Top 10 Outsourcing Trends for 2023 

Post-pandemic, companies are expected to continue to turn to outsourcing solutions to deliver the many proven benefits of cost control, flexibility, speed, talent expertise and digital transformation. 
Based on our insights from IAOP members and research, we predict the following trends to watch for in 2023.  

1. Global services will continue to be resilient.   Everest Group research shows that 37 percent of enterprises expect budget growth in 2023 to be nearly flat with 32 percent projecting a slight spending increase and 10 percent anticipating significant growth.  Even in an economic downturn, outsourcing historically has remained resilient and a looming recession can create opportunities for service providers to make adjustments and emerge stronger. 
    
2. Cost pressure will be a top business challenge.  Easing cost pressure is the number one factor that will drive demand for global services and outsourcing, according to Everest Group. Other main drivers are to solve the talent problem in key geographic areas, pragmatically accelerate digital initiatives and increase service delivery resiliency.
    
3. Talent and skills concerns may ease slightly.  In this year’s Everest Group survey, talent ranked as the #3 concern, falling from the top challenge firms identified a year ago. The use of the contingent workforce (gig workers, freelancers, consultants and other temporary employees) will grow because of the flexibility they provide.
    
4. Enterprises will adopt social impact employment for the next wave of talent. Companies will continue to embrace employment methods that make a social impact such as impact sourcing, Diversity, Equity and Inclusion (DE&I) and refugee hiring initiatives for untapped talent pools. 
    
5. The emergence of the Metaverse (an immersive virtual world) and Web 3.0 (the next and third phase of the Internet)  have the potential to create new opportunities and markets for global service providers and advisors.   
    
6. Digital, the cloud and Artificial Intelligence (AI) will continue to be embraced by enterprises and providers will keep delivering innovative solutions in these areas.
    
7. Companies will still grapple with new ways of work post-pandemic with work-from-home and hybrid models staying, some firms demanding reluctant workers return to the office and ideas floating for a four-day work week.
    
8. Business continuity and mitigating risk will remain key lessons learned from the pandemic. Unstable geopolitical climates may lead enterprises to seek more nearshore delivery locations with lower risk. 
    
9. Flexible contracts and focus on pricing. With cost concerns being the #1 concern, expect to see enterprises seek more of this.
    
10. Cybersecurity will be an ongoing concern, particularly with potential risks with work-from-home models and the spread of Internet of Things (IoT) devices.