Outsourcing was initially accepted as a business tactic in the late 1980s and became a staple in business development during the 1990s. Outsourcing is the large-scale business practice of hiring a third party team or company to perform services that are traditionally performed in-house. Companies usually perform this practice as a cost-cutting measure. It can include a wide range of positions and functions, from customer support to software development, design, or human resource services. Although companies primarily use outsourcing to reduce their overall labor costs, including salaries, insurance, tools, supplies, and technology, the game has changed. New trends in outsourcing have emerged, and the focus has shifted from budget-friendly aspects to other important areas and practices. The outsourcing trends for 2021 look promising, and the entire industry is on the right track.
Why do companies outsource
Companies choose to outsource for various reasons. Outsourcing, as an increasingly common practice, has many advantages.
For example, the main benefits of outsourcing often cover:
- high performance
- conversion capacity
- Focus on core competencies
- Access to more skills and experience
- Flexibility amplification
- Scalability and growth
- Faster time to market
- Infrastructure Advantages
New trends, practices, and approaches to outsourcing are yet to come.
How has outsourcing evolved?
The 1980s brought more than 25 cents of candy bars, notepads, and royal weddings. Newly developed business practices accompanied great poetry, unconventional music, and recognizable fashion. It was these years that outsourcing was born.
The Industrial Revolution is beginning to lead to outsourcing as we know it. In the 1980s, companies turned to outsourcing accounting and payroll. And before we could hit play to listen to Another One Bites the Dust, the sourcing process evolved.
Nowadays, we have a whole host of possibilities and reasons to consider and incorporate this practice. Call centers, similar customer care services, software development, and human resources are just some of the jobs and functions that are most commonly outsourced.
In 2020 and 2021, we could witness a whole new world of outsourcing trends.
Outsourcing trends and statistics
For nearly two years, the global market for outsourcing has been close to $100 billion. The outsourcing industry has huge gains and is constantly growing. In 2017, tech talent outsourcing revenue in India alone was $154 billion. The US market has reached even higher amounts. The trend indicates that these numbers are on the rise.
In 2021, the outsourcing industry will reach a new level and gain more attention and popularity all over the world. Taking into account the global changes brought about by 2020, the outsourcing trends for 2021 will include more improvements, more technological advancement, more flexibility and globalization.
Distance working It is becoming the new normal, and even once the pandemic is over, it is safe to assume that the majority of companies will remain supportive of this type of hiring. In addition, outsourcing and its franchises related to finance will determine business practices and strategies in 2021. The consequences of COVID-19 will be felt in the global economy in the coming year, which will cause organizations to question the safest and most secure. Cost effective ways to grow, expand and advance.
There are various techniques to make a mark in today’s business landscape and gain Competitive advantage. Companies aim to penetrate the market and get ahead of the game by using outsourcing partnerships. Choosing the right outsourcing company can have an enormous positive impact from many angles and perspectives. New outsourcing trends contribute to enhanced business practices and improved results. Some current trends and tendencies will remain relevant in 2021.
The major shift that has changed the way organizations understand outsourcing is the shift from delegating small tasks to outsourcing more core functions. Besides recognizing the many financial benefits of outsourcing, companies are beginning to assign more core tasks and areas to trusted external partners. By outsourcing cutting edge processes, companies achieve more. They gain new knowledge and better results quickly.
people before finance
In 2021, the focus on operations and people will be more important than price. Price-driven partnerships are a thing of the past. Perhaps the most important outsourcing trend for 2021 will be to stay in touch with the real needs of employees and customers. Outsourcing companies will change their approach and drive their work by emphasizing the processes and people involved.
Quality before quantity
One of the most frequently mentioned disadvantages of outsourcing is its focus on quantity and being strictly profit oriented. Now, results and quality play a more valuable role. Focusing on high standards and optimum results is the trend that will rank outsourcing as favorable and efficient in 2021 as well.
More focus on customer experience
In 2021, customers will become more demanding. In other words, companies are constantly innovating new tactics and solutions to provide excellent customer care. However, this vital part will require more attention and dedication in the following years. With customer expectations rising, companies must invest in customer support teams. First, happy customers are more likely to recommend your brand and make customer acquisition easier. They boost your visibility and reliability by leaving positive reviews and testimonials.
Second, content customers who have a great experience when interacting with your representatives are more loyal. Third, a superior customer experience increases the customer’s lifetime value and leads to significant gains in the long run.
Most importantly, dedicating customer support service to a trusted company is one of the leading outsourcing trends in 2021.
Discover new promising areas
The regions and countries that are usually chosen to find suitable business partners for outsourcing change. Nowadays, Europe seems to present an ever more attractive talent pool. India and Latin America, the primarily favored regions and outsourcing paradises, are slowly falling from their thrones and making way for new talent. The best countries to outsource and more successful trading partners to meet are now located in the old continent.
The European market is thriving, diversified and thriving. Outsourcing to a European country brings talent on board with a strong work ethic and culture. Highly qualified and educated experts, excellent English language skills and a great quality-to-price ratio make Europe the prime location for establishing business relations.
Outsourcing is beneficial for startups
Outsourcing is used to represent franchise owned by well-established companies and brands. Now, there is a new wave. Surveys showed that in 2019. There were more than 50% of small businesses planning to outsource. Today, more than ever, small businesses and startups are exploring and emphasizing the many advantages of outsourcing. More and more early stage companies are considering collaborating with a third party team to overcome operational inefficiencies and enhance their time in the market. Starting from scratch usually entails the need to be extra careful about many things. New business owners must constantly think about the budget.
They focus on structuring and conducting recruitment processes, defining and enhancing the employer brand, keeping employees happy, and finding clients or customers. All at once. Focusing on all of these responsibilities can turn into a hindrance when providing a high-quality product or service. In-house teams wouldn’t be able to achieve all of this without some outside help and extra competence. These exact reasons helped small businesses and startups discover the benefits of partnering with a credible and skilled outsourcing company.
Customized outsourcing contracts
In 2020, there are fewer pre-defined contracts, and use of these fixed agreements will continue to decline. Additionally, custom outsourcing agreements reduce the cost pressures and constraints faced by many companies that choose to outsource. Customs contracts allow both parties to achieve a reciprocal arrangement. Assists in communicating and negotiating prices, scope of work, duties, specific commitments and delivery. It enhances flexibility and mutual trust and reduces misunderstanding, overpayment and unsatisfactory results. Custom contracts undoubtedly represent a mainstream outsourcing trend for 2021.
The post-pandemic world and new trends for outsourcing
What will happen in 2020 will not continue in part in 2020. And by that, we mean the good stuff.
Beneficial and innovative trends will carry over with us until 2021. The future of outsourcing will be in good hands due to the transformations and movements we have seen over the past few years. And over the past few months, it’s been more than that. Outsourcing essential business services will change the face of many organizations and lead to incredibly positive results. Technological advances and automation will streamline all operations and improve communication between internal employees and their third-party allies. New digital tools and AI solutions will contribute to faster development, better services, and increased productivity.
In conclusion, if you choose to outsource in 2021, make sure you choose the best partner.