2020 and 2021 are years that we will certainly never forget; regarding the financial and economic climate, it was a period of intense uncertainty and even demise for some industries. One of the few sectors left unscathed and left afloat was the outsourcing industry. One might even say that with companies offering more work-from-home options (44% of US employees are now working remotely), the OC sector saw an opportunity itself as a remedy. Furthermore, many companies suffered financial losses from the crisis and therefore sought out ways to reduce spending. A feasible and obvious option was to shift tasks typically done in-house (such as social media marketing) to a knowledgeable and skill-specific outsourcing company.
Long gone are the days of outsourcing equating to call centers with clunky headsets and telemarketers ringing you during dinnertime. Now companies are assigning essential work to outsourcing companies. Around 300,000 jobs are already outsourced by the US annually, and that number is projected to rise. In 2019 Statista stated that global outsourcing reached $92.5 billion, with some studies designating that number even higher at $388.65 billion. Contributing to the sky-rocketing profits was brought on by industries like healthcare, IT, Fintech, and even HR entering into the outsourcing arena.
Outsourcing in a Post Pandemic World
Indeed, the world will never be the same. The way we socialize, travel, and communicate is forever changed, which also goes for how we do business. Outsourcing companies adapted swiftly to the new measures and hurdles brought on by the devastating coronavirus.
There has been a lot of news about outsourcing this past year, as the industry was unwavering while others collapsed, owing to its flexible, diverse, and affordable nature. Outsourcing companies already had the tools and technology for remote work and delivery, affording a stable and secure year. In addition, many companies observed that work deemed necessary to be done in the office was easily adaptable and even cost-efficient to be performed remotely. For example, past in-house duties like social media marketing were instead outsourced by 49% of companies, with a staggering 86% outsourcing its content creation. Social media is no longer just about likes and catching up with high school buddies to drive home this point: $27 billion were spent by customers in 2020 alone through links from social media platforms.
Along with the pandemic and increase of chronic illnesses emerged the need for more medical technology to handle the data and monitoring of patients and disease spread. The medical technology industry was estimated at $10 trillion this past year, as social distancing was of utmost importance. These telehealth services provided doctors and healthcare companies a safe distance whilst attending to the needs of patients.
Trends in Outsourcing
Undoubtedly, outsourcing has become a vital part of any company’s success - and not just for the big ones. Now 37% of small to medium enterprises (SME) also outsource, with 80% saying they plan to in the future. One of the reasons many startups fail is due to a lack of experience, resources, funding, and burnout. Hiring an outsourcing company is an affordable option to secure a steady footing and solid foundation for fledgling startups. Another surprise in outsourcing news is the introduction of European countries into the typically Asian-centric outsourcing industry. While China and India are still the leaders in the field, Eastern European countries like Ukraine have seen a recent boom in OC, given its tech-savvy culture and technological infrastructure.
Quality v Quantity
Without a doubt, companies are interested and always looking for ways to save. Outsourcing is an affordable option, but a recent emphasis on quality and not just quantity has taken precedence. A stronger focus on the customer and fewer pre-determined contracts will be fruitful for company and client alike: clients will ensure a happier and more loyal consumer, and outsourcing companies will build loyalty and rapport. Moreover, a multi-vendor approach has become increasingly common instead of enlisting just one outsourcing company to handle the entire workload. Reversely many outsourcing companies are picking up the practice of “co-sourcing,” where two or more OC come together to manage one client’s requirements.
Safe And Sound
As Fintech continues to dominate the way we handle money, an increased necessity for security has exploded. A high-caliber cybersecurity system is necessary to manage the 3 billion online banking users, and outsourcing companies are ready to meet the demand. The OC can partner with Blockchain and AI to safeguard client data and make B2B and B2C transactions risk-free. The coming years will witness continued hyper-focus on encryption and protection, while stricter laws and compliances for the Fintech sector will continue to tighten. Outsourcing could be a huge player in this, as the new security tech equipment budget has garnered a $30 billion increase.
As the world grows more dependent and interlinked with technology, the need for designers and developers will also rise. These jobs will likely double in upcoming years, as over 58% of companies report already implementing RPA (robotic process automation) and using AI systems. Before the robots really take over, we need the humans to build, operate, and maintain them. Cloud-based ecosystems integral to information collection and sharing will likewise still require human oversight: this expanding venture will likely be farmed out to outsourcing companies who, again, can handle large amounts of work, data, and requisitions.
Outsourcing has proven vital for a business's success and is more than a mere trend for simple procedures. Outcome-based contracts and focus on the customer are highlighted positive trends in outsourcing from this past year. The future will continue to shift and shape around us, but it's easy to say outsourcing has stood the test of time and is here to stay.