As our latest outsourcing statistics will reveal, an increasing number of organizations worldwide are looking to outsource some of their essential and non-essential business functions to third-party businesses to streamline workflow and save on costs. Today outsourcing has become a way of life for many small businesses and large firms.
In this article, you will find out all there is to outsourcing, including the many benefits of outsourcing, the top countries in terms of outsourced jobs, the market value of this growing industry, the coronavirus impact, and much more.
But first, be sure to check this list of most intriguing facts on outsourcing:
Top 10 Outsourcing Statistics for 2022
- Around 300,000 jobs are outsourced by the US annually.
- The top reason for outsourcing (70%) is cost reduction.
- The total IT budget in 2020 grew from 12.7% in 2019 to 13.6%.
- 58.8% of US marketers saw no covid-related changes in the outsourcing marketing activities.
- Larger companies are 66% more likely to outsource than small businesses.
- 36% of workers in the US are part of the “gig economy.”
- The global outsourcing market was worth $92.5 billion in 2019.
- By 2025, the global IT outsourcing market will be worth $397.6 billion.
- 83% of IT leaders are planning to outsource their security to an MSP in 2021.
- 24% of small businesses outsource to increase the efficiency of their business.
General Outsourcing Facts and Stats
The definition of outsourcing is hiring a person who doesn’t work in your company to perform your company’s services. Most companies use outsourcing to reduce costs. Outsourcing can link to various job positions, from IT to customer support.
This business strategy was first recognized in 1989.
1. 64% of leading companies have chosen RPA (robotic process automation) as a digital enabler.
(Deloitte)
The world-renowned Cloud is just some 4% ahead, with 68% of the leading industries employing Cloud as one of their digital enablers.
Deloitte outsourcing statistics also report that there is no concern over the performance, as it was the case in 2018 when 50% of the surveyed expressed their qualms. However, nowadays the biggest concern revolves around remaining competitive and whether one should go for one digital provider or more.
2. Owing to the pandemic, 48% of businesses worldwide will increase RPA adoption by 5% or more.
(Businesswire) (UiPath)
The post-pandemic challenges will most likely be dealt with through automation, judging by outsourcing statistics. That said, 57% of employers claim that their employees are pretty anxious about these workplace changes. Many of them are afraid they won’t be able to succeed with their work due to automation and stress caused by the pandemic.
75% of the companies are using RPA in order to support the remote workforce.
3. Around 300,000 jobs are outsourced by the US annually.
(Aptude)
When it comes to the United States outsourcing statistics, a large number of jobs are being sent overseas, leaving hard-working Americans without employment.
4. India’s IT outsourcing industry will witness a CAGR growth of 7.25% by 2025, reaching INR 8,830 billion ($121,335,149.20).
(Outsource Accelerator) (Classic Informatics)
India is the leading IT outsourcing country in the world. Why India? There are many reasons. For example, India has no communication barriers since it’s one of the largest English-speaking countries. Furthermore, outsourcing is far cheaper compared to other developed countries.
In the same fashion, Indian outsourcing industry statistics imply that by 2023/2024, the country will have the highest number of software developers. India might even overtake the US in this matter.
5. IBM is the largest outsourcing company in the world.
(Insider Monkey)
IBM has a revenue of $76.5 billion and a market cap of $105.66 billion. In addition to that, based on the outsourcing jobs facts, there are 383,800 people working for this multinational technology giant based in New York.
The silver medal belongs to Deloitte, a company with a revenue of $47.6 billion. Accenture, a company from Ireland, comes third with $44.7 billion in revenue.
6. The top reason for outsourcing (70%) is cost reduction.
(Deloitte)
The second reason is flexibility (40%). Speed to market is important to 20% of businesses. Access to tools and processes and agility matter to 15% of the surveyed, according to Deloitte’s outsourcing statistics graphs.
7. 14.4 million is the number of workers US overseas affiliates hired in 2018.
(The Balance)
The said companies employed people in various sectors, spanning from technology and call centers to human resources and manufacturing.
8. By the end of 2021, the overall value of outsourced IT services will surpass $413.72 billion.
(Daxx) (Statista)
The total IT budget in 2020 grew from 12.7% in 2019 to 13.6%. In 2020, middle-sized tech companies were responsible for the largest IT outsourcing industry growth.
Despite the pandemic, some tech businesses even decided to increase their IT budgets, outsourcing statistics from 2020 show. Others collaborated with their offshore and nearshore IT outsourcing partners.
9. 58% of companies started adopting Artificial Intelligence.
(Deloitte)
AI is a new rising trend that became accepted by many companies. Based on one survey, 29.4 of workers are expected to undergo additional training as a consequence of intelligent automation implementation.
On that note, companies that already use RPA are more likely to accept AI adoption.
10. 58.8% of US marketers saw no covid-related changes in the outsourcing marketing activities.
(Statista)
U.S. outsourcing statistics from 2020 show only 19.4% of marketers observed a change in the outsourcing marketing activities during the pandemic.
11. 36% of workers in the US are part of the “gig economy.”
(Gallup)
The gig economy is made up of freelancers and people who take short-term contracts in exchange for payment, which also includes freelancers operating in the outsourcing sector.
Freelance statistics show they are very satisfied with the income. In a like manner, the highest paying gig economy job in 2020 was massage therapy. Their average hourly rate was $27.84.
Outsourcing Facts and Figures — Market Value and Cybersecurity
How much is the outsourcing market worth, and what’s the role of cybersecurity?
12. The global outsourcing market was worth $92.5 billion in 2019.
(Statista) (Statista)
Americans had the largest revenue share. As the US outsourcing statistics from 2019 report, its outsourcing market was worth $62 billion. Europe, the Middle East, and Africa were close behind, while the Asian Pacific region had the smallest global revenue share.
13. $66.5 billion was the global revenue of IT outsourcing in 2019.
(Statista)
But wait, there’s more!
Another $26 billion in global revenue was generated by BPO (business process outsourcing) the same year, according to outsourcing statistics from 2019.
14. By 2026, the global IT outsourcing market will be worth $425.19 billion.
(Statista) (GlobeNewswire)
It’s expected that it will register a CAGR of 4.5% between 2021 and 2026. When it comes to market shares, India will be one of the leading countries.
Its IT-BPM already helped with the country’s socio-economic growth. What’s more, many leaders in India, political and business, find it to be the country’s future. On that note, Bengaluru is proclaimed as the best city for an IT professional in India.
Plus, India’s IT outsourcing market is expected to be worth INR 8,830.14 billion ($120.67 billion) by 2025.
15. 65% of CISOs outsourced 21%–30% of their cyber operations, outsourcing statistics report.
(Deloitte)
Most of the small and mid-sized businesses don’t have big budgets for cybersecurity. This is where outsourcing comes in handy. About 14% of companies report outsourcing over 50% of their cybersecurity operations.
16. 83% of IT leaders plan to outsource their security to an MSP (manage service provider) in 2021.
(Security Magazine)
The main reason for this move comes as a result of COVID19. Namely, in 2020, 89% of the surveyed industries had to speed up the digital transformation. Naturally, this led to stretching the existing resources and increased exposure to cyber attacks.
Many companies had cyber challenges, so it’s only logical that these outsourcing trends from 2020 will continue in 2021.
17. The MSP market is to reach $41 billion by 2022 due to outsourcing security functions.
(Infosec)
Security operations are the most important cybersecurity services that should be outsourced. Since companies need 24/7 monitoring, the most important outsourcing service is having a security team that will protect all the important data (website, communication channels, database). Equally important is creating the security strategy and security architecture.
However, if you want to have more control over the decisions, hiring a consultant is a better option than hiring an outsourcer.
Small Business Outsourcing Statistics
How important is outsourcing to small businesses, and should they hire outsourcers?
18. Larger companies are 66% more likely to outsource than small businesses (merely 29% of them outsource).
(Time Doctor)
Exactly why this is so isn’t clear. Yet, it could be that smaller companies (fewer than 50 employees) don’t have the financial means to invest in outsourcing services, unlike bigger companies that have more financial resources at their disposal.
19. Around 37% of small businesses use outsourcing to handle at least one of their business processes, the latest offshoring statistics indicate.
(Clutch)
This could be anything from IT and HR operations to customer service and data protection.
For instance, accounting and IT services make up 37% of all outsourced jobs, whereas digital marketing makes up another 34%.
20. 24% of small businesses outsource to increase the efficiency of their business.
(Clutch)
Another 18% do so to get expert assistance; 16% do it to be more flexible; lastly, according to outsourcing statistics, 15% do it to give more free time to their employees.
21. The top three ways outsourcing can help small businesses are — generating profit, growing revenue, and improving cash flow.
(Neil Patel)
In essence, the top five challenges small businesses face are hiring new employees (50%), increasing profit (46%), employee healthcare (44%), growing revenue (39%), and managing cash flow (34%).
Generally, by outsourcing, you hit two birds with one stone. How? Outsourcing eliminates the need for hiring employees and buying employee healthcare while still providing a solid boost to those mentioned above.
Outsourcing Statistics by Industry
Which industry has the most success with outsourcing?
22. Accounting is the most outsourced industry sector.
(Clutch)
37% of small businesses outsource accounting and finance. The same percent of businesses outsource IT, while 34% use outsourcing for digital marketing.
23. 24.5% of all organizations are going to increase outsourcing efforts or outsource for the first time in 2021.
(N-ix)
Companies that have between 10,001 and 50,001 workers are most aware of how vital outsourcing is. 61.1% of the big companies are ready for the said investment.
51.6% of businesses with 1,000—10,000 employees are going to do the same.
24. Statistics on outsourcing show 70% of the IT industry market worth will originate from outsourcing by the end of 2021.
(Orient)
Based on the estimations, the IT industry will be worth $413 billion by the end of this year. And guess what? 70% of the mentioned money will come from outsourcing.
Technology is constantly evolving, so companies need to make sure to follow the trend. Over 94% of organizations using IT outsourcing make due improvements by using cloud services.
25. HR consulting is the most common service among HR outsourcing organizations.
(ExtensisHR)
HR outsourcing statistics imply that HR consulting is the most common service among HR outsourcing organizations (45%).
The second most common service is benefits administration (36%), followed by time tracking (24%) and insurance services (19%). Only 10% of services are associated with performance management.
26. 70%–80% of the finished manufactured products are outsourced.
(Orient)
To cut down the costs of labor, numerous manufacturing companies turn to outsource. Based on the outsourcing cost savings statistics, China is the most popular country for manufacturing outsourcing since the labor cost is cheaper.
In other words, the minimum wage is $162–$358 per month, which means that companies can save 30%–80%. Yet, this is rather higher than in India, where monthly wages vary from $66 to $202.
27. When it comes to the banking industry, 40% of help desk positions are outsourced.
(Orient)
Help desk specialists maintain the relationship between the company and the customer. They also help customers with questions and technical support. On top of that, 85% of customers are willing to pay more money to receive an improved help desk experience.
FAQs
How common is outsourcing?
(Outsource Accelerator) (Clutch)
Outsourcing is incredibly common. Over one-third of small businesses use outsourcing to help them become more efficient, increase their skill, and give their employees more free time.
In fact, many companies (small and big) use outsourcing to reduce their costs and have more flexibility. India is the leading country globally when it comes to IT outsourcing, followed by the Philippines and the US.
What percentage of US companies outsource?
(Outsource Accelerator)
68% of US companies outsource to low-cost countries. The most outsourced services are accounting, IT service, digital marketing, development, human resources, and customer support.
The biggest US outsourcing company is IBM which currently has 383,800 employees, a revenue of $76.5 billion, and $153.4 billion in assets. Deloitte holds second place, with a $47.6 billion revenue and 330,000 employees.
What percentage of American jobs are outsourced?
(Aptude)
While there is no definitive answer — keeping track of outsourcing contracts at any moment is incredibly difficult. What we do know, however, is that each year around 300,000 jobs are being sent overseas.
In other words, that’s a huge chunk of US jobs being handed over to other countries.
Which countries outsource the most?
(Outsource Accelerator)
The US is the leading outsourcing country as it made 84.2% of outsourcing deals in 2017. The UK and Australia take second place on the leading outsourcing markets list.
In terms of the top countries where work is being outsourced, we have India with its IT specialists. Next, the Philippines, which specializes in customer service roles.
Ukraine and Poland are also becoming popular, especially in the IT sector. On the other hand, China is the most popular country for manufacturing outsourcing.
How much has outsourcing increased?
(Statista)
Quite a bit. In 2015, it sat at $88.9 billion, only to drop to $76.9 billion in 2016. In 2017, it climbed back to $88.9 billion, then dropped to $85.6 billion in 2018 before rising to $92.5 billion in 2019.
The market statistics show it fluctuated quite frequently over the past five years.
Is outsourcing increasing or decreasing?
(Deloitte)
Due to the pandemic, the outsourcing industry is expected to increase.
First of all, since companies started to incorporate a remote working model, people have become more comfortable with virtual meetings, interviews, and hiring.
Secondly, the companies are trying to preserve their money due to the economic crisis, leading them to turn towards outsourcing.
And lastly, outsourcing is still one of the essential tools for client organizations and strategies.
How big is the outsourcing industry?
(Outsource Accelerator)
The global outsourcing industry was worth $92.5 billion in 2019. The reports show us that we can expect it to reach $114 billion by 2025.
Therefore, the outsourcing industry is pretty big. In fact, along with the oil and gas, the outsourcing industry is one of the biggest benefactors to the global economy.
Conclusion
By now you should have a much better understanding of why companies outsource.
Whether they be budding startups or large corporations, the target goals are the same — cutting costs, working on core business functions, getting expert help, and so on.
Hopefully, our outsourcing statistics, as well as our general overview of global outsourcing companies, satiated your curiosity and gave you more insight into how the outsourcing market works.
Sources:
FAQs
What percentage of companies are outsourcing? ›
What percentage of U.S. companies outsource? 66% of U.S. companies with 50 or more employees outsource, while 29% of U.S. companies with fewer than 50 employees outsource. Furthermore, 68% of large U.S. consumer products involve outsourcing in at least one department of their organization.
Which country outsources the most? ›The US has the most percentage of outsourced jobs in the world, with almost 68% of companies delegating their services. The UK, meanwhile, has around 48% of companies offshoring business functions with talent shortage as the main factor.
Which company outsources the most? ›| 1. Google | Multinational technology company |
|---|---|
| 2. Facebook | Social media conglomerate |
| 3. Unitedhealth Group | American managed health care company |
| 4. Wells Fargo | Financial services firm |
| 5. Nike | Footwear manufacturing company |
Among other problems of outsourcing, you might face difficulty looking for a vendor of the right size. A small outsourcing company will leave you no room for growth as it will not easily scale up or down. An enterprise-sized outsourcing firm might take a less personal approach and charge you too much for your project.
What are the recent trends in outsourcing? ›The outsourcing industry has shown an increased demand for cloud-based technology. Predictions show this trend will carry on this 2022, as the BPO sector continues to derive advantages from technology use. Outsourcing companies that use cloud-based applications are at an advantage.
Did you know facts about outsourcing? ›Twenty-four percent of small businesses outsource to increase the efficiency of their business. Another 18% do so to get expert assistance; 16% do it to be more flexible; lastly, according to outsourcing statistics, 15% do it to cut and streamline workflow. Around 300,000 jobs are outsourced by the US annually.
Who is the largest BPO? ›1. Accenture. Accenture is a cutting-edge IT company as well as a BPO offering a talented workforce. They have a presence in over 120 countries and employ more than 500,000 people globally.
What are the benefits of outsourcing? ›- lower costs (due to economies of scale or lower labor rates)
- increased efficiency.
- variable capacity.
- increased focus on strategy/core competencies.
- access to skills or resources.
- increased flexibility to meet changing business and commercial conditions.
- accelerated time to market.
The Bottom LineThe short term gain derived by companies that outsource operations offshore is eclipsed by the long term damage to the U.S. economy. Over time, the loss of jobs and expertise will make innovation in the U.S. difficult, while, at the same time, building the brain trust of other countries.
Which company is known as the king of outsourcing? ›Wipro Limited (NYSE: WIT)
Wipro Limited, also known as Western India Products Limited, is an Indian IT outsourcing company founded by Mohamed Hashem Premji in 1945.
What are the Top 5 reasons companies use outsourcing? ›
- Cost Savings. “Cost savings is the main advantage that outsourcing brings in. ...
- Scale Quickly. ...
- Network Security. ...
- Focus on Growth. ...
- Remain Competitive. ...
- Grow Business. ...
- Delegate Tangential Processes.
Business process outsourcing is the most common type of outsourcing. It refers to contracting any business process to a third-party service provider. This type usually deals with repetitive tasks such as customer support and administrative roles.
What are the two most frequent causes of outsourcing problems? ›The two most frequent causes of outsourcing problems include: poor service definition and cost over-runs.
What are the benefits and risks of outsourcing? ›- Advantages Of Outsourcing. ...
- You Don't Have To Hire More Employees. ...
- Access To A Larger Talent Pool. ...
- Lower Labor Cost. ...
- Cons Of Outsourcing. ...
- Lack Of Control. ...
- Communication Issues. ...
- Problems With Quality.
Some critics of outsourcing say that it leads to a general slippage in the labor and environmental standards that apply to the goods and services Americans consume. This is a critique that's often cited by opponents of NAFTA.
Is outsourcing a growing trend? ›Key to global market
The popularity of outsourcing is growing since it provides access to wider global markets. Smaller companies, thanks to delegating tasks, have a possibility to scale their business faster.
Global outsourcing is a term reserved for outsourcing to a third party based outside of your country and is often commonly referred to as offshoring.
What are the hottest markets in outsourcing? ›- Information Technology (IT) According to Statista, the IT outsourcing industry is growing at a CAGR of 8.93% and will be worth a market volume of $551,956.3 million by 2026. ...
- Administrative. ...
- Business Process Outsourcing (BPO)
Some common outsourcing activities include: human resource management, facilities management, supply chain management, accounting, customer support and service, marketing, computer aided design, research, design, content writing, engineering, diagnostic services, and legal documentation.”
How common is outsourcing? ›There are 59 million freelance workers in the US. 78% of businesses all over the world feel positive about their outsourcing partners. About 300,000 jobs get outsourced out of the US each year. 71% of financial service executives outsource or offshore some of their services.
How much has outsourcing increased? ›
Global spending on outsourcing could hit $731 billion in 2023 (Deloitte) Overall, businesses are expected to spend over $700 billion per year on outsourcing by 2022. Breaking this down by segment, IT outsourcing spending is projected to reach $519 billion in 2023 — a 22% increase over 2019's numbers.
What are the 4 BPO services? ›- Front-Office BPO.
- Back-Office BPO.
- Offshore BPO.
- Nearshore BPO.
- Onshore/Domestic BPO.
- Genpact.
- Tata Consultancy Services.
- WNS Global Services Private Ltd.
- EXL Service.
- Wipro BPO.
- Firstsource Solutions Ltd.
- Infosys BPO.
- Aditya Birla Minacs Worldwide Ltd.
- service delivery - which may fall behind time or below expectation.
- confidentiality and security - which may be at risk.
- lack of flexibility - contract could prove too rigid to accommodate change.
- management difficulties - changes at the outsourcing company could lead to friction.
...
What is another word for outsourcing?
| sourcing | deploying |
|---|---|
| redistributing | subcontracting |
| utilisingUK | utilizingUS |
Outsourcing is when an organization contracts a non-affiliated business to complete work for their business. Outsourcing is primarily done when an organization requires specific skills or specialized machinery to complete some action or product that is not central to the core of the organization.
Who loses from outsourcing? ›Outsourcing Can Eliminate Jobs From the Domestic Workforce
Presumably, those workers who lose those jobs go on to get better jobs in new industries or through better training and education. Manufacturing jobs are a prime example.
In turn, those same countries are able to become bigger players in the global market and are able to buy more exports from the countries that outsourced to them. Simply put, outsourcing plays a beneficial and cyclical role in the world economy.
What is a negative impact of outsourcing? ›Outsourcing has caused high unemployment, loss of income and loss of competitive advantage, leaving people without financial support and employment.
What is outsourcing in simple words? ›Outsourcing is a business practice in which a company hires a third-party to perform tasks, handle operations or provide services for the company.
Does Apple use outsourcing? ›
Apple has hundreds of such suppliers willing to abide by the terms Apple sets forth. What's more, by outsourcing its supply-chain and assembly operations, Apple can do what it does best—concentrate on designing great products that offer rich functionality and are easy-to-use.
Is Accenture a BPO or IT? ›Accenture offers clients a value-driven approach to BPO, which means that we provide services well beyond lowering costs. We inject innovative, market-shaping industry insights that elevate our clients' performance.
What is the best situation to outsource? ›A Company Should Outsource When You Need to Focus on Your Business-Critical. Adding people to your team to do skills not part of your core business can be daunting, time-consuming and expensive, not to mention limiting to your business growth.
How does outsourcing help a business grow? ›Outsourcing can be the key to growth and scalability for small to enterprise businesses. BPO centers can help business leaders minimize costs and maximize productivity by adopting a partnership attitude. Outsourcing also frees up your leaders time to focus their efforts on what they do best: the core of the business.
Will outsourcing importance grow in the future? ›Our penultimate prediction for outsourcing in 2022 is another trend that will become popular as a way to mitigate a talent deficit: gig work. The gig economy was growing before the pandemic, continued growing during the pandemic, and will continue to grow even further in 2022.
What are the 4 types of outsourcing? ›- Professional outsourcing.
- IT outsourcing.
- Manufacturing outsourcing.
- Project outsourcing.
- Process outsourcing.
- Operational outsourcing.
The Two Most-Popular Types of Outsourcing in Software Development. IT Staff Augmentation and Dedicated Teams are the two types of outsourcing that have revolutionized software development.
How can outsourcing be avoided? ›- Avoid Outsourcing Issues: Don't be Cheap.
- Avoid Outsourcing Issues: Focus on the Interview.
- Avoid Outsourcing Issues: Clear Communication Expectations.
- Avoid Outsourcing Issues: Onboard Remote Freelancers.
- Avoid Outsourcing Issues: Listen and Accept Feedback.
- Conclusion.
The Solution: The easiest method to tackle this difficulty in software development outsourcing is to clarify how much control the outsourcing company's workers have over the project in the outsourcing contract. What kinds of decisions may a service provider make about outsourced work should be clear.
What are the limitations of outsourcing? ›- loss of control.
- negative impact on staff.
- data protection and confidentiality risks.
- lack of consistency.
- financial and reputation risks.
- less flexibility.
What are the most frequently reported problems in outsourcing? ›
- Loss of Control. ...
- Communication Barriers. ...
- Hidden and Unforeseen Costs. ...
- Finding a Trustworthy Vendor. ...
- Security and Privacy Concerns. ...
- Language and Cultural Difference. ...
- Lack of Outsourcing Experience. ...
- Selecting the Right Outsourcing Approach.
- Core Competencies. Your core competencies are the capabilities or traits that make your company stand out from the competition. ...
- Customer Service. Another area of your business that you should avoid outsourcing is customer service. ...
- Human Resources.
To cut to the chase: Yes, in fact most businesses save anywhere from 30-40%, but that's not the big reveal you'll get from this.
How common is outsourcing? ›There are 59 million freelance workers in the US. 78% of businesses all over the world feel positive about their outsourcing partners. About 300,000 jobs get outsourced out of the US each year. 71% of financial service executives outsource or offshore some of their services.
How big is the outsourcing industry? ›...
| Report Attribute | Details |
|---|---|
| Market size value in 2022 | USD 261.9 billion |
| Revenue forecast in 2030 | USD 525.2 billion |
| Growth Rate | CAGR of 9.1% from 2022 to 2030 |
However, statistics show that outsourcing is still a major practice among contemporary companies, and there's no sign that it will stop any time soon. Basically, you could even say that this is why companies outsource: they need extra help not found or as-affordable in their home country.
How much US manufacturing is outsourced? ›According to the Economic Policy Institute, American corporations have outsourced more than 5 million jobs and 91,000 plants since 1998. Under the flag of the free market, the public found out that there was no loyalty to the United States.
What is the benefits of outsourcing? ›Outsourcing benefits and costs
lower costs (due to economies of scale or lower labor rates) increased efficiency. variable capacity. increased focus on strategy/core competencies.
The answer is a straightforward “yes.” Outsourcing growth has been tremendous these past few years. In 2021, the global outsourcing market was valued at $245.91 billion. As the United States and the rest of the world reemerge from the pandemic, outsourcing will continue to make tidal impacts across industries.
Which jobs are most often outsourced? ›- Customer support representative. ...
- IT support specialist. ...
- Human resources specialist. ...
- Payroll clerk. ...
- Bookkeeper/accountant. ...
- Tax preparer. ...
- Personal assistant. ...
- Computer programmer.
What is outsourcing in simple words? ›
Outsourcing is a business practice in which a company hires a third-party to perform tasks, handle operations or provide services for the company.
What are examples of outsourcing? ›Some common outsourcing activities include: human resource management, facilities management, supply chain management, accounting, customer support and service, marketing, computer aided design, research, design, content writing, engineering, diagnostic services, and legal documentation.”
How much is the outsourcing market worth? ›Global Business Process Outsourcing (BPO) Market Size was valued at USD 251.1 billion in 2021, and it is expected to reach a value of USD 492.45 billion by 2028, at a CAGR of 10.1% over the forecast period (2022-2028).
What are the Top 5 reasons companies use outsourcing? ›- Cost Savings. “Cost savings is the main advantage that outsourcing brings in. ...
- Scale Quickly. ...
- Network Security. ...
- Focus on Growth. ...
- Remain Competitive. ...
- Grow Business. ...
- Delegate Tangential Processes.
Although the negatives of outsourcing are constantly thrown at Americans… the bottom line is that outsourcing results in lower costs for firms, greater profits for stockholders and lower prices for consumers — leading to an increase in the standard of living and an overall increase in employment.
Does outsourcing hurt the economy? ›The Bottom LineThe short term gain derived by companies that outsource operations offshore is eclipsed by the long term damage to the U.S. economy. Over time, the loss of jobs and expertise will make innovation in the U.S. difficult, while, at the same time, building the brain trust of other countries.
How many Americans lost their jobs to outsourcing? ›Job loss occurred in all states and the District of Columbia, but given that the trade deficit in computer and electronic parts sector grew the most – and accounted for 39.6 percent of total job losses – the hardest hit state was California, which lost more than 560,000 jobs.
Why are so few products made in the USA? ›Chinese Manufacturing: Advantages
More US companies send their manufacturing production overseas, primarily to China. Doing so provides several significant advantages, including: Lower costs. Cheaper labor.
Americans might object to this, they say, but outsourcing can lead to higher wages and more job opportunities in the developing countries to which U.S. firms outsource. Some analysts view this as an advantage, saying that over time it can narrow the gap between rich countries and poor countries.