Outsourcing has been a mark trending since 1989. Across the preceding two decades, it has become an integral part of business managers worldwide.

Regardless of what you think about outsourcing, one thing is sure: in 2021, the vast economy has yet to recover from a global pandemic, and so do some of the world’s biggest industries.

That’s why we think it’s essential to dig into the latest data and pull out all the critical outsourcing statistics for 2021.

Key statistics on outsourcing 

  • Almost 54% of all companies use external support services for customer communications.
  • Globally, companies spent $75.2 billion on security outsourcing last year.
  • There are 59 million employees in the U.S. who use outsourcing.
  • 78% of companies worldwide rate their outsourcing partners positively.
  • About 300,000 employees are outsourced from the United States each year.
  • 71% of executives in the financial services industry outsource or have outsourced some of their services.

| 1. Before the pandemic, the global outsourcing market was worth US$92.5 billion.

Since 2012, global outsourcing revenues have been on an unsustainable trajectory. Revenues peaked at US$104.6 billion in 2014 before falling to US$88.9 billion the following year. Outsourcing statistics for 2021 show that the upward and downward trend in revenue continues, and due to COVID-19, these numbers have yet to stabilize.

| 2. Each year, approximately 300,000 jobs get outsourced from the United States.

These statistics on outsourcing in the United States make it easy to understand why so many people are cynical about outsourcing. Negative sentiment is powerful in the midst of a significant economic crisis; we have just experienced the second-largest recession in history, and the full effects of the global pandemic have yet to manifest fully.

So it’s no surprise that amid the Great Recession, 86% of Americans blamed outsourcing for the deepening crisis.

| 3. Over 93% of organizations are considering or have already implemented cloud services to improve outsourcing.

Moving to the cloud will help companies of all types become more agile and flexible, enabling them to expand their offerings in existing and new markets quickly.

Outsourcing statistics show that a third of organizations are willing to accept increased operational costs if they access the cloud in return. That means that for many companies, the primary motivation for taking this step is not to reduce expenses laying staff but to improve competitiveness and increase innovation.

| 4.Data security is a significant concern for 68% of outsourcing companies considering moving to the cloud.

As cloud technology increasingly changes the outsourcing industry, some of the main challenges companies face are information security and compliance.

However, I.T. outsourcing software development companies point to an additional issue that has to do with performance: 45% of outsourcing companies are concerned that cloud services may not be stable and reliable enough. Some 35% say they are most worried about the loss of intellectual property.

|5. More than 44% of intelligence managers say they are more likely to use external providers now than five years ago.

Recent statistics on offshore operations show that the I.T. industry is moving fastest towards outsourcing providers. About 64% of offshore technology outsourcing functions are related to software development.

Some 51% of technology managers say they outsource application and software maintenance, and 40% outsource their data centers.

|6. The primary motivation for I.T. outsourcing is cost savings.

Realizing up resources to focus on core business is the most commonly cited reason for outsourcing I.T. functions (49%). Saving money is secondary but still significant. Some 45% of companies outsourcing I.T. functions say their I.T. projects are focused on cost savings. Some 46% say outsourcing gives them access to skills they do not have in-house.

|7. 71% of financial services managers have outsourced or transferred some of their services.

Financial institutions are among the companies that outsource the most significant number of services. About 70% of companies in the retail and transport sectors do the same, but according to labor outsourcing statistics, the top performers are pharmaceutical companies, about 82% outsourcing services.

 8 | 83% of companies and financial institutions are introducing or considering process automation.

As outsourcing statistics such as this one show, there is a growing trend towards automation. Robotic automation is often the first step towards digitization for companies, and most financial institutions are already using it.

Moreover, 81% of financial institutions are satisfied with robots, meaning that further growth is almost guaranteed. This trend is currently most pronounced in H.R. and invoice processing, where bots are increasingly replacing humans.

9 | COVID-19 epidemic, the proportion of the budget allocated by I.T. departments to outsourcing continues to rise, from 12.7% in 2019 to 13.6% in 2020.

A year-by-year comparison of outsourcing statistics reveals some interesting and growing differences between large and small companies that outsource.

Three years ago, the largest decline in outsourcing was I.T. security and data center operations, down 6% on the previous year. This decline is large because SMEs have embraced cloud technology and no longer need to outsource the maintenance of their own

Recent studies have shown that pandemics and the move to telecommuting models have not harmed global I.T. outsourcing. On the contrary, outsourcing spending increased to 13.6% 

of the average I.T. budget in 2020.

THE global I.T. outsourcing business is forecast to grow at a CAGR of 5% from 2020 to 2024, reaching $98 billion.

Since 2001, more than 560,000 Californians have lost their jobs to China.

California leads the nation in the number of jobs lost to outsourcing, primarily due to Silicon Valley’s contraction and the state’s apparel industry.

A quick look at jobs lost by industry shows why California, home to some of America’s largest companies, has been hit hard. Of the 3.7 million jobs the U.S. had lost since 2001 when China joined the WTO, 1.3 million were in information technology and electronics manufacturing.

11 | The global market for Financial Services Outsourcing get estimated at more than $130 billion.

According to U.S. outsourcing statistics, the financial services outsourcing market will continue to grow at an annual rate of nearly 7.5%. Large banks and other financial institutions expect to use outsourcing service providers increasingly.

The most potentially damaging outsourced functions are data management and core business processes.

The business process outsourcing (BPO) market includes banking, financial services, insurance, healthcare, manufacturing, I.T.

12 | 2 years ago, the global customer outsourcing market estimates at USD 75.1 billion.

According to annual outsourcing statistics, customer service is one of the most outsourced processes among large corporations and financial institutions. Given that most companies consider improving customer service as one of their top priorities, it is no surprise that the market will continue to grow until 2020.

By 2023, the market value expects to grow to US$81.5 billion.

13 | Accounting and information technology are the most common types of outsourcing for SMEs.

SMEs tend to outsource accounting and I.T. because they need skills and capabilities they may not have in-house. For example, statistics on SME outsourcing show that 37% of all accounting and I.T. tasks outsourced. Digital marketing tasks are outsourced at 34%, followed by development and human resources at 28%.

14 | 24% of SMEs outsource to increase efficiency.

Efficiency is the primary concern of small business owners. Compared to larger companies, these businesses typically cannot afford or access the resources needed to build a team from the ground up.

According to the U.S. Outsourcing Statistics, another common reason (18%) that small businesses turn to outsource is to improve their existing skills and seek professional help. The latest survey also shows that 52% of SMEs will continue to outsource most non-core functions in the post-COVID 19 economies.

15 | 29% of firms with fewer than 50 employees outsource functions, compared to 66% of firms with 50 or more employees.

Smaller firms spend less on outsourcing than global providers because they generally prefer to save money and do it themselves. When it comes to outsourcing, small companies tend to rely on freelancers.

Overview

While the U.S. government focused on bringing manufacturing and other outsourced industries back to the U.S., overall global trade policy remains in flux. Tariffs, quotas, and geopolitical factors will ensure that outsourcing will continue to increase for years to come.

The outsourcing statistics we collect show a clear divide between SMEs and larger companies as new technologies such as the cloud and robotic automation continue to transform the market.

Outsourcing software development companies will continue to grow, but the outsourced functions and the companies that rely on outsourcing may change. Typically, they will carry out work in-house, but critical areas such as software development and maintenance will continue to outsource.