Forecasting the Top Outsourcing Trends for 2019

The New Year is nearly here.  As we celebrate a busy and productive year in the outsourcing industry, what does the future hold?  Is 2019 a year worth celebrating in terms of expanded outsourcing growth, and, if so, in what areas? What does the future of outsourcing hold?

Several media forecasters are citing job losses in the coming year, while others are claiming that outsourcing has seen its best times, and a slow, methodical slump is very quickly on its way.

However, not everyone is forecasting doom and gloom. Some analysts are quick to point out advances in technology, which tends to guide many industries, stands to empower the best buyers and service providers, allowing them to redefine their operations and to enter new aspects of outsourcing such as data analysis and customer-centricity.

While 2019 almost upon us and the end of an interesting decade, we’re interested in examining where our corporate strategies and energies should be placed.  As new articles appear that discuss which technologies will be popular and how companies can improve performance, we are more than a little curious about where to devote our time in terms of outsourcing.  How can we get outsourcing to fit into the new wave of technological prowess?  Can we manipulate change and make it work to our advantage?

I think we agree that outsourcing is not declining, but rather it is aggressively moving forward and progressing.  According to the GSA report, 70% of companies surveyed are going to outsource more in the upcoming years, and 35% of them plan to do so significantly. In this regard, 84% of service providers expect the outsourcing industry to grow and 37% believe it will do so remarkably.

Companies are reaping their share of financial benefits, and that is great. Outsourcing allows multinationals to increase productivity and develop outcomes that take their products into the marketplace faster.  Remove outsourcing from the equation, and this success may be slower to develop.  The talent shortage felt worldwide in fields such as blockchain and Artificial Intelligence is already contributing to an increase in outsourcing.  In the past few months, certain trends are likely to ramp up noticeably.

Here are my predictions on how the outsourcing landscape will change in 2019:

1: Global Skill Shortages

Unemployment is down significantly in many developed nations.  That is both good and bad.  It is good that so many people are working.  But it is bad when companies are searching everywhere for the right skillsets, and these candidates are very few, and when they do find them, they come at a premium.  For example, the lack of in-house engineering talent will be one of the main drivers of the IT outsourcing industry. According to the latest survey, over 70% of technology employers in the UK expect to face a talent shortage over the next 12 months. We are seeing nearly 600,000 vacancies in digital technology, which will cost the country £63 bn a year.  Companies may have to outsource their services to more attractive locations in Central & Eastern Europe due to the shortage of tech professionals in their own countries.

In the United States, the IT talent shortage is also a growing problem. A report by Gartner predicts that by 2020 there will be 1.4 million computer specialist job openings.  It will create a talent shortage that universities will find challenging to fill, even at 30%.   At the same time, some companies are selective.  They want candidates that can hit the ground running with limited new hire training.  This will work against them when the talent pool is already extremely low.