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Outsourcing Of Business – Key Statistics

Outsourcing statistics have for many years shown the outsourcing of business is an increasing trend among companies in the US and other Western nations. However, it is since the 1990s that the outsourcing market has grown tremendously. Of course this has also generated a lot of political heat with debates on what outsourcing really means for developed economies and whether it really is for the benefit of their workforce as a whole. Outlined below are some interesting outsourcing statistics.

Outsourcing of business is most significant in the Information Technology industry. In the global outsourcing market, IT takes the lead at 28% of the total outsourcing market. This primarily came about due to the shortage of e- business application developmental skills in developed markets which made it expensive to hire skilled personnel. The Human Resources industry is another increasingly outsourced business process taking   15% share of all outsourced processes. It is closely followed by sales and marketing outsourcing which is at 11%. The remaining fields make up the remaining 32%.

Multinational companies are currently taking the lead in outsourcing. The most popular countries are India, The Philippines and China.

Despite the positive statistics described above, there are various problems that accompany outsourcing. Outsourcing of business in foreign countries may lead to geographical problems such as language barrier, labor laws that govern that particular country, political upheaval as well as cultural issues. With such problems being encountered, outsourcing may be hindered.

Before settling on an offshore destination for your outsourcing needs, it is advisable to consider some of the key factors that are affecting the particular country. Some countries may be hindered by poor communication infrastructure, low power generation capability as well as poor disaster preparedness. It is also advisable to look into past statistics of offshore outsourcing as well as past success stories of an outsourced project.

In 2006, studies showed that outsourcing activities made up for jobs worth $ 1.2 trillion annually. Economists are forecasting that by 2015, at least 3.3 million U.S jobs and salaries amounting to $136 billion will be moved to developing Asian and African economies. This will come as a result of inexpensive labor markets in the developing countries.

In the US, analysts have concluded that outsourcing of business is the biggest contributor to the current economic recession. The statistics have also shown that the high rate of outsourcing has greatly contributed to the recession. For this reason, the U.S could not offer alternative job opportunities for the laid off workers. This has come to be known as over- outsourcing.

Daven Michaels Author of the book Outsource This!

13 Responses to “Outsourcing Of Business – Key Statistics”

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