Outsourcing has recently gained a lot of popularity because of the simplicity and high return on investment, and this trend is only the beginning of a new business era. The importance of outsourcing work can’t be denied. By now, numerous research studies have been published that yield some pretty amazing outsourcing statistics.
We’ve compiled the most useful and interesting ones, which you can study to see just how important the outsourcing industry truly is. You will be able to get a good grasp on how the outsourcing industry behaves now, and what we can expect in the years to come.
The ability to predict future trends is something that every business in the world needs. This is why this article could benefit business owners as well, especially those relying on outsourcing different tasks.
Let’s dive in and highlight everything you need to know about this industry in the United States.
Outsourcing Statistics for 2019 (Editor’s Choice)
- 41.5% of all outsourced work comes from the USA
- 47% of companies outsource to solve capacity issues
- Companies which outsource payroll spend 18% less time on administrative duties
- 59% of companies outsource work to reduce costs
- 28% of companies outsource to get access to a larger talent base
- Manufacturing is the largest sector outsourced in the US at 53%
- 93% of companies are considering or already using cloud solutions
- 29% of IT spending is done outside the IT organization
- App development is one of the most outsourced tasks in 2018.
Reasons Why Companies Outsource
There are many reasons why companies decide to utilize outsourcing in their business operations. By studying outsourcing statistics, we were able to identify the main reason why companies from the US choose this option.
1. 59% of companies outsource work to reduce costs.
One of the main problems companies face is the balance between cutting jobs and cutting costs of running the business. Fortunately, thanks to outsourcing, firms can retain both – the same amount of workers and reduced costs of business operations.
Companies in developed countries, such as the United States, can reduce such costs by a staggering 59% if they decide to outsource work to a less developed country and its workforce.
Stats on outsourcing confirm this information, and we see many companies utilizing this opportunity. This is true for both digital and retail businesses alike, as both can reap the benefits of outsourcing
2. 57% of companies outsource work to focus more on the core functions.
Another great reason for outsourcing work is reducing the load of time-consuming tasks. If you think about it, after outsourcing the majority of tedious tasks to remote workers, it will vastly improve both the effectiveness and efficiency of your full-time workforce. It is one of the outsourcing trends that has a major impact on how modern companies operate.
For this reason, we should not be surprised that the number of US companies outsourcing specific tasks stands at 57%.
3. 47% of companies outsource to solve capacity issues.
When it comes to capacity management, many US companies use outsourcing strategy to cope with capacity issues. Every company has its growing pains. Whether it is prepared for rapid growth or not, at some point, the company will experience capacity issues.
One of the outsourcing facts tells us that 47% percent of US companies, who are experiencing issues with capacity management, resort to outsourcing as a solution.
4. 31% of companies outsource to improve service.
By outsourcing, companies are able to provide a better overall service to their customers. Considering that utilizing multicultural, agile teams impacts both the company’s and individual’s work culture, you can rest assured that the end result will always be a better customer service.
The statistics on outsourcing also confirm that better customer service is one of the main reasons why companies decide to start outsourcing their work.
Using remote multicultural workforce can greatly improve the overall service your company provides to the customers. While this is true for both B2B and B2C businesses, it is vital for the latter in particular.
Great service is always going to be essential in building healthy relationships with your customers. For this reason, statistics on outsourcing tell us that companies are not outsourcing work solely for reducing costs, but also to improve the service the end-customers will receive.
5. 28% of companies outsource in order to get access to a large talent pool.
One of the main perks of having remote workers is that you get access to a global pool of talent. With this, you can choose among experts from all around the world. If we consider that this is just one of the outsourcing stats that contribute to the importance of outsourcing work, it’s easy to see why more and more companies are opting to hire workers overseas.
6. 17% of companies outsource work to manage the business environment and accelerate organizational transformation.
Managing business environment is definitely not an easy task. Most companies get to the point of rapid expansion, which can provide numerous issues for managing their business environment. On the other hand, as companies also experience times where organizational transformation is brought to a halt. In both cases, outsourcing can provide them with the right solution to their problems.
How Outsourcing Affects the US Economy
There has been an ongoing debate for some time now about the benefits and downfalls of outsourcing. If we take a look at raw outsourcing statistics, we can see that this debate is still pretty much alive.
At the moment, there is no definite answer to this dilemma. On the one hand, there is the fact that a lot of US jobs are carried out by outsourced workers. This may affect the status a company has and raise concerns among customers about the quality of work. On the other hand, the US companies relying on outsourcing work could save not just time, but money too.
In any case, it seems that outsourcing is here to stay.
7. More than 93.000 jobs have been lost due to outsourcing.
Jobs lost to outsourcing statistics show that outsourcing has some bad sides to it as well. Since 2016, the average number of jobs lost every year due to outsourcing rose to 93.000 per year. This is something that is troubling many US citizens and the main reason why some people strongly object to outsourcing jobs outside of the country.
However, the state of the matter shows us that, even though they might not approve outsourcing, the vast majority of companies are still using it.
8. The US outsourced over 2.4 million jobs during the last decade.
Considering the outsourcing statistics by year, it is hardly surprising that there were almost 2.5 million jobs outsourced during the last decade. Add to that the simple fact that more and more online jobs are being created every day, and you have an environment that is ripe for outsourcing to grow.
9. There are 10 companies that outsource more than 200.000 jobs in total.
Have you ever wondered just how many companies outsource? The number of jobs being outsourced continues to grow, and there are 10 companies that are the most responsible for this fact. These include IBM, EDS, Dell, Cognizant, Siemens, General Electric, Convergys, Accenture, Computer Sciences Corp, and Intel.
It is only natural that they will continue with this practice because of the benefits they get from outsourcing work to remote workers. That said, even though it could be potentially dangerous for the economy, outsourcing is definitely here to stay.
10. In 2018, US outsourcing adoption soared to a new high — outsourcing increased by 57%, 34% of companies restructured outsourcing segments, and only 9% of outsourcing agreements were terminated.
These United States outsourcing statistics show us that more and more US companies are willing to try out outsourcing as a viable workforce solution. Considering that this trend will most likely continue to grow, we can conclude that the percentage of companies who decide to delve into outsourcing will only expand.
11. Over 300.000 jobs are outsourced annually.
Outsourcing has been a global trend for quite some time now. One thought was bound to cross your mind by now – how many jobs are outsourced every year? It is estimated that over 300.000 jobs are being outsourced every year, which is a fact that should not be overlooked.
While this may seem like an issue for the US economy, the benefits of outsourcing reaped by the US companies is also something that should be factored in. Even though this fact is still being discussed, it is also one that tells us that outsourcing is here to stay.
12. 41.5% of all outsourced work comes from the USA.
As outsourcing statistics graphs show us, in 2017, the US was the largest producer of outsourcing work in the whole world, with 41.5% of the market share. While this was a declining trend in 2017, during the previous year, we saw the number of outsourced jobs from the United States only grow.
Today, the US is the main country that’s been fueling the outsourcing industry. In addition, there’s a number of ex-pat communities all around the globe enabling US ex-pats to continue working for companies from their home country.
That being said, the US outsourcing statistics for 2018 show us that the actual percentage of US-outsourced work on the global market is steadily going up. This is because more and more companies from all around the world are starting to utilize the practice of outsourcing their work.
13. In 2013, the US spent over $500 billion on outsourcing contracts.
That trend continued over the course of years. If we consider that alongside other statistics provided by the US government, we can conclude that it is one of the largest spenders on outsourcing contracts in the state.
What Industry Sectors Are Being Outsourced?
One of the key benefits we can gain from observing business process outsourcing trends is the ability to determine what industry sectors are currently in-demand, as well as those that are gaining traction. This can provide benefits to both companies and remote workers, as they’ll be able to keep track of the relevant market easily.
14. Manufacturing is the largest sector outsourced in the US at 53%.
Even though most people think that IT services are the most outsourced sector, that’s not actually the case. IT sector outsourcing in the US stands at 43%, while manufacturing stands at 53%.
However, if we add more job outsourcing statistics, such as research and development within the same niche, which stand at 38%, we can conclude that IT services and IT-related jobs lead the charge when it comes to outsourcing. The distribution sector is outsourced at about 26%, while call centers are outsourced at just 12%, which is a rather surprising fact.
15. App development is one of the most outsourced jobs in 2018.
App development has been a skill that has risen in demand a lot over the last couple of years. Simply put, there are more app development jobs in the US than there are app developers. If we consider US outsourcing statistics, according to which 56% of companies in the US outsource parts or the entire app development work, we can see that this is a number we shouldn’t overlook easily. The estimated projections are that this trend will only continue to grow in the future.
16. Companies which outsource payroll spend 18% less time on administrative duties.
Payroll is one of the business operations that are often outsourced. There are many reasons why this is a good idea, and one of them is the fact that companies who outsource payroll spend 18% less time on administrative duties.
While this statement is true if we consider payroll outsourcing statistics, the actual case varies depending on the structure and the individual quirks of the company.
For example, smaller companies could burn a lot of money if they are doing payroll in-house, which is why they rely more on outsourcing this operation. On the other hand, bigger companies can afford a payroll department and keep their payroll operations less dependent on remote workers.
Being less dependent on remote workers brings a significant advantage to the companies – they can have more privacy when it comes to their business operations. While privacy may pose an issue for some companies, the saved time a company would get from outsourcing payroll could be put to great use in some of the departments that are in dire need of more manpower.
Key Global Outsourcing Trends in 2019
One of the main perks of studying statistics is the ability to figure out the latest trends in any industry sector. With this, you can see what areas of remote work are going to become in-demand. The outsourcing market is no exception to this rule.
In this section, you will find a few key trends that are going to affect both global and US outsourcing market in 2019 and beyond.
17. 93% of companies are considering or already using cloud solutions.
While we can’t predict the future, if we were asked to predict one of the main outsourcing trends for 2020, it would certainly be related to cloud solutions. The vast majority of companies are already using this service, and this trend has already become a must for almost every new company.
18. 84% of companies have piloted or implemented disruptive outsourcing.
When implemented correctly, disruptive outsourcing can provide you access to competitive advantage, which is something most companies would consider as invaluable. Outsourcing makes companies more agile, effective, and efficient.
19. The shift towards cloud solutions will impact IT spending by $3 trillion.
As one of the main IT outsourcing trends Gartner provided us with, cloud solutions are going to be in-demand for the time to come. There are both good and bad sides to this fact. The main good thing is that it will create an abundance of new jobs. The bad thing is that companies will have to spend more on cybersecurity. In summary, even though IT spending will see a considerable rise, it is not necessarily a bad thing.
20. 29% of IT spending is done outside IT organizations.
If IT outsourcing trends show us anything, it is that IT-related tasks are pretty much time-consuming and demand a high level of attention. This is the main reason why companies prefer outsourcing IT processes to remote organizations.
From the beginning of online outsourcing, IT industry has been the most popular outsourcing niche. Since most of the IT processes can be done remotely, it’s easy to say that this trend will only continue to grow.
Closely studying outsourcing statistics allows us not only to see how the outsourcing market is performing at the moment but also to discover what we could expect in the near future. The ability to predict the market’s development is essential for both companies and remote workers. They will both be aware of the current skills in demand and offer, which would help them select better job or candidates.
After carefully considering all the stats and outsourcing trends we compiled, it’s crystal clear that the outsourcing market is only going to continue growing. The actual effects of the US job growth are yet to be seen.