All the latest data is now in one place.
Enjoy the IT outsourcing statistics.
Table of Contents
It Outsourcing Market Size
In 2021, the estimated size of the global market for outsourcing IT services was USD 530.15 billion. According to forecasts, this market is expected to reach approximately USD 1065.10 billion by 2030, with a projected compound annual growth rate (CAGR) of 8.06% between 2022 and 2030.
Conclusions: The market for outsourcing IT services is expected to grow significantly over the next decade. This growth presents a promising opportunity for outsourcing companies to expand their services and tap into a growing market. Companies that can provide high-quality IT outsourcing services are likely to be in demand and can expect to benefit from this upward trend.
IT keeps 34.0% of the World’s Outsourcing
Around 34.0% of the total market revenue was attributed to the IT & telecommunication segment, making it the largest revenue contributor in 2022.
Conclusions: This statistical data highlights the importance of the IT & telecommunication segment in the outsourcing industry. Outsourcing companies that can provide high-quality services in this segment can expect to benefit from this revenue contribution and the potential for future growth.
According to the other study, in 2022, small businesses plan to outsource various business tasks across multiple industries, with technical support being the primary area of focus. The top outsourced services for small businesses in 2022 were as follows:
- IT services: 27%
- Digital Marketing: 24%
- Legal: 23%
- Finance: 23%
- Development: 21%
- Customer Support: 19%
Conclusions: The data shows that small businesses are seeking to leverage the expertise of outsourcing companies to gain a competitive edge and to manage their operations more efficiently. Outsourcing companies that specialize in IT services, digital marketing, legal, finance, development, and customer support are likely to see increased demand for their services in 2022.
Talent Acquisition Is a Top Challenge
Despite over 50% of executives reporting an increase in staff to support growth over the past year, talent acquisition remains the top internal challenge for many organizations. At the same time, a significant 62% of executives report feeling unprepared to deal with the causes and consequences of poor employee retention.
Conclusions: The statistical data shows that talent acquisition and retention remain the top internal challenges for many organizations, even with increased hiring. Many executives feel unprepared to address these issues, indicating a need for outsourcing companies that specialize in talent management and recruitment to provide effective solutions.
Main Outsourcing Objectives
The driving factor behind outsourcing decisions is still a cost reduction. If there is no clear financial benefit to outsourcing, it is less likely to occur. The other popular considerations are flexibility, increased speed to market, and quick access to tools and processes.
Conclusions: To be successful, outsourcing companies should offer cost-effective services that align with these other priorities and provide clear financial benefits to their clients.
Onshore vs Offshore Outsourcing
In 2021, the off-shore segment accounted for the highest revenue share of over 52% while the on-shore segment contributed 48% of the total revenue share.
Conclusions: Off-shore outsourcing continues to be a popular option for companies seeking to reduce costs and access a larger pool of talent, as evidenced by the high revenue share it commands. However, on-shore outsourcing still accounts for a significant portion of the total revenue share, indicating that it remains a viable option for companies that value proximity and support the local economy.
| Regions | Revenue Share in 2021 (%) |
|---|---|
| Asia Pacific | 36% |
| North America | 29% |
| Europe | 23% |
| Latin America | 7% |
| MEA | 5% |
Predicted CAGR
During the forecast period from 2023 to 2030, Asia Pacific is expected to register the highest compound annual growth rate (CAGR) due to several factors such as reduced labor costs, increasing demand for skilled professionals, and significant digital investments by major vendors such as HCL Technologies Limited, Infosys Limited, Accenture, and Wipro.
Conclusions: To capitalize on this growth opportunity, outsourcing companies should focus on offering tailored solutions that cater to the unique needs of the Asia Pacific market.
Outsourcing Through PEO
Outsourcing HR services through PEO (professional employer organizations) resulted in an average cost savings of 27.2% in 2019.
Conclusions: Outsourcing companies that specialize in HR services, particularly through PEOs, can offer customized solutions that can help businesses reduce costs while providing access to specialized resources and expertise. By outsourcing HR functions, businesses can streamline operations, improve efficiency, and focus on core business functions, leading to improved profitability.
Small Business Outsourcing
Conclusions: By offering tailored solutions that provide value and cost-effectiveness, outsourcing companies can help small businesses streamline their operations, reduce costs, and gain a competitive edge.
Key Market Players
There are several key market players in the outsourcing industry, including Accenture, Cognizant, Capgemini, Infosys, IBM, HP, and Oracle.
Conclusions: Even those these giants are here to stay, the market is not saturated yet, and new players appear regularly.
Seasonal Outsourcing
According to a survey, 33% of small businesses are inclined to outsource on a seasonal basis as it allows them to access flexible resources. This approach enables them to manage their business more effectively and efficiently during periods of fluctuating demand.
Conclusions: Outsourcing companies can help small businesses improve their operational efficiency and better manage their business during peak periods. For that goal, staff augmentation model works best.
The IT outsourcing industry is on a path of consistent growth, shaped by the diverse needs of businesses worldwide.
Talent acquisition presents challenges, but also opportunities for companies to showcase their expertise. Understanding and adjusting to these changes will be essential for companies to do well and last a long time in the IT outsourcing business.
