The Sudden Hike in Global Outsourcing of IT Services

Since the pandemic, the IT sector has experienced a surge in IT outsourcing services. The global market for outsourced services exceeds $92 billion. More people are opting for third-party resources for software engineering.  

Most startups choose to outsource when they require exceptional IT services. Global outsourcing allows companies to reduce development costs and improve their IT processes. There is more to external hiring than meets the eye.  

The article discusses the sudden hike in the global outsourcing of IT solutions. Before diving into the reasons, let’s review the definition of outsourcing for our readers.  

IT Outsourcing Services

Outsourcing refers to external resources or third-party assistance for IT-driven business processes, IT infrastructure, and related software solutions.   

It is a prevalent practice in the digital world as more companies outsource their core IT processes. Hiring external parties helps businesses to strategize better. Resource hiring enables companies to:  

  • Please select the best IT professionals for their IT-driven tasks and projects
  • Shape their IT infrastructure as desired
  • Map out the best possible outsourcing contracts
  • Strike deals for sustainable relationships with the service providers
  • Accomplish a win-win situation between the client and the company

External staffing allows the organization to be resourceful while keeping the costs low and the hierarchy as simple as possible. Since the intellectual property you hire is temporary, you enjoy the benefits and maintain control over your business processes. External resourcing accelerates your time to market, which provides businesses with a competitive edge. 

Reasons for the Surge in Hiring Outside Resources

Let’s go over some of the top reasons for the surge in staffing services. 

1. Shortage of IT Professionals in Most Setups

Technical knowledge and talent are running short today. You may find many tech-savvy people, but you need the most qualified, professional, and experienced person to do the job. IT firms prefer a person with a decade of experience rather than a novice with many certifications and qualifications.  

A McKinsey study revealed that almost 87% of enterprises lack skills and talent. They fear shortage in the coming years. The state of affairs is astounding regarding talent shortage vs. talent demand. The skill gap is expected to grow as more IT firms emerge. An enormous skill gap comes from analytics and mobile and web development. 

By skill gaps, we mean the required IT skill scarcity in specialized IT projects and companies. If your organization is looking to implement a new web solution, there is no relevant developer in your company’s vicinity. There is a shortage of required skill sets within your company. Therefore your firm decides to outsource. The in-house employees may not be skilled enough to handle the specialized project.    

Under these circumstances, rather than augment the in-house resources, most firms opt for external resources temporarily. Hiring external resources means cutting-down costs and eliminating lengthy recruitment protocols.   

External recruitment allows companies to reach out to a global cohort of IT professionals. These professionals are resourceful, technologically savvy, sound, and build creative IT solutions.

2. Post-Pandemic Monetary Concerns

The global economy suffered a significant blow when the pandemic overshadowed our lives. Covid toppled economies, and the effects still lurk in the form of inflation, poverty, and lack of resources. The financial crisis followed and still exists along with the global health crisis. To reduce the costs, outsourcing is becoming an external affair for most companies.  

Organizations are focusing more on handling non-core business functions. Seeing the fragility of times, they outsource the core IT processes to professional vendors.  

By leveraging the IT services of professional vendors, businesses are saving on operations and labor costs. The cost of outsourcing to overseas markets is often negligible, primarily for Asian countries. The labor is significantly and comparatively cheaper, and the skills are up to the mark. They offer reasonably-prices services and guarantee business productivity and efficiency.  

3. Focus on Strategic Functions  

A survey by Statista revealed that one of the critical reasons for employing external resources is to free up internal resources. At times the in-house resources are badly caught-up with tasks and projects beyond their expertise, scope, and deadlines. While focusing on IT outsourcing, they lose track of other strategic processes and functions of the organization. 

35% of companies choose to staff externally because they want their in-house resources to put more focus and attention into strategic functions.

The in-house resources can accomplish company goals and objectives by dedicating their time and expertise to other core processes. The companies can better optimize their strategic functions and improve end-user satisfaction.

Other reasons for the increased hiring of external staff include flexibility, better digitalization opportunities, and no HR-related issues. The dominance of digital culture is shifting companies towards outsourcing infrastructure, which is both beneficial and profitable 

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