Outsourcing has seen tremendous growth in recent years. At the height of the COVID-19 pandemic, many businesses decided to outsource their various business functions like customer service, call center services, back office operations, and others, for safety protocols and social distancing. As of 2019, the global outsourcing market was valued at $92.5 billion and is projected to reach $435 billion by 2028.
BPO companies need to keep up with the growing trend if they want to continue offering their services and grow their business. In this article, we take a look at the different trends that will shape the outsourcing industry now and in the future.
10 Trends That Will Shape The Outsourcing Industry
- Rise of the Virtual Workplace
- Popularity of Cloud Computing
- Adoption of AI Technology and RPA
- Enhanced Focus on Strategic Partnerships
- Stricter Cybersecurity Protocols
- Increased Demand For Building Global Teams
- Growth of Progressive Web Apps
- Preference for Omnichannel
- Increased Staff Upskilling
- Hiring Niche Talent
10 Trends That Will Shape The Outsourcing Industry
Outsourcing offers businesses a wide range of benefits that can give them a competitive edge. It frees them up from spending on huge operational costs and becomes flexible with their staffing requirements. With these benefits, more businesses are choosing to outsource some of their functions. Data shows that businesses are expected to spend more than $700 billion annually on outsourcing by the end of 2022.
Outsourcing is a dynamic sector. Its growth has been buoyed by various trends that can shape its future. Let us take a look at these trends.
1. Rise of The Virtual Workplace
According to Statista, 17% of US employees did remote work 5 days or more a week. This number increased to 44% at the height of the COVID-19 outbreak. The availability of project management tools has made it easier for managers to monitor team members in real time. Although remote work during the pandemic was designed for the safety of workers, 70% of employees now prefer to work in a remote setup even after the dust of COVID-19 has settled.
Thanks to technological advancements and cloud infrastructure, businesses can now easily execute their workflow anytime and anywhere. According to a 2022 study by SCIKEY, 64% of employees said that they are more productive working remotely and feel less stressed. This makes outsourcing a smart business choice.
Remote work offers a lot of benefits for businesses such as reduced operational costs, more productive employees, and reduced turnover rates. Knowing these benefits, a study by Global Workplace Analytics revealed that 37% of remote employees would take a 10% pay cut just to continue working from home.
2. Popularity of Cloud Computing
The market for cloud services will continue to grow as more telecommunication companies rely on virtual networking. Data reveals that 70% of businesses are already using cloud services and plan to expand their cloud computing investments in the future. A 2022 Cloudwards survey revealed that the market for cloud services will reach $832.1 billion by 2025.
With cloud computing, users can easily access files and data without waiting too long. In addition, it eliminates the need for businesses to invest in traditional data storage hardware resulting in reduced maintenance costs. Moreover, cloud-based applications are useful for collaborative and real-time work.
Cloud computing will also be essential for using other modern technologies. It offers flexibility and expandability making it a valuable outsourcing tool. It allows easy sharing of information as it is always available to users. Cloud technology empowers businesses to collect and store resources on the cloud and access services.
3. Adoption of AI and RPA
In the last few years, we have seen growth in the adoption of artificial intelligence and robotic process automation. These technologies have enhanced productivity and efficiency at a lower cost while maintaining maximum quality. Instead of using humans for repeating work profiles, companies now use robots or other computer programs.
Interactive voice response or IVR is an example of artificial intelligence in the customer service field. The chatbot provides basic information to the customer while connecting them to the human call center executive. The demand for AI and RPA has increased as companies realized that they can save money by automating repetitive tasks and leaving critical tasks to humans.
As of 2021, the AI and RPA market was at $93.5 billion and is expected to grow at a compound annual growth rate of 38.1% from 2022 to 2030. It will continue to be the key focus of outsourcing companies and the trend is expected to continue in the near future.
4. Enhanced Focus on Strategic Partnerships
Today, we see outsourcing partners sharing in the decision-making process while providing support services for non-core business functions. Aside from their usual services, providers now complement each other in other areas of business operations such as risk assessment and strategic planning.
Strategic partnerships allow businesses to maximize their internal capital without expending more resources than needed. It opens up doors to new paths of thinking, techniques, strategies, and tools. The partners offer complementary expertise to each other which helps expedite their respective growths. Strategic partnerships open up access to new customers as well as opportunities to reach new markets.
According to BPI Network, 57% of organizations use partnerships to acquire new customers and 44% to get new ideas, insights, and innovations. Strategic partnerships help businesses meet and work with new people who could help them with business growth.
5. Stricter Cybersecurity Protocols
Clearly the biggest threat to outsourcing is cybersecurity. Over the years, we have seen an increase in the rate of cyberattacks resulting in the loss of sensitive information and data breach in many companies. Cyber attacks have been ranked as the fifth top-rated risk in 2020. According to the World Economic Forum’s 2020 Global Risk Report, the rate of detection or prosecution is as low as 0.05 percent in the US.
For this reason, outsourcing companies need to beef up their cybersecurity protocols to ensure the safety of customer data. But managing an in-house cybersecurity team can be difficult. This is where outsourcing IT support will come in handy. A Managed Service Provider or MSP specializes in data security. As per Statista, MSPs were valued at $15.02 billion in 2020 and are expected to grow to $274 billion by 2026.
MSPs are knowledgeable about security protocols such as GDPR, HIPAA, and PCI which they can implement on your server. They can also conduct regular updates and review of your security measures and are essential for managing clients’ data safely and securely.
6. Increased Demand For Building Global Teams
The COVID-19 pandemic has brought about recruitment challenges for most organizations. As many countries closed down their borders, businesses need to become agile to stay competitive. This has paved the way for a greater demand for global teams. According to Deloitte’s 2021 Global Outsourcing Survey, the coronavirus outbreak and the corresponding lockdowns prompted many businesses to become flexible with their work. This trend is expected to continue beyond 2022.
More companies are now welcoming the idea of building global teams to increase brand awareness and expand their talent pool. This allows them to remain competitive against other businesses in their market. Outsourcing work allowed them to serve all their customers and sustain their operations.
Having a geographically diverse workforce offers businesses greater support and functional expertise. Aside from that, it allows employees to grow their networks, further increasing their job satisfaction. In addition, they can cut back on costs such as rent, utilities, and other expenses.
7. Growth of Progressive Web Apps
In recent years, we have also seen growth in the usage of progressive web apps or PWAs. This technology combines a website and a mobile application. Research estimates that the market for PWAs will reach $10.77 billion by 2027. Progressive web apps have proven helpful for BPOs in running their operations.
PWAs solve the problem of some applications taking too much time to load. They allow you to save the home web page to your home screen like a regular application without having to download or install an app. PWAs work on any device and are effective even on poor network connections. Most businesses prefer PWAs because they are efficient and convenient for customers.
Studies show that an app loses 20% of its users for every step between first contact with the app and when the user starts to use it. The user will need to search for the app in Google Play or App Store, download and install it, and open it. With a PWA, users can immediately start using the app without having to download or install it. This results in improved user retention and performance.
8. Preference for Omnichannel
Omnichannel solutions have long been utilized by businesses for improving their customer experience. A study by Harvard Business Review revealed that 73% of consumers prefer shopping through multiple channels. In addition, as many as 85% of digital consumers start buying on one device and finish it on another.
Omnichannel solutions allow businesses to reach customers at various touchpoints. It helps improve the customer experience and also provides companies with data for improving products and services to ensure customer satisfaction. Omnichannel marketing may include traditional and digital channels, point-of-sale, and physical and online experiences.
When done right, omnichannel marketing can help boost customer loyalty. It provides value and helps strengthen customer trust. In addition, it improves brand recall as customers will see your brand on different platforms and devices. The end result is increased revenue due to repeat purchases.
9. Increased Staff Upskilling
Technology is constantly evolving and businesses need to keep up with these developments. Organizations see the need to invest in training and development. They now see the importance of employee specialization in the latest tools. Outsourcing firms must invest in upskilling their workers. As new technology continues to evolve, the demand for new skills increases as well.
Just how important is upskilling for your employees? In a recent study, Gartner found out that there is a huge skill gap problem and that 58% of employees need new skills to do their jobs successfully. In addition, the World Economic Forum in its 2021 report emphasized the economic imperative of upskilling.
Upskilling the skills of your employees can boost employee engagement and retention. According to Gallup, the top reason why employees leave their roles is due to a perceived lack of growth opportunities. In addition, it can be cost saving because it is more costly to replace an employee than to retain one.
10. Hiring Niche Talent
According to a 2021 Gartner survey, the shortage of talent specializing in new technology has made it difficult for businesses to adopt 64% of modern technology in fields like network and security. This shortage is backed up by a 2022 ManpowerGroup survey, which found that 75% of employers find it hard to find talent in the US.
However, since upskilling your in-house team can be time-consuming, your best option is to outsource to a provider who specializes in niche talents. This will allow your business to access the expertise that you lack in-house. Niche talents can help you fill up specialized roles such as software development, content writing, web development, and others.
When hiring niche talents, it is best to focus on attributes over skills. This will enable you to retain and train talents. Look for someone who has the initiative and an appetite for expanding their knowledge. These are the individuals who may not only provide the niche skill you need to fill up now but also in the future.
Outsourcing is a fast-paced industry that businesses need to keep up with if they want to stand out and stay competitive. These trends can have a huge impact on how you will conduct your business now and in the future.
Why does airisX Outsourcing Make Sense?
airisX is your collaborative partner, not just a vendor of services. We offer transformational growth through our highly skilled architects and innovators. Our success is measured by your growth and not our revenue numbers alone. Learn about our proven track record.
Outsourcing allows you, as a business, to focus on your main competencies and operations and forget the hassle of sharp learning curves when the task falls outside your company’s core area of business.
By outsourcing to a leader like airisX, you will be able to scale up quickly by getting the right resources, processes and technological infrastructure. No matter what your scaling requirements are, airisX will give you the best optimized solution and you will be able to focus on satisfying your customers. Your back office operations will be simplified, giving your users a high-quality experience. Contact us at contact@airisx.com to receive a customized solution for your business.