Outsourcing has been around for a while. However, it’s only become an essential component of business management during the last couple of decades. The latest outsourcing statistics show us that many businesses and organizations are looking to outsource their essential and non-essential job functions to reduce costs and streamline their workforce.
Even though outsourcing has become a way of life for many large and small businesses, not everyone approves of this method.
Why is that?
We decided to study the latest outsourcing statistics for 2021, as well as examples of outsourcing in Canada and the latest outsourcing facts to try to find out.
Let’s dive in!
Top Outsourcing Statistics (Editor’s Choice)
- Over 75% of businesses actively pursue or consider Robotic Process Automation (RPA) in their sourcing arrangements.
- BPO (Business Process Outsourcing) generated US$26 billion in 2019.
- With a revenue of US$62 billion, the Americas had the largest outsourcing market in 2019.
- Outsourcing companies in Canada have outsourced over $11.9 billion to IT consultants.
- Canadian businesses and government will spend an estimated $15 billion on technology outsourcing in 2021.
- One in 25 Canadian workers loses their job due to outsourcing.
- The majority of HR outsourcing companies have less than 30 full-time employees.
Global Outsourcing Statistics
1. In 2019, the global value of outsourcing operations was US$92.5 billion.
Global outsourcing market revenue has been unsteady over the past few years. In 2016, for instance, the industry market size dropped to its lowest figure of US$76.9 billion.
The industry has recovered since then – in 2019, the global value of outsourcing operations reached US$92.5 billion.
2. Over 75% of businesses actively pursue or consider Robotic Process Automation (RPA) in their sourcing arrangements.
Robotic Process Automation is a significant driving force in outsourcing solutions, primarily used for cost reduction. But RPA adoption is not just about reducing the cost.
The thing is:
It can be used to free up the staff to focus on other strategic issues. According to outsourcing statistics for 2020, the biggest barrier to Robotic Process Automation adoption is that the clients don’t see an immediate positive value. This can be challenging for many organizations.
3. BPO (Business Process Outsourcing) generated US$26 billion in 2019.
BPO includes transferring specific work processes to external service providers. This process often includes offshoring of internal functions like accounting and HR, customer-related, or front-office functions like those in call centres.
Even though BPO made a whopping US$26 billion in revenue in 2019, ITO – (Information Technology Outsourcing) topped that with a mind-boggling US$66.5 billion.
In fact, companies that outsource the most are in the IT sector. Other sectors that are increasing their global revenues are EPO (Engineering Process Outsourcing) and RPO (Recruitment Process Outsourcing).
4. With a revenue of US$62 billion, the Americas had the largest outsourcing market in 2019.
The total outsourcing market revenue in 2019 was US$92.5 billion, and the largest share of revenue came from the Americas. The second-largest share came from Europe, followed by the Middle East, Africa, and the Asia-Pacific.
This was the second time North America was a larger market than Europe, Africa and the Middle East. Business executives argue the leading reason for using outsourcing services was to cut costs.
Outsourcing in Canada Statistics
5. One in 25 Canadian workers loses their job due to outsourcing.
(Source: Pearsoned & CBC)
Jobs lost to outsourcing statistics show us that one in 25 employees in Canada loses their jobs because of outsourcing. The jobs that are outsourced are mainly accountant positions that go to Indian workers. One of the biggest companies in Canada that outsource is CIBC. This Toronto-based bank pulled in $1.4 billion in profit due to outsourcing.
6. Between 2011 and 2018, the Canadian federal government outsourced over $11.9 billion to IT consultants.
Outsourcing Canada shows that there were also management contractors as well as temporary help contractors.
Check this out:
Canada outsourcing IT services and consultants make up 71%, management consultants 24%, and temporary help services 5%. The yearly tag for personnel outsourcing has doubled from $1 billion in 2011 to $2.2 billion in 2018.
In fact, IT consultants account for seven out of ten dollars spent on personnel outsourcing.
7. The Canadian businesses and government will spend an estimated $15 billion on technology outsourcing in 2021.
What does Canada outsource?
Technology is dominant. Overall, the effects of outsourcing on the Canadian economy have been quite positive. That’s why, throughout the years, Canada’s outsourcing has increased.
In 2016, the technology outsourcing industry spending by business and government in Canada was worth $13 billion. In 2017 and 2018, it was $14 billion. In 2019 and 2020, it was $15 billion – which is also the projected figure for 2021. In addition to the spending, Canadian companies offer outsourcing jobs to foreign countries.
8. Canada outsourcing amounted to $7.1 billion in 2003, around 25% of all services.
In addition, the offshoring for insurance services was worth $2.9 billion in 2003. Altogether, the business, financial, and insurance services accounted for a massive 78.5% of business offshoring done by Canadian industries. Also, up to 55% of the total imports of financial and insurance services are used for offshoring.
Outsourcing Statistics by Country
9. In 2017, 84.2% of the outsourcing deals took place in the US.
India is the biggest outsourcing provider in the world. However, the US is the biggest contractor, generating a mind-blowing 84.2% of all outsourcing deals in the market.
In comparison, the UK, the second biggest contractor, accounts for a mere 5.2%, highlighting the importance of the US outsourcing market. In 2018, US exports of technology services and products directly supported 157,798 jobs in Mexico.
10. Around 68% of US consumer products companies are outsourcing.
(Source: Reliable Plant)
US outsourcing statistics show us that more than two-thirds of large consumer product companies in the US outsource their workforce. This is due to rising energy costs, lower growth rates, and tight margins.
Job Outsourcing Statistics and Outsourcing Statistics by Industry
11. The outsourcing revenue of the IT segment is expected to reach US$351,381.6 million in 2021.
For the last five years, the IT sector has grown immensely, generating billions of dollars in revenue. It’s projected to reach a market volume of US$429,291.7 million by 2025.
IT jobs are outsourced everywhere in the world, some of the most popular being IT administration, IT support, and web hosting services. According to the latest outsourcing statistics, the US will generate the biggest revenue ever in 2021 – US$129,609 million.
12. The majority of HR outsourcing companies have fewer than 30 full-time employees.
(Source: Extensis HR)
The latest HR outsourcing statistics show that even though these companies have relatively small businesses, they’re hiring more staff.
In fact, according to the latest stats on outsourcing, HRO (Human Resource Outsourcing) companies are the ones with the most growth in the industry.
Last but not least:
13. 15% of small businesses have stated that they outsource their payroll.
Larger organizations are less likely to outsource their payroll than small organizations. As per the payroll outsourcing statistics in 2019, 15% of small organizations with less than 2,500 employees and only 8% with more than 10,000 employees stated that they outsource their payroll.
Outsourcing is one of the many ways companies try to stay competitive, as proven by the outsourcing statistics by year. It’s also an excellent way for companies to find top-quality talent at affordable rates.
Outsourcing manufacturing in Canada as well as other industries, such as technology, has shown to be a profitable way to make it in business.
There are plenty of Canada companies outsourcing to India, China, and Eastern Europe, where the workforce is less expensive. This is all in accordance with Canadian Federal Law, and the Great White North is reaping the benefits.
Outsourcing has been around in Canada for many years. Even though it has developed a negative reputation in recent years, overall, it is very beneficial for the Canadian economy. This is especially the case for startups.
According to the latest outsourcing in Canada statistics, US companies are at the top. This is known as nearshoring and is due to the geographical proximity as well as the similarities in law, political stability, business culture, and language.
Outsourcing is very common, particularly in the US. Around 68% of the larger companies in the US are outsourcing some portion of their labour force. According to recent outsourcing statistics, the country is the third-largest supplier of online and freelance workers.
The latest trends in outsourcing are digital services that provide more agility, automation, and diversity. For example, services that are now performed by people in the future will be automated.