10 Outsourcing Predictions for 2024

6  min read

January 10, 2024

Nearly 60% of businesses look to outsourcing as a strategy for lowering costs. Outsourcing is also a solution for accessing industry or departmental expertise while also mitigating staffing and employee retention problems.

With the growing popularity of outsourcing everything from bookkeeping, accounting, finance, and human resources to legal, marketing, customer response management, and sales, businesses should keep an eye on the trends and changes that are expected to impact the outsourcing industry in 2024.

10 Trends in Outsourcing to Watch for in 2024

1. Ongoing Growth in Outsourcing

With the availability and recent improvements in communications and cloud-based technologies, the tools for superior outsourcing services are readily available and widely used. Additionally, businesses continue facing challenges with acquiring talent and retaining employees. As a result, 50% of executives say that staffing is one of their greatest challenges and top priorities. 

This sets the stage for ongoing growth in the outsourcing industry, as more and more business leaders look to outsourcing to solve their staffing and operational challenges. 

2. Increased Demand for Virtual CFO Services

As of the first quarter of 2023, staffing challenges and limited access to individuals with the necessary experience, education, and qualifications led to 103% year-over-year growth in the demand for interim CFOs (i.e. virtual CFO services, outsourced CFOs, or fractional CFOs). As staffing challenges persist, this growing demand is likely to continue into 2024 with more businesses choosing to outsource the strategic C-suite position in their companies to less-expensive, more experienced, third-party professionals.

Read More: The Pros and Cons of Outsourced Accounting Services for Businesses

3. Leveraging the Global Talent Pool

Along with remote workplaces, outsourcing enables businesses to dip into a global-sized talent pool. The ability to access contractors, outsourced service providers, and offshore teams means that businesses can utilize the best of the best. This affords businesses access to professionals who offer traditional business services in addition to more complex services such as cybersecurity, international compliance, or forensic accounting. 

4. Client-Centric Services

With improving technologies and growth in the outsourcing industry, increased abilities and competition are leading to higher client expectations. As a result, outsourced service providers are increasing their focus on delivering client-centric services that are tailored to meet each client's unique needs, while helping them satisfy their own clients' higher standards by helping to facilitate better end-product or service delivery. 

5. Increased Efficiency With Robotic Process Automation

Robotic process automation (RPA) is the practice of automating repetitive manual tasks. RPA will continue to become increasingly utilized in the outsourcing industry as it reduces costs, increases efficiency, and improves accuracy. RPA is primarily used for automating repetitive, routine, time-consuming tasks such as transaction processing, data entry, and report preparation. The use of RPA in outsourcing improves the quality and timeliness of service and deliverables.

6. High-Powered Automation With Artificial Intelligence 

As of the beginning of the fourth quarter in 2023, 35% of businesses had already adopted artificial intelligence (AI), 77% of all devices in use featured some form of AI, and 9A% of organizations believe that AI will be necessary for gaining a competitive advantage.

In 2024, AI will likely continue to become further integrated into outsourcing processes to improve efficiency, increase accuracy, and reduce manual processes. In addition to AI applications in the back office, increased adoption of AI will continue to be seen in customer service and sales with the use of chatbots.

As it advances and becomes increasingly accepted and adopted, AI along with expanding machine learning capabilities will begin to take automation beyond repetitive processes with the ability to analyze large data sets in seconds. 

Read More: How ChatGPT Will Impact The Accounting Industry

7. Environmental Responsibility and Sustainability Reporting

The focus on environmental responsibility and sustainability is becoming stronger, and this trend will likely continue into the new year. As a result, clients are expecting their service providers to exhibit a commitment to sustainability while also helping them increase their own sustainability. 

In the outsourced client advisory services sector, for example, this means turning to more green initiatives and working with clients to calculate and report their triple bottom line to demonstrate how their business impacts people, the planet, and profits.

8. Continued Growth in Cloud-Based Outsourcing

Cloud-based technologies have fueled ongoing growth in the outsourcing industry, as they have revolutionized the facilitation of outsourcing services. Thanks to the cloud, businesses can access and work with third-party providers with ease and without the past limitations imposed by physical distance, shipping delays, and communication costs. With the rise of automated technologies and the increase in integrated technologies, we'll continue to see growth in cloud-based systems of outsourcing. 

9. Increased Focus on Compliance and Data Security for Businesses

In 2023, an estimated 2,200 cybersecurity attacks occurred each day with an average of one attack happening every 39 seconds. In the U.S. the average cost of a data breach is $9.44 million. 

With persistent threats and high costs, cybersecurity, compliance, and data security are of paramount importance to saving money, protecting your reputation, and safeguarding your clients' information. As a result, the cybersecurity industry will continue to grow in the coming year. More businesses will look to outsource their cybersecurity, compliance, and data protection to expert, third-party providers, and outsourced service providers will heighten their focus on IT security. 

10. More Flexible and Scalable Services With Ecosystem Outsourcing

Ecosystem outsourcing refers to an outsourcing strategy that businesses use to focus their primary resources on the core function of their business. For example, an architecture firm with ecosystem-based outsourcing would outsource every aspect of the business that wasn't directly related to designing buildings. As a result, the business creates a comprehensive ecosystem of experts in every field with only direct hires being experts in architecture - everyone else (legal, marketing, finance, human resources, sales, etc.) are outsourced.

While a completely outsourced ecosystem might seem unsettling, like you're giving up too much control of your business to third parties, it can be a powerful cost-saving tool and also give your business access to experts in every aspect of business management. Most companies won't outsource every department. However, increasing the number of departments, business functions, and employees you choose to outsource will save you money and strengthen your business (as long as you select reputable partners). 

Accounting systems that utilize software such as QuickBooks or Sage Intacct are already set up for ecosystem-based outsourced, as well as organization-wide automation, data collection, and analysis. These robust systems seamlessly integrate with hundreds of business management applications that are designed to enhance and improve operational efficiency throughout an organization - from human resources, marketing, and sales to customer service, research and development, the back office, and more.

Strengthen and Grow Your SME With Outsourced Accounting for Businesses

As you finalize your budget and business plans for 2024, remember that outsourcing can be an excellent strategy for saving money, freeing up your time, and focusing on the core aspects of your business. With outsourced accounting, you can eliminate the stress of managing your back office and transform it into a department that works for you, helping you enhance operations, improve efficiencies, and maximize productivity and profits to help you achieve your goals this coming year and beyond.