Outsourcing Industry Outlook 2021

5/24/2021 | By Marella Gimenez

outsourcing industry

Over the past decades, outsourcing has become a widely adopted tactic in business management and development. From startups to the biggest global industries, it has become an integral component of business processes. But how exactly has outsourcing developed and changed over the years? And what are the things that companies should look forward to in the outsourcing industry this 2021 and the upcoming years?

The Need for Outsourcing

Outsourcing is the process of hiring a third-party employee or team to perform tasks traditionally done in-house. The primary reason why a company chooses to outsource is typically for cost-cutting. Since outsourcing covers a wide range of fields, they can save money from various costs such as salary, equipment, technology, etc.

From customer support, HR services, IT, and more, there is no running out of functions companies can outsource.

Who Needs It and Why It’s Needed

Outsourcing can be beneficial for various industries. Especially with the transition to cloud technology, it offers the best way for companies to operate more seamlessly while they expand in the market.

A business may choose to outsource particular jobs for various reasons, including:

  • Cost reduction
  • Capacity shifting
  • Boosting performance
  • Growth and scaling
  • Diversity
  • Flexibility
  • Access to market expertise
  • Concentration on core competencies
  • Coverage

How It Evolved Over the Years

The outsourcing industry began to develop in the late 1980s and started to flourish as a business component in the 1990s. It started with companies outsourcing accounting and payroll tasks. Then, with globalization at hand, the outsourcing trend continued to progress over the years.

The outsourcing industry we know today offers an extensive pool of services that we can think of. Some of the best and most commonly outsourced work today is in the field of technology, customer service, and data management.

The Businesses’ Response to the Pandemic

The past year has undoubtedly emerged as one of the most challenging economic years in global history. With the pandemic impacting every industry, it brought a need to revise many aspects of business operations. These new changes apply to both small and medium-sized enterprises as well as multi-million dollar companies.

To prioritize employees’ health and well-being, many companies have responded to this change by transitioning to remote working. Meanwhile, some have also developed a hybrid and skeletal work setup.

Furthermore, the mass transition of companies to a work from home setup has made outsourcing a more logical employment and task delegation option. A huge part of the company reconstruction brought by the pandemic is relying upon outsourcing non-core functions for revenue generation. 

Because of this, we have also seen massive growth in the freelancing industry during the pandemic. In fact, according to a study by Upwork, 36% of the U.S. workforce have performed freelance work amid COVID-19. In this figure, 12% have jumped in on the freelancing train during the pandemic for the first time. 

Further, 67% of Upwork’s freelancers say that their job has prepared them to better cope with the COVID-19 situation than traditional jobs. While the global outsourcing figures have yet to stabilize from 2020, we’re witnessing a promising path in new outsourcing trends 2021. 


2021 Outsourcing Trends

The new outsourcing trends that have emerged in 2021 mainly focus on innovation in significant fields as opposed to merely cost-cutting. At this moment, the outsourcing industry is continuously growing and getting more popular globally.

Latest Outsourcing Statistics

The latest data and statistics on outsourcing shows that:

  • A business in the United States could save around 70% of overall costs by outsourcing in the Philippines (Outsource Accelerator)
  • 24% of small businesses globally outsource to increase efficiency (Clutch)
  • In 2017, software application development was the most commonly outsourced IT service at 64%, followed by software application maintenance at 51% (Statista)
  • In the second quarter of 2020, 70% of the outsourcing market’s transactions were digital-focused (Statista)
  • The outsourcing market size of global IT services is expected to grow at a compound annual growth rate of 7.7% from 2020 to 2027 (Grand View Research)
  • 58% of non-freelancers new to remote working during pandemic now consider freelancing in the future (Upwork)

Latest Outsourcing Trends

As we can see, the events of the past year heavily affected the outsourcing trends in 2021. It’s safe to assume that remote working is here to stay for the indefinite future. Along with this, outsourcing offers the most cost-effective solution to grow and scale businesses at this time. When it comes to trends, we’re seeing a shift in the industry towards technological advancement, operations improvement, and globalization. 

To help you stay on top of the game, below are some of the latest outsourcing trends you can implement in your business. Keeping these methods in mind will help you keep up and get ahead of the competition.

Task Delegation

We’re seeing a shift from merely delegating small business tasks to outsourcing core business functions. It shows how outsourcing offers more advantages and benefits in accomplishing essential tasks as previously assumed. It has been found that delegating essential tasks to a third-party can help companies obtain better and faster results as normal.

Quality Over Quantity

As mentioned, the trend in outsourcing is shifting from financial to innovation focus. This shift addresses the transition towards automation that can eliminate jobs handling repetitive tasks. With this, we’re seeing upskilling, high standards, and optimal results as the future trajectory of outsourcing in 2021.

Prioritizing People

One of the most crucial outsourcing trends of 2021 is focusing on people. Businesses must stay in touch with the needs of both employees, clients, and consumers. At the same time, outsourcing companies will need to modify their approach towards keeping a tight-knitted company culture.

Customer Experience Focus

The year 2021 will call for a focus on customer experience. With our fast-changing world, customers’ needs, demands, and expectations will only continue to increase. Thus, it requires companies to invest and come up with tactics to improve customer support. It’s the reason why one of the leading 2021 outsourcing fields is customer support service.

Outsourcing in Startups

To keep up with the industry, more startups and small businesses will outsource business functions at the early business stage. This move will help them address deficiencies in operations and come up with more efficient business strategies in the long run. 

Since they will be outsourcing tasks to experienced professionals, they will have skilled guidance and assistance on various business functions. This is as opposed to relying solely on in-house teams while having to keep up with budget and structure constraints.

Customized Contracts

Unlike fixed and predetermined contracts, 2021 will see a shift towards customized agreements between companies and outsourcing providers. It will diminish previous restrictions and cost pressures that can lead to misunderstandings and miscalculations. 

Customized contracts can help the two parties negotiate the scope of work, obligations, delivery, and of course, pricing. By reaching a reciprocal work arrangement, it can boost mutual trust, flexibility, and improve outcomes.

Cloud Computing

Another trend that will remain prominent in 2021 is cloud computing. It includes various computing services such as networking, software, storage database, and servers online. More outsourcing providers will provide their IT infrastructure for cloud computing services.


In-demand Jobs for Outsourcing

For both employers and job seekers, it’s crucial to determine the most in-demand jobs for outsourcing. For employers, it will serve as a guide on which gaps on tasks and positions outsourcing can fill. Meanwhile, for job seekers, it can serve as a starting point on which specialization they should focus on improving.


IT-related jobs remain to be on top of the most in-demand jobs for outsourcing. Some of the most popular offshore IT-related jobs are in the field of web development, system administration, and database administration.


When we talk about outsourcing marketing in 2021, it primarily focuses on the SEO and social media marketing niche. It involves a wide range of tasks such as social media management, SEO content writing, and website optimization.


Similar to marketing, outsourcing administrative tasks is far from traditional. One of the most outsourced jobs today is virtual assistants. These are personal assistants who handle all administrative support of a client in remote locations. A virtual assistant’s job includes scheduling meetings, bookkeeping, and replying to emails. 

HR & Accounting

Outsourcing HR tasks, such as screening candidates for an open position, are highly beneficial for startups. It helps them save time and resources on browsing through job portals and deciding on the list of potential candidates. The same goes with accounting services for small businesses that don’t require a full-time accountant or tax professionals for business operations.


Business Process Outsourcing, or BPO, is the fastest-growing industry in the world, and it also extends to outsourcing. The most in-demand jobs in this field are customer service support and tele-callers for sales or lead generation. Instead of hiring an in-house team, companies can opt to outsource these jobs from outsourcing providers and get more fruitful results.


Working with KMC

Working with the right outsourcing company will offer a tremendous impact on your business. By having an outsourcing partner you can trust, you work towards your business goals with confidence. Unlike the conventional way of hiring in-house, you can now save your operational costs wisely without compromising performance. 

By working with KMC, you can ensure that you’re in good hands with experts and professionals onboard your team. We have a dedicated team of hand-selected, highly skilled employees who will help you leverage your business processes. We work together with companies of all sizes that require outsourcing tasks. Above all, we prioritize performance, security, management, and support for your offshore team without the high costs.

As an end-to-end outsourcing company, we provide our teams the option to work in private offices or a remote work arrangement. Starting with only two floors in one building, KMC now holds the largest coworking spaces in the Philippines, with a whopping 54 floors across 23 buildings. We are more than proud to be the company both startups and established global brands rely on when it comes to outsourcing.

What are you waiting for? Outsourcing your business functions to KMC, we’ll help your business grow and scale without all the previous hassle it used to require. KMC provides the best outsourcing model that will change the pace of your business game for the better. For any inquiries, don’t hesitate to contact us here.

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