over the past five years.
68% of US firms use outsourcing services, with healthcare being a big focus (Finmasters)
IT outsourcing in healthcare is expected to make up $131 billion of the overall $144.8 billion in BPO revenue.
For 60% of US marketers, the pandemic didn’t affect their outsourcing practices (Statista)
Statista’s data shows that just 19.4% of marketing professionals in the U.S. saw any changes in their outsourcing during COVID-19.
59% of American companies choose India for outsourcing (Orient Software)
Compared to other Asian countries like China and the Philippines, India is a stronger leader in outsourcing. This leadership is expected to continue, with India’s IT Outsourcing market set to bring in $10.51 billion in 2024.
The BPO industry in Japan is expected to hit $23.27 billion in revenue (Invedus)
This sector will experience an annual growth of 4.39%, leading to an estimated market size of $28.84 billion by the end of 2029.
84% of outsourcing deals start in the U.S. (Zippia)
This makes the United States the leader in the outsourcing market. The United Kingdom is far behind, contributing just 5.2% to global outsourcing deals, showing how dominant the U.S. is in this area.
The service outsourcing industry in China is worth over $404 billion (Outsource Accelerator)
This growth includes a 17.6% increase in contract value and an 18.6% rise in the value of executed contracts, totaling 1.96 trillion yuan ($272 billion).
Only 25% of companies in the UK have never outsourced (YouGov)
A recent study reveals that while a few companies have never outsourced, most business-to-business decision-makers, about 70%, rely on third parties for crucial tasks.
60% of current finance and accounting outsourcing contracts will likely not be renewed by 2025 (Gartner)
Gartner reports that this is largely because the pricing models are considered outdated, prompting companies to look for better options.
85% of logistics leaders expect to spend more on outsourcing (Gartner)
Gartner reports that more companies have started outsourcing important tasks, with most logistics leaders planning for bigger outsourcing budgets.
Business process outsourcing accounts for 9% of the Philippines’ GDP (Invedus)
The sector is a major economic driver, employing about 1 million locals and generating around $27 billion. The high literacy rate (97%) and low labor costs make the Philippines a favored outsourcing destination.
Companies that outsource to the Philippines can cut labor costs by 70% (OutsourceAccelerator)
Due to its lower cost of living and wage ranges, outsourcing to the Philippines offers significant savings and allows companies to provide a decent wage for local workers. This advantage is rooted in the country’s status as a developing nation in Southeast Asia, which maintains a lower cost of living than neighboring countries.
Software Development Outsourcing Statistics
90% of companies view cloud computing as crucial to their outsourcing strategies (Springer)
The adoption of cloud technology has surged since COVID-19, with many businesses recognizing its importance. However, concerns about data security and other risks remain significant barriers to fully embracing cloud computing.
64% of IT leaders globally outsource their software development (Statista)
This indicates that software development is the most common IT function that businesses prefer to outsource.
60% of organizations turn to outsourcing for app development (back4app)
This trend is driven by the specialized knowledge and high salaries commanded by app developers. Outsourcing rates, however, differ significantly across industries: 72% of financial services organizations outsource this function, while only 31% of healthcare organizations do the same.
Small Business Outsourcing Statistics
27% of small businesses outsource to increase efficiency (Invedus)
As an entrepreneur, attempting to handle all tasks can hinder business growth. Outsourcing functions like professional video editing or content writing to experts allows business owners to focus more on expanding their operations.
Small businesses spend about $198,550 on outsourcing annually (Clutch)
This considerable investment shows that outsourcing is a key component of business operations, not just for occasional tasks.
Many small businesses outsource to get specialized skills (Clutch)
About 18% of them do this to bring in expert help in areas like IT, digital marketing, sales, and accounting, according to a survey by Clutch.
37% of small businesses outsource at least one business process (Clutch)
Additionally, a majority, 52%, expect to increase their use of outsourcing soon, indicating a growing preference for external expertise to support business functions.
Accounting and IT services are the most popular outsourced processes for small businesses (Clutch)
These functions are the most commonly outsourced due to their complexity, freeing up resources for core business operations. Digital marketing follows closely, with 34% of small businesses outsourcing this area.
83% of small businesses plan to keep or increase their BPO budget (Clutch)
Despite challenges and economic uncertainties, including concerns about a potential recession, small business leaders are optimistic about growth and continue to invest in business process outsourcing.
Bigger companies are much more likely to outsource than smaller ones (Time Doctor)
About 66% of companies with more than 50 employees use outsourcing, but only 29% of companies with 50 or fewer employees do the same.
Strong problem-solving skills are the most important factor for small businesses choosing an outsourced team (Upcity)
This skill is valued more than cost or experience, indicating a shift towards solution-oriented service providers.
Cost is the biggest challenge for small businesses looking to outsource (Upcity)
High costs rank as the leading issue, followed by communication problems, affecting outsourcing decisions and practices.
Small companies are more likely to outsource payroll services than large organizations (Statista)
15% of organizations with up to 2,500 employees outsource payroll, versus 8% for those with more than 10,000 employees.
37% of small businesses prioritize outsourcing for accounting and IT services (Clutch)
Close behind are digital marketing at 34%, development at 28%, and HR and customer support each at 24%, highlighting a trend towards outsourcing specialized services.
Outsourcing Cost Savings
Companies can save an average of $87,012 annually by outsourcing.
That’s an 85% reduction compared to hiring onshore, allowing companies to drastically cut operational costs and redirect funds toward expansion and innovation.
IT outsourcing can save you up to $6,474 (approximately 85% savings)
| Country | Average Salary |
| United States | $7,543 |
| India | $324 |
| Philippines | $395 |
| Vietnam | $589 |
| Malaysia | $852 |
| Argentina | $528 |
| Mexico | $1,378 |
| China | $2,499 |
| Poland | $2,285 |
| Brazil | $388 |
| Ukraine | $1,450 |
Companies can cut labor costs by 80% by outsourcing non-core functions (Finmasters)
By outsourcing to lower-cost countries such as the Philippines, where labor expenses are 70% to 90% less, companies can reduce overheads while maintaining decent pay for workers.
32% of companies outsource to save costs (Finmasters)
Other significant reasons include accessing innovative solutions (20%) and enhancing product or service quality (15.4%), reflecting diverse business strategies.
Companies that outsource HR save an average of 27.2% (NAPEO)
These companies benefit financially by delegating responsibilities like hiring, recruiting, and compliance to professional employer organizations.
Most Commonly Outsourced Services
76% of companies outsource IT functions, compared to 52% that outsource business operations (Finmasters)
This data highlights a significant preference for outsourcing technically complex IT tasks over general business activities.
Information technology is the most outsourced industry and business department (Radixweb)
About 37% of IT operations are handled by external services, with companies spending an average of 13.6% of their IT budgets on outsourcing, highlighting its importance for improving operations and cutting costs.
IT services make up 75% of global outsourcing contracts (ISG)
This sector reached $30.4 billion, a 13% increase from the previous year, marking its best year ever. Meanwhile, business services outsourcing fell by 14%, generating $10.3 billion.
64% of companies outsource their legal tasks to external providers (Finmasters)
Taxes at 61% and HR at 57% are also commonly outsourced. These numbers show businesses increasingly look to outside experts for important but complex tasks.
81% of companies outsource their cybersecurity tasks (Finmasters)
This is the top outsourced function in IT, with software development at 79% and infrastructure services at 77%, underscoring the importance of external expertise in managing IT risks and development.
80% of companies do not plan to outsource sales or marketing jobs (Teamstage)
Sales and marketing are among the roles that many organizations prefer to keep in-house. Similarly, strategic planning is another key activity that 89% of businesses choose not to outsource, reflecting a preference to maintain control over critical functions and strategies.
Lead creation and cold calling are the most commonly outsourced operations (Sopro)
This way, they can focus on the main parts of their business while experts find new leads and make those first calls.
Conclusion
Outsourcing is becoming crucial for businesses that want to stay competitive and save money.
For example, 37% of small businesses already outsource to work more efficiently. Global spending on outsourcing is expected to reach $731 billion, showing how important it is becoming. Even more impressive, 92% of the biggest companies in the world outsource their IT tasks, proving it’s a key strategy.
As technology improves and the world becomes more connected, outsourcing will likely grow, helping businesses streamline their operations and come up with new ideas more effectively.
This trend points to a future where outsourcing not only cuts costs but also helps businesses grow by working with outside experts.
FAQ
How much money can a company save by outsourcing?
On average, companies can save about $87,000 a year by outsourcing tasks.
Does outsourcing affect the quality of work?
Most businesses find that the quality of their work stays the same after they outsource, and sometimes it even gets better.
What is the effectiveness of outsourcing?
Outsourcing works really well for many companies. It helps them save money and do things more efficiently by having experts handle certain jobs.
What is the main purpose of outsourcing?
The main purpose of outsourcing is to allow a company to focus on its core activities by having external experts handle other specific tasks. This helps businesses operate more efficiently and can lead to cost savings.
What is the biggest benefit of outsourcing?
The biggest benefit of outsourcing is cost savings. Companies can significantly reduce their expenses by outsourcing tasks to locations where labor is cheaper, or to specialists who can perform tasks more efficiently than in-house staff.
