Don’t miss out: Exciting outsourcing trends for 2024

Outsourcing, or hiring a company to perform specific tasks for another company, has gained popularity worldwide.

As more organizations seek to lower costs and improve productivity, the outsourcing industry offers better services to meet customers’ ever-more demanding needs.

Businesses increasingly rely on delegating functions such as software development, HR, and IT to outsourcing providers to improve their operations while maximizing their resources.

Apart from nearshore and offshore outsourcing, more companies now turn to local firms or combine the destinations to increase their efforts.

The future of outsourcing will include a combination of meaty business process outsourcing (BPO) services and a plethora of Information Technology (IT) and cloud-based services. Without a doubt, the growing digital universe is where the future of outsourcing lies.

Factors that affect outsourcing trends

A lot of factors affect the long-standing and increasing outsourcing trends, including cost savings.

Businesses can reduce their overhead, workforce costs, insurance, healthcare expenses, and the time required to perform non-core activities by hiring these services from companies almost anywhere in the world.

These outsourcers, in turn, have hired talented people specializing in those specific in-demand tasks.

Based on a University of Chicago study, outsourcing contracts based on the old notion that people deliver services using tools will be wholly affected to reflect that people provide services using digital tools.

In addition to lower fixed costs, companies search for technological expertise to shore up business tools and back-office tasks. This will allow organizations to focus on several aspects to make their core business as profitable as possible.

Outsourcing trends to expect in 2024

Here are the trends in the outsourcing industry to expect in 2024.

IT outsourcing trends

IT outsourcing is a subset of outsourcing that farms out information technology tasks. This also requires greater and more specific expertise every year.

This might include cyber-security, cloud migrations, data management, and secure digital infrastructure.

1. The IT outsourcing market has a current value of US$ 318.5 billion, and by 2026 is projected to reach US$ 425.19 billion, with further strong growth at least through 2031.
2. Experts expect the healthcare, telecommunications, and fintech industries to be top users of IT outsourcing services.
3. As cloud technology expands and advances, data migration, security, and troubleshooting will as well increase.
4. While China and India are still at the head of the outsourcing class based on outsourcing statistics, Eastern European countries like Ukraine, Poland, Belarus, and Romania will give them a run for the top position.
5. Companies will seek to outsource to just one vendor rather than several, reducing logistics on the company’s end.
6. Process and people will continue to drive outsourcing relationships rather than price.
7. Smaller companies are expected to use outsourcing more, reducing operating inefficiencies, reducing costs, and improving their core business strategies.

BPO Outsourcing Trends

BPO is another subset of outsourcing that involves hiring third-party vendors to handle business-related operations.

This type of outsourcing may include links in the supply chain. For example, accounting, billing, and payroll services, to name just a few.

1. Business process outsourcing, or BPO, is one of the fastest-growing global industries.
2. In 2019, Grand View Research predicted that the worldwide BPO market could top US$ 343 billion by 2026.
3. Outsourcing companies will offer social media solutions to their clients for better customer support and improved online performance.
4. Following their surge in use during the pandemic, video conferencing technology, transcript recording, and cloud storage will continue zooming ahead. These tools are understood now to be effective cost-cutting strategies.
5. A more digital world means an even greater need for bomb-proof security solutions, which companies will increasingly outsource to the experts.
6. Companies will explore more outsourcing options to keep their operating costs low as raw material, fuel, and transportation costs rise.
7. Latin America rises as a fierce competitor in the BPO universe.
8. As back-office services level off over the next decade, technology will continue to advance and allow high-end business functions to be increasingly farmed out.

Digital Outsourcing

One of the most prominent outsourcing trends today is digital outsourcing. It also includes the process of delegating digital marketing services to a third-party vendor.

SEO, PPC, social media, and web design are some tasks you can delegate to digital outsourcing.

Other digital outsourcing trends are listed below:

1. Robotic process automation, or RPA, which carries out rules-based tasks currently performed by humans, will increase. This helps in cutting the time required in processes (such as on a production line) and workforce costs.
2. In a more distant future, the implementation of artificial intelligence, or AI, will most likely expand into numerous unexpected areas. The most interesting AI application, meanwhile, might be the ability to perform services that are too dangerous for people or those beyond human capabilities.
3. Even further in the future, digital outsourcing will include blockchain technology for information storage and the ability to perform transactions for multiple customers.

HR Outsourcing Trends

HR outsourcing trends include entrusting HR activities like compliance, payroll, benefits administration, and HR assistance to a reputable firm.

1. With the influx of remote work, the expectations of HR are shifting. As more workers begin transitioning from in-office positions to remote work, companies will change to gig models to distribute projects to gig workers.
2. As organizations expand and outsource employees worldwide, payroll requires adjustments to keep up with different countries’ rules and regulations. Companies will then begin to utilize cloud-based payroll services to make the process more efficient.
3. Recruitment analytics will help companies study trends related to hired staff. With the potential for hiring employees worldwide, finding the best employees for the job can become more complex. Recruitment analytics consider many factors, such as:

• Number of positions to fill
• Length of interviews
• Time between interview and hiring
• Pay rate
• Experience
• Time for training
• Length of employment
• Reasons given for leaving

Comparing these analytics to similar companies makes it possible to see what changes you should make to recruit potential employees.