Every business needs to look into outsourcing trends as we close out 2023 and plan for 2024. Outsourcing is an ever-growing trend itself, so making the most of it is the smart move. When you know in what direction outsourcing is going, you can take the best advantage of all it has to offer.
In this post, we’ll go over what we see happening in the world of outsourcing in 2024 so you can prepare.
Continued Growth of Remote Work
Remote work was on the rise even before everyone found themselves on lockdown. When the pandemic hit, working from home simply became the norm for most people. In 2024, even as fears of the virus die down, remote work will not. By adopting this model, you can retain people who prefer to make the work from home shift permanent.
Increasing Use of Artificial Intelligence (AI) and Automation
This is one of the newer outsourcing trends, but one that will likely catch on quickly. AI and automation can be the most cost-efficient option for many tasks, such as bookkeeping. This makes them very popular. As they gain more traction, developers are likely to put more time and effort into developing better solutions for businesses. If you haven’t tried either yet, you should! Automation is a great tool when leading remote teams.
Increased Cybersecurity Measures
Cybersecurity is improving steadily. Whether we outsource or not, we share a lot of sensitive information online nowadays. We need to leverage the best online security we can access to safeguard business operations.
Rise of Niche and Specialized Outsourcing Providers
One of our favorite trends in outsourcing is all the emerging niche service providers. We used to hire freelancers from large platforms that catered to every need. Now we can find specialized sites that vet specific skillsets. In fact, the owners of Outsource School have their very own bookkeeping service called EcomBalance! This gives businesses better options because the providers can keep a closer eye on the freelancers. They are smaller, and know the niche much better.
More Flexible and Scalable Outsourcing Models
Because outsourcing has become so popular, the industry now has several models to choose from. Under location-based outsourcing, you can select partners based on how far they are from you. This includes near-shoring, offshore outsourcing, and onshore outsourcing.
With onshore outsourcing, you are hiring from within your state or country. They are likely not going to relocate for the job, hence it’s still called outsourcing. You can, however, reduce the risks associated with language barriers and cultural differences.
Nearshore outsourcing means hiring people from nearby countries, usually to find people who work within the same or similar time zone as you are in. Some language differences may be present, but the affordability makes the challenge worthwhile.
Offshore outsourcing is hiring from more distant locations. This usually gives you even more affordable options while maintaining a high quality standard of services.
Multisource outsourcing, or multisourcing, is the model which we use most often. This entails outsourcing from different providers in different locations around the world. This gives businesses the best chances of success since they can select more than one agency or platform and hire people from the global talent pool to build the most suitable teams.
With onsite outsourcing, you put together an outsourced team, then arrange for them to report to your office to work alongside in-house employees. This is usually done for short-term projects or a temporary arrangement to pass on the company culture. It also works very well to get an onshore, offshore, or nearshore team up to speed on your system and processes. If you hire from across the globe, however, you might want to consider meeting virtually instead.
Enhanced Customer Experience
We love outsourcing trends that help us improve our customers’ experience! Because so many businesses are global now, it makes a lot of sense to hire outsourced teams to take care of customers. By assembling teams from all over the world, we can cater to all needs in all time zones in real time.
Growth of Cloud-Based Outsourcing Solutions
Cloud outsourcing is another of the newer trends in outsourcing. This type of outsourcing refers to companies that contract with providers to take care of cloud computing projects. These third-party cloud service providers help businesses save on IT costs while they focus on their core competencies. Businesses can also grow more agile and gain the ability to scale by taking advantage of these outsourcing options.
Expansion of Knowledge Process Outsourcing (KPO)
The global Knowledge Process Outsourcing (KPO) market size has been growing steadily since 2021. The global pandemic that pushed most people to move to online work helped a lot. Just as any cloud-based task can be outsourced, many high-level tasks can be passed off to experts who work virtually.
Whether it’s within a single agency or hiring individuals scattered in different places, KPO works. This is how companies can get expert help and advice on a budget. It’s basically Business Process Outsourcing (BPO), but for more complex tasks.
Outsourcing in E-Commerce
As E-commerce grows year over year, outsourcing trends on the industry grow, too. This includes all aspects of E-commerce business, including logistics and supply chain management. These areas require careful planning and a lot of experience.
Outsourcing to a niche provider can be one of the best business decisions you make. The experts can help you do an accurate cost analysis and projections. The right logistics partner can be a great investment. Because they also benefit when your company succeeds, they will be dedicated to streamlining your logistics.
Apart from experience, E-fulfillment companies have the systems and processes in place to take care of this complex area of E-commerce. The trend of outsourcing to such experts has grown because it’s so much easier to partner than develop your own network – especially for global orders! A partner will have an optimized transport management system, and take care of risk management, too.
Global Talent Pool Expansion
Many people, most unfortunately, lost their jobs during the global lockdowns. Those who could no longer work in offices or outdoors were left with little choice. With almost everything around them shut down, many made the switch to working online. They found online jobs to be the last remaining option for earning a living.
Today, this is great news for business owners because the talent pool is growing larger! The larger part of the global workforce was stretched into this new mode of working. This means that overseas employers can now find more people who are experienced in working online.
Hybrid Work Models
These days, the workplace need no longer be whatever four walls your employer works out of. It is now more of an ecosystem of people who work together, from wherever they happen to be or need to be to accomplish different tasks.
Some people want an even more flexible option than choosing between the clear-cut options of working in an office and working remotely. This is how hybrid work came about, and it’s becoming really popular. Hybrid work is very people-focused in that it allows your workforce to work in whatever way boosts their productivity the most. This usually means working some days in person and some days remote, from wherever they can get the most done.
Most people these days love the option of working from home – or a beach somewhere halfway across the world. Others would like to come back to base now and again because they feel isolated or miss the water cooler chats.
Managing a hybrid workforce may be more challenging, but the extra time and effort you put in can reap you huge rewards. The increase in productivity alone can boost revenues significantly. Also, because it’s worker satisfaction that increases productivity in the first place, you’ll be dealing with far fewer human resources issues. This can be massive in terms of cost savings as well as a better company environment overall. Happier workers are great for business!
Frequently Asked Questions
What are some key drivers behind the growth of outsourcing trends?
The biggest catalyst for 2024 trends in outsourcing are the experiences of the global workforce over the past few years. The ways in which the pandemic changed the way we work is the most significant above all. This is because of how widespread it was and how deeply it impacted working folk.
How do outcome-based contracts impact outsourcing relationships?
An outcome-based contract means that a client only makes payment for services if they meet the pre-arranged objectives. This is the direct opposite of hourly work, or payment for time spent working.
Outcome-based contracts can be very beneficial for businesses, especially in managing costs. However, if the scope of work needs to change, these fixed-price contracts can be very difficult to manage. Many outsourcing relationships have gone sour because clients have updated their requirements without making room for additional work. In other words, they wanted more but weren’t wiling to pay more. All things considered, outcome-based contracts are perfectly alright as long as both parties know exactly what’s expected and stick to it.
What Is Outsource School?
Outsource School helps you to unlock the potential of virtual assistants and accelerate your business growth.
Since being founded in 2020, Outsource School has helped 1,000+ business owners hire 2,000+ virtual assistants for their companies.
Free resources you might like:
- Outsource School Case Study: How We Scaled to 45+ VAs and 8 Figures in Revenue
- Free VA Calculator | See How Many VAs You Can Afford
- Free Training on 5 Keys to Working With VAs
- Learn Outsourcing 101 | Guides, Downloads, and Checklists
We believe that all businesses should learn to adapt to outsourcing trends, at least in some part. Outsourcing is the way of the future, and getting on board with trends is always a smart business move. Knowing what to expect in 2024, we hope that you can plan to take advantage of all that outsourcing has to offer your business.