Ultimate outsourcing statistics and reports in 2020

Outsourcing statistics

Owners turn to business process outsourcing as a viable option instead of hiring in-house employees. With this, different institutions rank and name the top and emerging countries for outsourcing as a guide for businesses.

Despite the projection on the rise of disruptive outsourcing, companies are still optimistic in the power of delegating tasks to the human workforce than their AI counterparts.

Outsourcing report

On the verge of disruptive outsourcing and robotic process automation (RPA), companies still turn to the outsourcing and shared services (OSS) industry, with another emerging country to consider.

As reported by Deloitte and a news article in the Arabian Gazette, it gained popularity in the Middle East, particularly Dubai, and is projected to increase to $6.8 billion by 2023.

The 2019 A.T Kearney report highlights the importance of automation and cybersecurity as some of the factors the countries consider in choosing a BPO company, aside from its location. This shift affected more repetitive jobs in low-cost countries, replacing these with highly-skilled ones to attend to the increasing demand for automation.

Outsourcing report

As per Gartner, more than 80% of logistics leaders plan to increase their outsourcing budget by more than 5% by 2020. One of the reasons for this is that outsourcing their logistics helped them a lot by meeting or exceeding the end-to-end (E2E) supply chain and overall business objectives.

The Everest Group, meanwhile, sees a 9-11% growth on life and pension insurance BPO industry since end-to-end third-party administration grows. The industry has already seen a consistent yearly growth of 9-10% since 2014. 

Business Process Outsourcing (BPO) countries

Yearly, different research institutions list the top countries for outsourcing services. They usually base this on aspects such as workforce population, literacy rate, and access to the latest technology.

The following is an in-depth view of these countries, on the reason companies choose to outsource in that country and their specializations.

India

India remains the leading country to outsource as per Tholons Top 50 Digital Nations and A. T. Kearney Global Services Location Index of 2019. The country also has 14 super cities listed in the Tholons report. Aside from the 24/7 service and the latest technology used at work, it prides its top talents mostly specialized in IT and software development.

Highlights 

Fast facts

  • Gross Domestic Product (GDP). “India is the 3rd largest economy in the world after the US and China in terms of purchasing power party (PPP) and 10th in terms of nominal GDP.” – Deloitte India
  • Doing Business. India has moved 14 places to 63rd among 190 nations in the World Bank’s ease of doing business ranking on the back of multiple economic reforms by the Narendra Modi government.” – India Times
  • Indian Railways. “Indian Railways is one of the largest employers in the world with over 1.4 million employees.” – MSN Money
  • Labour force. “Slightly less than half of the workforce is in agriculture, but services are the major source of economic growth, accounting for nearly two-thirds of India’s output but employing less than one-third of its labor force.” – Forbes
  • Action to climate change. “The country is paying its states about $125 per hectare of forest per year as a way to give afforestation a boost, one of their ways to tackle climate change.” – World Economic Forum

 

The Philippines

Next to India, the Philippines is one of the most popular outsourcing destinations. The country, though considered a late bloomer, holds the title ‘The BPO Capital of the World’ since 2010. Being a former colony of Spain and the US gained them the advantage of cultural compatibility with the West. The country specializes in outsourcing customer service roles (voice and non-voice-related) such as call center or IT support.

Highlights 

  • 2019 population: 106.6 million
  • Literacy rate: 97.9
  • English proficiency: #20 in the world and #2 in Asia
  • Employment rate: 95.5 
  • Real GDP (in USD): 9.2 trillion
  • Government support in outsourcing: full support to develop the IT industry
  • Industry body: IT & Business Process Association of the Philippines (IBPAP)

Fast facts

  • Gross Domestic Product (GDP). “The Philippines has one of the fastest-growing economies in Asia, going up to 6.2% in 2018 .” – Deloitte Philippines
  • “In 2015, the BPO sector generated over $22 billion in revenue, accounting for 7.3% of the Philippine economy.” – World Trade Organization
  • Contribution of BPO to employment. “In the same year, the industry generated 1.2 million full-time employees.” – World Trade Organization
  • Government support. As an encouragement to develop the IT industry in the Philippines, PEZA supports foreign investors to set up BPO companies in the country by giving them incentives such as tax holidays, tax-free importation of equipment, and visa assistance for them and their families.

The United States

It is almost just recently when the outsourcing industry in the US started to get popular. Since 2017, domestic or onshore outsourcing has become popular due to the massive pullout of companies. Currently, the country is popular in tech support and IT-related services.

Highlights 

  • 2019 population: 330.2 million
  • Literacy rate: 99
  • Employment rate: 60.9
  • Real GDP (in USD): 21.4 trillion
  • Government support in outsourcing: slowly taking back jobs to the US to increase employment
  • Industry body: National Association of Call Centers (NACC)

Fast facts

  • Online work. “The US is the 3rd largest supplier of freelancers and online workers, next to India and Bangladesh.” – iLabour, Oxford Internet Institute
  • Doing business. “In 2017, President Donald J. Trump Executive Order 13771, also known as the “one-in two-out” policy. It aims to make it less costly to do business in the United States.” – US Environmental Protection Agency 
  • Fortune 500. “In total, Fortune 500 companies represent two-thirds of the U.S. GDP with $13.7 trillion in revenues, $1.1 trillion in profits, $22.6 trillion in market value, and employ 28.7 million people worldwide.” – Fortune.com
  • Paris Agreement. “On November 9, 2019, the United States began the withdrawal process from Paris Agreement, as mentioned in remarks last June 2017, by submitting their notification for withdrawal to the United Nations” – US Department of State

Ukraine

One of the countries gaining outsourcing popularity in Eastern Europe is Ukraine. The country continuously receives recognition from different institutions such as the Global Sourcing Association (GSA) in the UK, IAOP, and A. T. Kearney. IT outsourcing in the country is expected to increase in the following years along with the increase in labor.

Highlights 

  • 2019 population: 41.96 million
  • Literacy rate: 99.7
  • English proficiency: #49 in the world and #29 in Europe
  • Employment rate: 67.2
  • Real GDP (in USD): 124.6 billion
  • Industry body: IT Ukraine Association

Fast facts

  • Agriculture. “Dubbed as the ‘breadbasket of Europe,’ Ukraine is first known for agricultural products such as sunflower and wheat.” – Ukraine Canadian Research and Documentation Centre
  • European Union. In 2017, Ukraine signed an agreement with the EU, Euratom, and the union’s 28 member states. This recognizes the country as a priority partner of the union. So far, Ukraine is not yet a part of the EU. – European Union External Action
  • IT outsourcing. “Developers in Ukraine are currently around 165,000 and are expected to increase up to 125% by 2025.” – Entrepreneur.com

 

Poland

Another Eastern European country that gains popularity in outsourcing is Poland. It is one of the biggest players in IT in Eastern Europe, though it also specializes in finance and accounting. Aside from its multilingualism and affordable costs, BPO companies in the country have secured regulatory compliances from different institutions to ensure providing top data security for their clients.

Highlights 

Fast facts

  • Economy. Poland is now among the fastest-growing economies in the European Union (EU), recording a GDP growth of 5.1% in 2018.” – World Bank
  • Demographic outlook. “…The 15-to-59 age segment is expected to decline by 2.7 million by 2025. This trend can, however, be stopped or even reversed, with targeted policy measures.” – McKinsey
  • Cybersecurity. “The Polish National Cyber Security Strategy aims to enhance capacity to counteract cybercrime, including cyber espionage and incidents of a terrorist nature, occurring in cyberspace.” – EU

 

Brazil

Outsourcing in Brazil has made unrestricted thanks to the Outsourcing law which was signed last 2017 and the Supreme Court decision the following year. This has allowed companies to outsource core duties in the country aside from secondary services such as janitorial roles. Ranked 4th by Tholons, the country is emerging in IT outsourcing and is dubbed an alternative to India since 2010.

Highlights 

Fast facts

  • Overview. Brazil is South America’s most influential country, a rising economic power and one of the world’s biggest democracies.” – BBC
  • GDP savings action plan. A comprehensive social security reform was sent to the Congress in February and has been approved by the lower house in August. The reform is expected to generate accumulated savings of 9 percent of GDP until 2030 and, combined with the spending rule, it would stabilize the general government gross debt at around 81.7 percent of GDP by 2023.” – World Bank
  • Economic reform policies. Some progress has been made in reducing trade barriers, by limiting local content requirements in the oil and gas sector…” – OECD

 

South Africa

Ranked 12th in Tholons Digital Nations, South Africa is now the third-largest emerging BPO geography, competing with India and the Philippines. The BPO industry in the country is also credited for its contribution to economic and social growth, with the help of impact sourcing. South Africa specializes in contact center and IT outsourcing, with most of its clients in banking and finance, telecommunications, and healthcare industry.

Highlights 

Fast facts

  • Economy. “South Africa has one of the continent’s biggest and most developed economies.” – BBC
  • The country ranks second-largest economy, next to Nigeria. – IMF
  • Production. South Africa is one of the world’s largest producers and exporters of gold, platinum, and other natural resources.” – Economic Freedom Index
  • Innovation. “South Africa leads the regional ranking of 2019 Global Innovation Index, making it the most innovative country in Africa.” – WIPO

 

Malaysia

Last but not least, Malaysia is a rising country for outsourcing. It placed third in the A. T. Kearney rankings this year. The country has been gaining popularity in IT and IT-related services. However, it needs to keep up with its neighboring countries when it comes to infrastructure and English proficiency.

Highlights 

  • 2019 population: 38.42 million
  • Literacy rate: 98.74
  • English proficiency: #6 in the world and #1 in Africa
  • Employment rate: 68.2
  • Real GDP (in USD): 88.6 billion
  • Industry body: Outsourcing Malaysia (OM)

Fast facts

  • Economy. Malaysia is one of the most open economies in the world, with a trade to GDP ratio averaging over 130 percent since 2010.” – World Bank
  • Monarchical ruling. Since Malaysia’s independence in 1957, the sultans who are the hereditary monarchs in nine of the country’s 13 states have selected one of themselves to serve a five-year term as king.” – CNN
  • Small and Medium Enterprises (SMEs). 98.5% of business establishments in Malaysia are SMEs. In 2017, they contributed to 37.1% of the country’s GDP. – Department of Statistics Malaysia
  • Censorship. Malaysia has some of the toughest censorship laws in the world. The authorities exert substantial media controls and can impose restrictions in the name of national security.” – BBC

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