The Latest Global IT Outsourcing Statistics: Key Trends and Insights

Quick Overview: The landscape of IT outsourcing is experiencing exponential expansion, with its growth trajectory poised to extend seamlessly into the foreseeable future. As we delve into this discourse, we'll not only unravel the IT outsourcing statistics for 2024 but also unveil an overview of relevant statistics. We will also share IT outsourcing stats in the context of countries, market overview, trends and sectors.

The topic of IT Outsourcing services is a subject of extensive debate, with concerns about its impact on domestic job opportunities, while others recognize the myriad of benefits that comes along with outsourcing.

In recent years, IT outsourcing services have emerged as a favored strategy for bolstering in-house teams, emphasizing augmentation or in-house teams rather than replacing existing employees with cheaper labor. And this is why you can expect the global IT outsourcing market to show an annual growth rate of 8.48% in the forecast period 2024-2029.

If you are in a dilemma or planning to outsource your IT requirements, you should not miss out on these interesting IT outsourcing statistics.

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IT Outsourcing Statistics 2024 [Editor’s Choice]

• 66% of businesses in the US outsource at least one department.
• The IT outsourcing market will grow by USD 812.70 billion by 2029, according to Statista.
• Each year, 300,000 jobs in the US are outsourced.
• 24% of small businesses outsource their requirements to enhance efficiency.
• 70% of companies find outsourcing cost-effective, as it reduces the costs of hiring in-house staff. So, if you have cost-reduction on your goal-list for 2024, global IT outsourcing could help you.
• The US market generates $62 billion of the total international income from the $92.5 billion global outsourcing business.
• Information technology is the most outsourced industry and business department, with 37% of IT operations being outsourced and an average IT department budget of 13.6% allocated to outsourcing.
• Around the world, 78% of companies that outsource work have a positive attitude towards their outsourcing partners.
• Between 2021 and 2025, the outsourcing industry is anticipated to expand at a compound annual growth rate of 4%.
• Since the pandemic, 45% of businesses have intended to boost their outsourcing, frequently emphasizing locating skill sets they can't access in-house.
• 90% of businesses can take advantage of more outsourcing opportunities thanks to the cloud because it allows teams to connect with more remote professionals.
• As long as businesses continue to collaborate with contractors, business process outsourcing will reach a value of $620 billion by 2032.

Outsourcing Market Statistics for 2024

• Two sub-industries, Business Process Outsourcing (BPO) and Information Technology Outsourcing (ITO), dominate the global outsourcing market.
• ITO includes cloud computing services, web and mobile app development, cyber security, data backups, and many more.
• BPO encompasses a wide range of operations, including marketing, customer support, payroll and other HR management services, and logistics.
• According to Deloitte, global outsourcing spending might reach $132.10 billion.

IT Outsourcing Market Overview for 2024

• On average, employee spending on IT outsourcing is $132.10 bn in 2023 and it's expected to reach a whopping $777.70 bn by 2028. This rise will occur at a CAGR of 11.07%.
• At $197.30 bn, the US is all set to contribute the most significant portion of the market's revenue in 2024.
• The top three categories in the IT outsourcing market are web hosting, software development outsourcing, and administration outsourcing. They make up 63.5% of the market's total worth.
• More than 75% of executives said they would outsource IT services. The top three of them are IT infrastructure services, app and software development, and cybersecurity.
• Last year, 67% of executives reported an increase in the budget for Operated Services, 57% reported a rise in the budget for Managed Services, and 32% reported an increase in the budget for traditional outsourcing. In a nutshell, organizations are investing more money in Information Technology outsourcing services overall and you shall prefer to do too in 2024.
• Access to new technical options and human and cost-saving potential are the two most significant factors in favor of IT outsourcing.

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IT Specialists Market Statistics for 2024

The demand for highly skilled specialists proficient in complicated technologies is increased across the USA, Canada, and Western Europe. Particularly noteworthy is the heightened demand for developers in Eastern Europe.

According to a report from the US Bureau of Labor Statistics, software development ranks among the most sought-after professions and commands the highest median earnings. These regions are grappling with a pronounced shortage of workforce, with demand far outpacing supply, prompting a significant escalation in service prices by the existing specialists.

The Bureau of Labor Statistics predict that employment growth in the USA will increase by 31% in 2026. About 255,400 IT jobs are expected to be opened up in this span. We will also witness an increase in wages in the IT sphere.

While overall salary growth in the United States is 1.8%, this growth is roughly 3%.

Specialty, education, employers, and geographic areas should all be considered. The best-paying areas are undoubtedly metropolitan areas. The cost of hiring a software developer is among the highest in cities like San Francisco, NYC, Seattle, and San Jose, California.

Global Outsourcing Trends and Market Size for 2024

According to research and market surveys, the global market for outsourcing services will be worth $904.948 billion in total by 2027.

The situation of the global outsourcing market today is comparable to an ecosystem that is buzzing with innovation. It has transcended geographical boundaries and developed into a significant element influencing business growth.

• According to a ManpowerGroup poll, 77% of employers say they are struggling to find talent with the skills they need. So, make sure you consider options such as upskilling or global IT outsourcing in 2024 for investing in the right employees for a long time.
• The outsourcing sector has undergone a transformation thanks to technology. Processes have been updated due to automation, artificial intelligence, and cloud computing.
• As per Buffer’s State of Remote Work, 82% of surveyors shared that they are working from home. This was higher than what was registered in 2022 at 59%.
• Further, other respondents (71%) preferred a fully remote structure as compared to last year at 49%. This could be probably as more surveyors have experienced hybrid work and appreciate its benefits.
• The flexibility of engagement models is increased to meet business requirements. Businesses can select the model that best suits their needs, from long-term contracts to project-based agreements. This is the way to encourage continuity and teamwork.
• Outsourcing any service now requires careful consideration of data protection. Offshore businesses now use data protection processes and strong security measures.
• Off-shore/near-shore SSCs adoption and implementation boosts while on-shore SSCs observe a reduction as organizations mature in their GBS journey
• The models of Centre of Excellence are used early by organizations and consistently throughout their GBS cycle.

Here, take a look at the revenue estimation for different IT Outsourcing domains. You will know that the total revenue of 2024 for IT outsourcing stands at 512.60 USD. It includes the revenue from web hosting, other IT outsourcing, application outsourcing, and administration outsourcing.

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IT Outsourcing Market Stats by Countries

India: India is the most favorite and preferred country for software development outsourcing. It’s known as the “Outsourcing Capital of the World”. It’s popular for its myriad of talents, skilled professionals, and technocrats. India is popularly known for software development, IT services, customer support, and back-office operations.

Philippines: The Philippines continues to draw businesses looking for high-quality, reasonably priced outsourced solutions. It enjoys substantial government support and ties to Western nations culturally. It serves as a hub for call centers, knowledge-based services, and business process outsourcing (BPO).

Southeast Asia: Southeast Asian nations compete fiercely in the outsourcing industry. Thailand, Vietnam, and Malaysia are well known for their services. They are experts in digital marketing, business support operations, and IT outsourcing. They become a distinctive attraction; as a result, attracting both domestic and international clients.

China: When it comes to manufacturing outsourcing, China has become a major player in the outsourcing industry. China has become the go-to location for businesses looking to optimize production and gain access to the largest consumer market in the world. China is renowned for its efficient, cost-effective production capabilities and unparalleled supply chain management expertise.

Eastern Europe: Eastern European countries are not left behind when it comes to the outsourcing industry. With great expertise in software development and IT services, it has become an attraction to many clients worldwide. Ukraine, Poland, and Romania are countries that offer high-quality solutions along with cost advantages.

The Rise of IT Outsourcing Sector

49.6% of businesses stated that they would raise their outsourcing percentage in the coming year. Only 10.4% of respondents wished to reduce outsourcing, while 40% saw no change. Therefore, it is reasonable to predict that software development outsourcing is a good choice, and its market will expand.

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Outsourcing Frequency by Sector: App Development

The tendency of a business to IT outsourcing services completely depends on the industry it operates in. The above graph displays the industries that outsource app development with average frequency. Retail/wholesale businesses come in second at 60%, followed by the financial services sector at 72%. Companies in the healthcare industry are included in the list with a relatively low 31%.

IT Outsourcing Trends

• Businesses are accelerating their digital transformation in 44% of cases already.
• 33% of companies want to increase governance, risk, and security. A crucial development in IT outsourcing during that time was increased security.
• 30% of companies want to create training materials to assist remote employees.
• 36% of companies intend to boost IT operations and system performance.
• 32% of companies intend to use standardized, safe, and simple solutions to connect employees.
• 27% of companies want to improve disaster recovery strategies to consider additional scenarios.

Growth in Automation and eCommerce for 2024

The global ecommerce market is expected to total $6.3 trillion in 2023. That figure is estimated to grow over the next few years, showing that borderless ecommerce is becoming a profitable option for online retailers. By 2024, 21.2% of total retail sales will happen online.

The report from Nasdaq states about 95% of all retail purchases will be made online by 2040.

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Rise of Cloud Services

Cloud migration is a complex process. With the ongoing digital transformation and IT outsourcing trends, many organizations are on the verge of adopting cloud-based solutions. Hence, they plan to migrate from on-premises architecture to cloud-based data storage. It will also help organizations to manage their software development lifecycle process more efficiently and seamlessly.

Cloud computing presents a range of advantages, encompassing enhanced data security, swifter data processing capabilities, and the facilitation of process modernization through the seamless integration of diverse business applications.

The global cloud computing market is estimated to witness a healthy growth in the forecast period of 2024-2032 to reach about USD 1873.59 billion by 2032. In addition, (SaaS) market is estimated to be worth approximately 197 billion U.S. dollars and estimated to reach 232 billion U.S. dollars by 2024.

The markets for Platform as a Service (PaaS), Software as a Service (SaaS), and Infrastructure as a Service (IaaS) are experiencing an annual growth rate of 24%. Therefore, the cloud computing market will reach $623.3 billion after two years.

Artificial Intelligence: RPA and AI-Powered Chatbots

After ChatGPT was released at the end of 2022, an IT outsourcing trend emerged. Giant companies like Microsoft, IBM and Samsung have heavily invested in global AI start-ups. Technology giants frequently use AI-based chatbots and robot automation to provide flawless and affordable customer support.

Alphabet's Q2 2024 earnings call put emphasis on the increasing adoption of generative AI wide the company's cloud and product offerings. Almost around 70% of generative AI startups depend on Google's cloud infrastructure and AI capabilities.

This shows the pull for trailblazing technology among emerging companies looking to craft brand-new services driven by Google Bard and other models. The AI-optimized infrastructure is a launchpad for training and serving generative AI models. 70%+ generative AI unicorns are Google Cloud clients, comprising Cohere, Jasper, Typeface, and many more.

Remote Work and Cybersecurity in 2024

As per the survey conducted by Gallup in 2023,

• 5 in 10 people are working hybrid
• 3 in 10 people are working remotely
• 2 in 10 are entirely on-site

As per the data from AT&T, the hybrid work model will grow from 42% in 2021 to 81% in 2024.

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