Outsourcing has become an essential strategy for businesses worldwide, helping them cut costs and streamline operations. In the United States, around 300,000 jobs are outsourced each year.
Many multinational companies, particularly in software development, choose to outsource their work to other countries. The main reasons include reducing expenses, accessing skilled talent, and improving overall efficiency.
This article covers the latest facts and figures about outsourcing, its adoption, the reasons companies cite for outsourcing, its challenges and benefits, and more.
Outsourcing Statistics 2025: At A Glance
- Approximately 300,000 jobs are outsourced from the United States each year
- Most US businesses (66%) outsource at least one department.
- 92% of G2000 companies use IT outsourcing.
- Many small businesses, around 37%, outsource to stay competitive.
- 57% of businesses outsource their work to increase productivity.
- About 59% outsource to reduce costs and focus on core tasks.
US Outsourcing Statistics
The outsourcing of services in the United States has steadily increased over the past few years. Most American businesses outsource their services to countries with lower labor charges.
Here are further details about outsourcing in the United States.
How Many Jobs Are Outsourced Each Year?
Approximately 300,000 jobs are outsourced each year from the United States, contributing to a global outsourcing market valued at around $85.6 billion.
That means approximately 300,000 job jobs are lost every year due to outsourcing. Hence, 80% of American workers said that increased outsourcing of jobs to other countries hurts employment.
Source: Team sage, FounderJar.
What Percent Of Jobs Are Outsourced?
4.5% of American jobs are outsourced each year
America created 6.7 million total jobs in 2021. Of these, 6.4 million jobs were added at home, while the remaining 4.5% were outsourced to different countries worldwide.
Source: Zippia.
29% Of US Businesses With Fewer Than 50 Employees Outsource Work
Comparatively, 66% of businesses with more than 50 employees outsource their work.
Further, over 68% of the large consumer products companies in the United States use outsourcing.
According to the studies, the company’s size determines if it will outsource the services. Small businesses do not have enough finances to outsource their services.
The following table displays the size and the percentage of the businesses that used outsourcing.
| Number Of Employees | Percentage Of Businesses |
|---|---|
| 1000 to 10,000 employees | 51.6% |
| 10,001 to 50,000 employees | 61.1% |
| 50,000 employees | 40.7% |
| Organizations of all sizes (Average) | 24.5% |
Source: Founder Jar, Time Doctor.
66% Of Businesses In The United States Outsourced At Least One Department
59% of these businesses say that cost-cutting is the primary reason for outsourcing.
Hence, most businesses prefer to outsource work to other countries with skilled service providers and lower fees than local ones.
Sources: Interrupt Media.
68% Of US Companies Outsource To Low-Cost Countries
The study by Delloite repealed that 84% of businesses do so for cost reduction. Standardization of processes and development of capabilities are other major reasons cited by 82% and 70% of companies, respectively.
The most prominent outsourcing companies in the United States are IBM and Deloitte.
Source: Outsource Accelerator, capital Counselor.
Business Outsourcing Statistics
The most commonly outsourced services are technology and innovation, marketing, customer service, human resources, finance, and design sectors.
This section provides insights into the services businesses outsource.
92% Of G2000 Companies Use IT Outsourcing
More than 9 in 10 of the top 2000 global companies have IT contracts today.
Comparatively, over 90% of the top 2000 global companies had IT outsourcing contracts in 2019.
Business process outsourcing was less popular than IT outsourcing at that time, with only 59% of the G2000 investing in it.
Source: EI.ISG-One.
90% Of The Businesses Claimed The Cloud As The Primary Enabler Of The Outsourcing Journey
According to the survey conducted by Delloite, 9 in 10 client participants saw the cloud as one of the primary enablers in their outsourcing journey.
The COVID-19 pandemic further pushed cloud adoption, resulting in increased outsourcing.
Source: Delloite.
96% Of Executives Cited Service Providers As The Source For The Development Of Data And Analytics Capabilities
In a study conducted by Deloitte, 96% of the executives said service providers are the source of data development and analytics capabilities.
Source: Delloite.
Small Business Outsourcing Statistics
Over one-third of businesses prefer to outsource their services. This reduces in-house costs and allows employees to focus on core tasks.
Around 27% Of Small Enterprises Outsource Customer Service
According to the Clutch report, 90% of small businesses planned to outsource their functions, an increase from 80% in 2021.
Outsourcing consumer services helps the business access the latest technology and a larger number of experts. Hence, businesses can free up energy and employees and focus on their core services and products.
Source: Invedus.
How Many Companies Outsource?
Over 1 in 3 small businesses outsource at least one business process.
Further, 52% of businesses planned to outsource one or more business processes, and 83% of the small businesses will increase or maintain their spending on outsourced services.
According to a study by Clutch, over a third of businesses outsource their IT and accounting services.
Here are further details about the other services that small businesses outsource to focus on their core services.
| Service | Percentage Of Small Businesses |
|---|---|
| Accounting | 37% |
| IT services | 37% |
| Digital Marketing | 34% |
| Development | 28% |
| Human resources | 24% |
| Customer support | 24% |
Source: Clutch, The remote group.
Jobs Sent Overseas Statistics
Let’s uncover the latest figures about overseas outsourcing in the United States.
2.7 Million American Jobs Are Sent Overseas
Outsourcing jobs from the United States to foreign countries has been growing since 2001.
India, China, and Malaysia are the top three countries that receive outsourced jobs from the United States.
Source: Gitnux.
40% Of US Multinational Companies Outsource Their Software Development To Countries Like India, China, And The Philippines
According to Deloitte’s study, 59% of American companies outsource their work to India, and 80% of the US and European outsourcing corporations consider India to be the number one location for outsourcing IT solutions.
Source: Zipdo, Deloitte.
9 Out Of 10 High-Tech Startups Have Outsourced Their Work Overseas
Many startups in the United States outsource their jobs to top underdeveloped companies to save money amid the rising labor costs in the United States.
Another major reason tech firms and startups outsource work is talent shortages. 45% of the tech firms outsourced their work to address talent shortages.
Further, Amazon has offshored its research and development to a Ukrainian startup to access exceptional talent at a reasonable wage.
Source: Zipdo, Technically.
Outsourcing Statistics By Country
The Philippines and India have a number of people with great talents. Hence, countries like the US and the UK prefer to outsource their work to other countries.
The United Kingdom Had Around 48% Of Companies Offshoring Business Functions
There has been a 41% increase in work outsourcing in the United Kingdom since the pandemic.
Besides, 70% of the B2B decision makers accepted that they outsource some parts of their businesses.
Meanwhile, businesses in the United Kingdom allocated £500 billion to outsourcing in 2022.
Source: IWORK. CO.UK.
The Philippines And India Are The World’s Leading Exporters Of Outsourced Service Activities
The Philippines has held the title of the “BPO Capital of the World” for over a decade. Service exports of the Philippines increased from $5,666 million in 2003 to $41,126 million in 2022. This was an average growth of 11.67%.
Besides, India is preferred for outsourcing as the country is the home to skilled workers. Its export services increased from $213.2 billion in 2019-20 to $254.4 billion in 2021-2022.
Here is a list of top countries that are preferred for outsourcing.
- The Philippines
- India
- Brazil
- Mexico
Source: EY, Business.com, Knoema, the Indian ministry of commerce and Industry.
Outsourcing Market Statistics
Is outsourcing increasing or decreasing in 2025?
Even though many businesses try to decrease outsourcing their work, the overall outsourcing market constantly increases yearly.
Let’s take a closer look at the latest state of the outsourcing market.
The Business Process Outsourcing Market Is Projected To Be Worth $525.4 Billion By 2030
The Business Process Outsourcing market size was $243.9 billion in 2021.
The market will grow at a CAGR of 8.9% between the forecast period of 2023 and 2030.
Source: LinkedIn.
The IT Outsourcing Market Is Estimated To Be Valued AT $617.69 Billion
The market is anticipated to reach $806.53 billion by 2029, growing at a CAGR of 5.48% between 2024 and 2029.
Asia Pacific is the fastest-growing and largest IT outsourcing market.
The major drivers of the market are the growth of Information technology and the rising adoption of cloud services.
Source: Mordor Intelligence.
60% Of Finance And Accounting Outsourcing Contracts Will Not Be Renewed By 2025
Most of these contracts had outdated pricing models and did not drive digitalization or process improvement.
Further, Gartner also predicted that 40% of finance organizations will deal with a single outsourcing service provider for all F&A operations. That was up from 24% recorded in 2019.
Source: Gartner.
Reasons For Outsourcing
Businesses today prefer to focus on the core tasks of companies and hence outsource other tasks to save employees time and cut costs for full-time employees.
59% Of Businesses Outsource To Cut Costs
Meanwhile, 26% of small businesses outsource to get help from an expert.
70% of companies find outsourcing cost-effective because it reduces the cost of hiring in-house staff.
Other major reasons for outsourcing services are:
- Enabling focus on core business
- Maintaining steady growth and productivity
- A modern solution to challenging business dynamics
- Solving capacity issues.
- Benefit from top talent.
Sources: LinkedIn, BlackBear, RadixWeb, Forbes.
65% Of Organizations Outsource To Enable Focus On Their Core Business
Meanwhile, 53% of the businesses cited outsourcing services for solving capability issues and scaling their business globally.
According to Deloitte, the following table includes the top reasons for outsourcing work.
| Reasons For Outsourcing | Percentage Of Businesses |
|---|---|
| Focus on core functions | 65% |
| Cost cutting | 63% |
| Solving Capability issues | 53% |
| Greater global scalability | 33% |
| Critical business needs | 33% |
| Enhancing service quality | 28% |
| Accessing intellectual capital | 26% |
| Driving broader transformation | 20% |
| Managing business environments | 18% |
| Helping meet regulatory needs. | 16% |
Source: Beetroot, Delloite.
Nearly 1 In 4 Small Businesses Outsource To Increase Efficiency
Outsourcing helps small businesses leverage their talents to improve business efficiencies, which in turn allows the in-house staff to focus on the core process and company growth.
According to the poll conducted by Clutch, 24% of small businesses said the prime reason for outsourcing was increased efficiency.
The following table displays the reasons small businesses outsource their services.
| Why Do Small Businesses Outsource? | Percentage Of Businesses |
|---|---|
| Increase efficiency | 24% |
| Increase available expertise | 18% |
| Increase flexibility | 16% |
| Frees up employees’ time for other tasks | 15% |
| Increases available resources | 15% |
| Reduces operating costs | 12% |
Sources: Clutch.
Challenges Of Outsourcing
This section highlights the challenges businesses face while outsourcing their work.
23% Of Small Businesses Consider High Costs As Biggest Challenge In Working With An Outsourced Team
Other top challenges faced by small businesses while outsourcing services are as follows:
- The cost was too high: 23%
- Difficult to communicate: 21%
- Failed to meet deadlines: 14%
- Didn’t follow instructions: 12%
- Lack of confidentiality: 9%
- Low-quality work/services: 9%
- Data breach: 8%
- Other: 5%
Source: Upcity.
20% To 25% Of All Outsourcing Relationships Fail Within Two Years
Meanwhile, 50% of businesses fail when outsourcing software development projects within five years.
Source: CloudAppe.
Jobs Lost To Outsourcing Statistics
Outsourcing is one of the primary reasons people lose their jobs or are unemployed. Every year, thousands of jobs are allotted for outsourcing, eventually leading to decreased employment rates.
Offshore Outsourcing Will Threaten 14 Million White-Collar Jobs
In the rapidly evolving global job market, offshore outsourcing is threatening an alarming number of white-collar jobs in the United States. This serves as a reminder of the urgency of adaptation and reskilling.
Source: Zipdo, Forbes.
California Lost 654,000 Jobs To China Between 2001 And 2018
Texas is next with 335,000 displaced jobs, followed by New York with 185,100 lost workplaces.
Overall, the United States lost 3.7 million jobs to China.
Source: Teamstage.
311,427 American Jobs Have Been Government-Certified As Lost To Trade Since 2017
Of these, 202,543 jobs were listed as as offshored.
Since 2017, hundreds of thousands of additional jobs have been offshored. Today, the trade deficit is 22% higher compared to 2016.
Source: Citizen
Conclusion: Around 300,000 Jobs Are Outsourced By The United States Annually
Outsourcing plays a vital role in global business strategies, with around 300,000 jobs outsourced annually from the United States alone. In the U.S., two-thirds of businesses outsource at least one department, and 92% of G2000 companies depend on IT outsourcing.
Small businesses are also turning to outsourcing, with over one-third using it to stay competitive. The main reasons businesses choose outsourcing are to cut costs, with 59% doing so, and to increase productivity, which motivates 57% of companies.
