Interesting Outsourcing Trends From 2022 to Watch in 2023

Outsourcing has impacted the corporate landscape drastically over the last few years. As a business leader, you need to understand and learn more about changing work cultures and the contribution outsourcing has made. The core reasons behind the swift increase in the number of firms outsourcing services are the benefits it provides, such as cost savings, access to a wide range of resources and technologies, efficiency and better time management.  The Covid pandemic posed many challenges for companies to maintain and run themselves amid health threats, as well as government regulations.

During the pandemic, most firms shifted to a remote working model to combat the situation and continue functioning. Hiring remote staff or a team and running it from any part of a country or the world with the help of technology became a norm for many companies, and that continues to be the case even today, given the many benefits. Similarly, outsourcing services from another country or city has also been coming to the fore. It has opened an employment avenue for people with the needed skills, which they can explore and learn while working on different projects. When working for international clients, an outsourced employee gets to experience and work with some of the top firms worldwide and explore their potential.

New opportunities also present themselves when businesses consider outsourcing as it gives them access to new talent, technology, and a knowledge base. Some common services which are now being handed over by business owners to a third party are IT services, legal process services, HR services, business process services, and accounting and finance services.

Outsourcing services to India was not foreign before the pandemic, but it has certainly scaled up in recent years given the fact that the Indian workforce has all the prerequisites required for work with international clients. It goes without saying that outsourcing as a practice is here to stay across industries as it has helped companies grow and maintain their in-house as well outsourced teams simultaneously.

With the new year setting upon us, it’s time to shed light on some of the major trends noticed in outsourcing.

1. Nearshore over far shore

Outsourcing opens up doors for firms to hire internationally and has no geographical limitations. However, the current trend shows that companies prefer hiring a team that is nearer to them in distance in order to avoid certain time-zone difficulties, cultural barriers and legal compliance issues that may arise when services are outsourced far shore.

2. Sourcing top specialist talent

Companies may have access to skilled resources and talent that is local but they prefer to outsource services due to cheaper costs and an easy hiring process. However, recent trends shows that business owners are now making a conscious choice to outsource only niche talent.

Services that might be difficult for them to find locally and skilled techniques that only a few experts can provide would be on the top of the list of outsourced talent. These include tech-focused tasks, language-oriented tasks (which cannot be provided with resources from another country), and time-consuming tasks that need expert training.

3. Maintaining business continuity

This is an interesting trend that we will be witnessing this year. Companies and individuals now tend to opt for fewer outsourcing partners and stick to the ones that have worked well for them previously. Changing partners frequently affects the coordination and productivity of a team and also costs employers time and money. Business relationships based on trust, work history and credibility will continue to thrive as opposed to companies exploring new options for their services.

4. The need for advanced technology

As technology continues to evolve at lightning speed, it is likely that in 2023 there will be a trend toward outsourcing services that aren’t considered traditional.  Services such as cloud computing, machine learning and automation will be given priority for outsourcing.

5. Focus on flexibility

Companies have started focusing on flexibility. They expect agile processes and adaptability to quickly overcome obstacles. Basically, as some countries continue to push for a shorter work week for their employees, employers will be on the lookout for people who can work flexibly and take responsibility for tackling crises. Surveillance software will help employers monitor productivity and work hours while affording employees the much-needed flexibility to remain productive and independent.

6. Demanding better cyber security

According to a survey conducted by Forbes, 82% of companies faced cyberattacks in 2022. Since managing an in-house cyber security team can be costly and challenging, companies are choosing to hire a managed service provider (MSP). An MSP is a third-party service provider that manages a specialized operation like data security.

7. Increased outsourcing in start-ups and small businesses

As the latest data suggested, 90% of small businesses in the US plan to outsource a business process in 2022, which is a 10% increase from 2021. This is expected to continue in 2023 due to the wide range of services and resources that are now available to small businesses through outsourcing. It not only saves these businesses money and time but also gives them professional and accurate results, which contributes to their rapid growth.

8. Customer service and experience

All data from previous years points to a growing emphasis on customer experience and satisfaction. Businesses today realize the importance of investing in customer support and social media. Building customer relationships and ensuring their satisfaction through communication and feedback go a long way in building a brand. This is yet another field where companies prefer outsourcing, given the nature of the work. It can be easily executed by an external team that is dedicated and concentrates solely on building customer relations.

Apart from the above-mentioned trends, a general understanding of current work cultures tells us that people prefer to work remotely. According to a 2022 study on remote work by SCIKEY, 82% of respondents prefer working from home. It saves them money and time and has proven to be a more productive approach. Hence, outsourcing your services to outside vendors is likely to bring you positive results.

Lastly, maintaining transparency in the workflow has been seen as a crucial trend that is likely to continue this year. It has become absolutely critical for parties to communicate and regularly share information/progress with one another with the help of file/data-sharing software.

It’s safe to assume that outsourcing has worked well for industries when it has been practiced with caution and in a well-structured way. It has the potential to mutually benefit the parties involved and help them thrive economically as well.