Why do many companies choose BPO services to take care of specialized tasks? The 10 BPO service statistics from 2021 will reveal reasons, some interesting BPO trends, and the outlook for the outsourcing industry in 2022.
1. How the Covid 19 pandemic affected BPO services
According to a 2020 Boston Consulting Group (BCG) survey of 200 global outsourcing companies, most of them faced operational BPO challenges, revenue declines and struggled with service provider challenges during the Covid pandemic.
However, IT has grown thanks to the digital transformation tremendously, and companies have hired BPO services to help promote their businesses online.
The IT departments of many large corporations increased their outsourcing budget from 12.7% in 2019 to 13.6% in 2020, according to Computer Economics’ IT Outsourcing Statistics 2020/2021.
In addition, based on a global IT outsourcing market study, the industry is expected to grow by $98 billion by 2024, with a Compound Annual Growth Rate (CAGR) of 5%.
2. Outsourcing cost
According to Deloitte’s 2020 BPO service statistics, 70% of businesses switched to outsourcing partners to reduce costs. Some other BPO service statistics include:
- In the Philippines, the average salary for professionals in outsourced positions is $8,300 annually.
- In China, the salary for professionals starts at $7,815 for an IT position. It’s compared to an average of $9,723 in India and $82,000 in the US.
- In Southeast Asia and South America, call center prices to range from $8 to $18/hour per representative, while it ranges between $25 and $65/hour in the US.
However, many companies believe that cost is not the decisive factor. Up to 49% of companies affirmed that freeing resources to focus on core tasks is one of the most crucial factors supporting outsourcing.
3. Cloud services help improve outsourcing
Most global outsourcing activities are geared towards cloud computing as it supports the digital transformation of businesses.
- Interesting BPO service statistics, according to Gartner’s prediction, the total cloud market value will grow to $331 billion by 2022.
- And once cloud computing evolves, companies providing IT services, including servers and software outsourcing, will thrive.
4. The expected growth of BPO services
Based on a Grand View Research study in 2022, the global BPO service market share is estimated to reach USD 525.2 billion by 2030, registering a CAGR of 9.1% over the forecast period (2022-2030). This market includes sectors such as healthcare, retail, and banking.
In 2017, a KPMG study found that the US accounted for 85% of global business outsourcing deals. According to Statista, Business Process Outsourcing was expected to generate an estimated $113 billion in the US in 2021.
China (one of the top outsourcing destinations) will reach a BPO service market volume of $28.5 billion by 2025.
According to LSE, the Philippines had the most extensive inbound outsourcing. It contributed up to $26 billion from BPO services to the economy in 2019.
Overall, the global BPO total contract value increased by 251% in 2021 from 2020, based on an HSF market analysis. Telecommunications, banking, finance, and public sectors attracted the most traction.
Therefore, we expect BPO services from these fields to grow more in 2022.
5. Small businesses hire outsourcing services
According to a Clutch survey in 2021, 80% of small businesses planned to outsource in 2021 to improve efficiency and access to resources.
On top of all, 26% of smaller companies having less than ten employees used BPO services as an opportunity to learn from experts.
This survey also brought up other exciting BPO service statistics:
- 27% of small businesses planned to outsource their IT functions.
- 23% of companies will outsource financial activities.
- 21% are looking for legal services outsourcing.
- 20% will use the BPO service for digital marketing.
- 18% of small companies will outsource development tasks.
- 10% intended to outsource HR activities.
6. Financial outsourcing services are thriving
In 2021, one of the BPO service statistics from the global financial outsourcing market was estimated to be worth more than $130 billion.
The banking sector outsourced about 40% of its help desk positions. Additionally, in 2019, more than 85% of clients were willing to pay extra for these concierge services.
The US BPO service statistics also indicated that outsourcing financial services will grow by 7.5% annually.
The increase in financial outsourcing services mainly comes from the efficiency of third-party professionals. BPO service helps reduce staff training costs, eliminates the need to invest in expensive accounting software, and minimizes efforts to hire new talent.
7. The lack of tech talent
According to the International Data Corporation (IDC), information technology is one of the largest sectors, with a market value of $5 trillion in 2020. However, this field is facing a massive shortage of talent.
A BPO service statistics in ManpowerGroup 2020 Talent Shortage report showed that 54% of companies worldwide, including technology companies, have reported a shortage of tech professionals.
According to another Gartner 2021 report, 75% of business leaders believed talent availability is a significant risk factor in IT and technology businesses.
By 2030, we will lack more than 85 million technical workers (consulting firm Korn Ferry). It will risk losing about $8.5 trillion in revenue.
Below are some countries with a shortage of tech talent:
- Israel, the leading start-up country, lacks 15% of developers.
- The US has a 72% shortfall of tech talents while trying to fill its 1.4 million tech vacancies open in 2020.
- Up to 67% of UK digital leaders say their tech staff has a skills shortage.
- Stockholm, the tech capital of Europe, will lack 70,000 tech talent by 2024, along with other Nordic countries such as Norway, Denmark, and Finland.
This shortage also means that the IT BPO services will grow slowly due to the lack of tech talent.
8. Managed service providers need
While digital transformation worldwide brings many benefits, it is also vulnerable to cybersecurity attacks.
Another BPO service statistics, according to research from Ponemon Institute in 2020, cybersecurity was the top concern of 68% of outsourcing companies that plan to integrate with cloud technology.
Syntax survey also revealed that more than 77% of IT leaders had faced frequent cyberattacks since March 2020. Out of 500 IT decision-makers surveyed, 83% planned to move from in-house security teams to a managed service provider (MSP).
An MSP is a third-party company that remotely manages IT infrastructure and end-user systems for businesses. It provides specialized services for network, application, and data security, ensuring the smooth running of systems by keeping them secure and up to date.
One of the BPO service statistics from Syntax survey revealed that more than half of leaders were willing to invest more than 40% of the total IT budget in improving cybersecurity via MSPs.
Allied Marketing Research also estimates that the MSP outsourcing market will reach about $41 billion by 2022. The 2020 HLB Cyber Security Report showed that most cyberattacks targeted governments, making them significant investors in cybersecurity.
9. The investment in AI, chatbots, and robotic process automation
Juniper Research predicts that AI chatbots will successfully drive 90% of customer interactions in the banking sector in 2022.
Also, according to an annual Deloitte global survey in 2021, 73% of respondents said that their companies had adopted intelligent automation, such as robotic process automation (RPA), to automate different processes.
The automation trend is also happening in HR outsourcing companies and HR BPO services where bots automate processes, including:
- Source candidates
- Schedule an interview.
- Manage payroll.
PwC’s Global Artificial Intelligence Study forecasts that the global AI market will contribute $15.7 trillion to the global economy by 2030. So, AI technology will play a significant role in IT outsourcing.
10. Customer Care BPO Service
Despite Covid 19, companies saw call centers increase by 14% in 2020. According to Morph Networks, more than 50% of all businesses have used the customer support service to improve customer experience in 2021.
Besides, businesses can save up to 70% of customer service costs by outsourcing customer support call centers.
StrategyR’s market research in 2020 stated that the global call center market share is expected to reach a valuation of $607.6 billion by 2027 – growing at a CAGR of 6%.
Call centers remain a vital player in the customer service outsourcing industry.
Based on the 10 BPO service statistics above, BPO service providers will have a vast future development space. It is both an opportunity and a challenge for outsourcing businesses to find and retain clients.
(Feb 23, 2021). Most of global outsourcing companies faced operational BPO challenges. BCG. https://www.bcg.com/publications/2021/post-pandemic-outsourcing-strategies-for-ceos
(Mar 31, 2020). IT outsourcing market is expected to grow by $98 billion by 2024. GlobeNewswire. https://www.globenewswire.com/news-release/2020/03/31/2009159/0/en/The-Global-It-Outsourcing-Market-is-expected-to-grow-by-USD-98-bn-during-2020-2024-progressing-at-a-CAGR-of-5-during-the-forecast-period.html
(2020). 70% of businesses switched to outsourcing partners to reduce costs. Deloitte. https://www2.deloitte.com/content/dam/Deloitte/se/Documents/technology/gx-2020-global-outsourcing-survey-how-much-disruption.pdf
(Apr 2, 2019). The total cloud market value will grow to $331 billion by 2022. Gartner. https://www.gartner.com/en/newsroom/press-releases/2019-04-02-gartner-forecasts-worldwide-public-cloud-revenue-to-g
(2017). The US accounted for 85% of global business outsourcing deals. KPMG. https://assets.kpmg/content/dam/kpmg/in/pdf/2018/05/KPMG-Deal-Tracker-2017.pdf
(Sep 22nd, 2020). The Philippines had the most extensive inbound outsourcing. LSE. https://blogs.lse.ac.uk/seac/2020/09/22/covid-19-and-the-philippines-outsourcing-industry/
(Oct 8, 2021). The global BPO total contract value increased by 251% in 2021 from 2020. HFS. https://www.hfsresearch.com/research/itms-and-bpo-contract-analysis-q2-2021/
(Jan 21, 2021). 80% of small businesses planned to outsource in 2021 to improve efficiency and access to resources. Clutch. https://clutch.co/benefits-outsourcing-small-businesses
(Feb 09, 2022). In 2021, the global financial outsourcing market was estimated to be worth more than $130 billion. Fortunly. https://fortunly.com/statistics/outsourcing-statistics/
(Feb 09, 2022). Outsourcing financial services will grow by 7.5% annually. Fortunly. https://fortunly.com/statistics/outsourcing-statistics/
(Sep 13, 2021). 75% of business leaders believed talent availability is a significant risk factor in IT and technology businesses. Gartner. https://www.gartner.com/en/newsroom/press-releases/2021-09-13-gartner-survey-reveals-talent-shortages-as-biggest-barrier-to-emerging-technologies-adoption
(Dec 17, 2020). Israel, the leading start-up country, lacks 15% of developers. DAXX. https://www.daxx.com/blog/development-trends/it-outsourcing-trends
(2021). Up to 67% of UK digital leaders say their tech staff has a skills shortage. Nash Squared. https://www.nashsquared.com/dlr-2022
(May 11, 2022). Stockholm will lack 70,000 tech talent by 2024, along with other Nordic countries such as Norway, Denmark, and Finland. The Fintech Times. https://thefintechtimes.com/tech-industry-talent-shortage-could-reach-an-unrealised-output-of-449-70billion-globally-by-2030/
(March 15, 2021). More than 50% of all businesses have used the customer support service to improve customer experience in 2021. PwC. https://www.pwc.com/gx/en/issues/data-and-analytics/publications/artificial-intelligence-study.html