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2023 Trends in IT Outsourcing

In recent years, there has been a growing trend towards engineering outsourcing, as companies look to reduce costs, increase efficiency, and tap into global talent pools.

Some of the key trends that have emerged in this area include:

1. Greater adoption of cloud-based tools and technologies that enable remote collaboration and communication, making it easier to manage distributed teams and work seamlessly across borders.

2. Increased focus on data security and privacy, as companies become more aware of the risks associated with outsourcing critical engineering functions to third-party providers.

3. The emergence of new outsourcing destinations, particularly in South America, as companies seek to tap into new talent pools and take advantage of lower labor costs.

4. The growing importance of soft skills, such as communication, problem-solving, and adaptability, as companies look for outsourcing partners that can work effectively with their internal teams and deliver high-quality results.

5. The rise of specialized outsourcing providers, such as those focused on specific engineering disciplines or technologies, as companies look for partners with deep expertise in their specific areas of need.

There are multiple reasons for boosting software development outsourcing demand. This trend is directly associated with the viewpoint of the organization’s higher authorities.


Quick and efficient scaling up of a team is essential.

If the company partners with a software outsourcing company, it can effortlessly scale up the team in no time. Up to 40% of the CTOs think that software development outsourcing can lead to precisely managing work in a fast-paced environment.

Hence, for quick team scaling within cost and time constraints, outsourcing is the first choice of a CTO. This explains why outsourcing demand will continue to accelerate in 2023.

HR Managers.

Hiring a new employee has always been a time-consuming task, and it also involves some additional costs, affecting the company’s budget.

By joining forces with a software outsourcing company, HR Managers are analyzing a reduction in additional hiring expenses.

It helps them complete the overall hiring process in less time, as engineers get verified by the third party and are primarily on their payroll.

Trends for 2023

The technology and services market this year will experience strong growth.

As spending on digital transformation and software-driven operating platforms increases, we will see the traditional cost-saving sectors in the IT return.

Services demand in the business process outsourcing (BPO) sector will accelerate. The reason for strong demand is that outsourcing is one of the ways companies can achieve cost savings, which will be a focus as we move into uncertain recessionary times.

The constrained labor market will continue next year. There will be more jobs than people to fill them for experienced engineering, IT, and other skilled labor.

Therefore, we could well see wage inflation in the engineering, IT, and skilled labor sectors continuing to persist well past where other labor markets are cool.

There will also be strong demand for new technologies such as AI and ongoing automation as companies further move into the new software-driven operating platforms.

The coming year will be one of strong demand, with tensions on pricing, and difficulty meeting the demand.

Moreover, according to the 2022 State of Tech Staffing report from Commit, Software Development Outsourcing Will Grow 70% by 2023.

The benefits of remote work are acknowledged by 99% of respondents of Commits’ 2022 State of Tech Staffing report. The top benefits of remote work, according to respondents, are higher productivity (53%), cost-saving (33%), better cross-team collaboration (32%), better employee health (29%), and an expanded talent pool (27%).

UI/UX designer is among the jobs being outsourced the most at 34%. Software developers are a close second at 31%, while QA at 28% stands as the third most outsourced job.

And as we mentioned above, scalability of team size, according to CTOs, is the top advantage (42%), followed by efficient utilization of time (39%) and higher productivity (30%).


Written by Minimalistech´s editorial team.

Minimalistech has more than 10 years of experience in providing a wide range of technology solutions based on the latest standards. We have built successful partnerships with several SF Bay Area, top performing companies, enhancing their potential and growth by providing the highest skilled IT engineers to work on their developments and projects.

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