Does the outsource market grow?

Outsource market also known as business process outsourcing BPO refers to the subcontracting of business-related functions to third parties. According to statistics, the global outsourcing market in 2018 was estimated to be 88.9 billion dollars, representing a 12 million dollars increase from the previous year. The 2018 Delloite survey indicates that the number of firms requiring outsourcing services increased from 45% in 2017 to 67% in 2018. Hence, companies are increasingly acknowledging the potential benefits of the outsourcing market.

Why outsource?

Companies, mainly startups, outsource to third parties for various reasons, including:

  • To focus on their core business, 57% of companies under survey indicate that they outsource to focus on their key business.
  • To save costs. In the report, 59% of companies under survey outsource to save costs
  • To get the best talent in the freelance world, 31% of companies under survey indicate that they outsource to benefit from a global talent
  • To enhance service quality
  • To drive transformational change
  • To manage the business environment

Top outsource countries

The 2018 report by market watch indicates that the US is the leading provider of the outsource services accounting for 84.2%. The US is followed by the UK at 5.2%, followed by Australia and Spain. Ukraine is a rising talent in the outsourcing market, with a global contribution of 1.2%. The leading services outsourced by Ukraine are technological services. Over the years, Ukraine has established itself as a leading hub for talent in information technology. Companies like have won various awards as a leading software development company. As the need for digital transformation by company’s increases, the providers are positioned to respond and provide customized solutions to meet such needs.

Leading global outsourced services

The top services being outsourced are information technology services with the website development and application development leading the list. To search for innovative ideas and services, companies opt for outsourcing services. Also, they strive to get experienced, and specialized skills are the top reasons to outsource information services. The report by Delloite indicates that 53% of companies outsource their IT services to third parties.

Other key areas in the outsourcing market

Accounting, mainly payroll management is another key function being outsourced to third parties. Accounting can be time-consuming and expensive for a business. Thus, to boost compliance while saving costs, most companies opt to outsource this function.


According to the bureau of labor statistics, three opt for S based companies prefer to employ freelancers. A third of the American workforce prefers to work as freelancers due to increasing demand and rising wages in the freelance market. The market for virtual assistants is booming, with more companies opting for freelancers and short term contract employees.

The Philippines is the leading provider of freelance virtual assistance services. Freelance contributes nearly 8% of GDP in the Philippines, which is high compared to the global average of 2.4%.In the last five years, many Philippine-based companies have increased their wage rates as the demand for their services increases.


According to a report by KPMG, social media marketing, and eCommerce account for 40% of the annual sales globally. This has created an opportunity for companies to outsource their marketing functions to digital experts. By outsourcing the function, companies benefit from skills and talent, which can be difficult to find locally. Outsourcing marketing services is cost-effective both in terms of time and money. The report indicates that 76% of companies that outsource this function reported an increase in sales. Customer support and logistics are other outsourcing areas expected to grow in 2020. Know more about customer support through services like Challenger.

Outsourcing trends for 2020 and beyond

Expert analysis indicates that the outsourcing market is expected to continue growing in 2020. The expected growth rate in 2020 is expected to be 24%. Some of the key trends include:

Idea generation

Idea generation expected to continue dominating outsourcing. There is no price to a good idea and companies are increasingly seeking great ideas to improve their operation. With increasing competition, there is a need for companies to innovate to benefit from competitive advantage, hence idea generation will continue to dominate. Some of the key areas of innovation include:

  • Mobile development
  • Digital marketing
  • Search engine optimization
  • Logistics management
  • Increased specialization 

As technological sophistication continues, companies will continue to pursue data-driven objectives. This requires technological innovation with capabilities to collect, analyses, transform and interpret data in ways that add meaning to companies.

Robotic process automation

The increase in artificial learning and machine language will dominate business processes in 2020 and beyond. According to Delloite, 40% of jobs in the US will be automated by 2030. Currently, companies like Amazon have started using robotic automation within their operations, and this is expected to increase. Advancement in machine learning will lead to massive jobs loss. Thus, there is a need for skills realignment to meet the growing needs.



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