With the start of any new year comes a raft of predictions in any given sector – the business world and the role of outsourcing is no exception. Fortunately, at Sundaram Business Services there’s no need to rely on a crystal ball, or a best guess after a session of blue-sky gazing.
To assess the trends affecting our business – as well as the portents that will affect our clients’ businesses – at Sundaram Business Services we have at our disposal extensive research conducted by business analysts, as well as a strong leadership team and advisory panel with years of experience and expertise.
That’s how we know that the global business process outsourcing (BPO) market size continues its steady growth trajectory.
Trending up: outsourcing market continues to strengthen
As Grand View Research reports, by 2030 the BPO market is expected to generate revenue of $US525.2 billion. In 2022, the outsourcing market was valued at $US261.9 billion – a number that is expected to grow at a compound annual growth rate (CAGR) of 9.4% from 2023 to 2030.
“BPO refers to the process of outsourcing operations and responsibilities of many business functions to external service providers. These services find prominent demand due to their benefits such as increased flexibility, reduced costs, and enhanced service quality. Moreover, the market allows businesses to refocus on their core business activities to deliver incremental value to their customers. Owing to these benefits, BPO services witness demand across end-use industries such as healthcare, BFSI, and IT & telecommunications.”
Business Process Outsourcing Market Size, Share & Trends Analysis Report, Grand View Research
Put those numbers in a pre-pandemic context and the result is even more remarkable: in 2018 the market was worth a mere US$85.6 billion, with larger companies such as Apple, IBM and Cisco Systems outsourcing technical tasks like accounting, IT services, and digital marketing responsibilities (Source: Cloudtask).
Today, outsourcing is accessible and affordable to businesses of all sizes, in all sectors – and, thanks to brilliant ICT solutions, all over the world. We run through some of the types of businesses tapping into the benefits in a previous blog post, Outsourcing: will it work for your business?
Like any forward-looking corporation, Sundaram Business Services also keeps a close eye on the trends that are likely to affect our clients.
Trends that are affecting the outsourcing market
Let’s run through the top 4 trends that we’ve noticed making their way into conversations with Sundaram’s clients both in the boardroom and as we catch up over lunch.
- Skills shortage requires businesses to get creative with staffing
- Remote work is now the norm
- Cybersafety is top of mind
- Global economic downturn creates worry – but also opportunities
1 - Skills shortage set to continue for a while yet
Across the board, businesses in Australia are finding it more and more difficult to attract and retain staff. The staffing crisis is being felt in every sector, in businesses of all shapes and sizes. A report commissioned by the former Commonwealth Government revealed that Australia faces a shortfall of almost 200,000 workers by 2050.
Most Australian business leaders are concerned about the impacts of skills shortages, as the Australian Industry Group noted in January 2023:
“An overwhelming 90% of businesses expect to be affected by staffing shortages in 2023. These are most keenly felt in higher-skilled occupations, but are evident across all skill levels, industries and geographic locations.”
Ai Group Chief Executive, Innes Willox
In November, NAB Executive for Business Metro, Michael Saadie, made this comment on the continuing shortage of labour: “It’s clear hiring and retaining staff remains a critical challenge and is preventing some SMEs from growing as quickly as they want.”
Now more than ever, we expect that Sundaram Business Services’ existing clients will benefit from our ability to scale their workforce on demand, without having to increase their number of employees or expand their infrastructure.
2 - Remote work is now run-of-the-mill
Remote work is now no longer ‘the new normal’. It’s just normal. As teams become more and more accustomed to the virtual teams environment, backed up with great communications tools like video calls and instant messaging, it’s simply part of our natural workday lives.
Research by high-end recruitment firm The Ladders has the numbers to back it up:
“Based on our review of the 50,000 largest employers in the US and Canada, we find that more jobs are moving permanently remote, and that the trend to remote work has accelerated in 2022.”
Quarterly Remote Work Report, The Ladders
The consequence for business process outsourcing is that organisational cultures have adapted to the online environment, and employees are much more comfortable working with team members in other locations, even when that means other time zones.
Sundaram Business Services’s Harish Rao, Advisory Panel Chair says clients’ confidence is further bolstered by Sundaram’s top-notch engagement processes, clearly outlined governance and relationships, and stringent risk management processes.
“We’ve refined Sundaram’s processes over 20 years, so our customers appreciate the seamless transition we deliver. Even customers who are completely comfortable with the remote work environment say they learn something from how well our engagement model works.”
Harish Rao, Sundaram Business Services
3 - Safety first: more rigorous oversight of cybersecurity
It seems everyone knows someone who’s been the target of a cybersecurity threat, whether it’s a government agency under attack by a foreign party or your neighbour falling for that phone call or that email, which was so well designed that even a security expert would have to look twice.
Those headlines about data breaches keep business leaders awake at night.
We’re seeing stronger legislation and regulation around cybersecurity protections, which is good news.
For any safe and successful business partnership, a system for rigorous compliance and control is absolutely essential. To learn which practices Sundaram Business Services’ employs to keep staff, clients and our own organisation safe, check out our blog post on safety, security and best practice.
4 - Storm clouds brewing? The economy is looking gloomy.
There’s no getting around it: the fact is that the global economy is taking a hit, and it’s not letting up any time soon.
The Australian Industry Group report mentioned above indicates that, while Australia’s business leaders are cautiously optimistic for 2023, most acknowledge that any growth will be driven by:
- changed operational practices to adapt to staff shortages (33%)
- outsourcing some production (16%)
- changing their product offerings (13%).
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