On January 3, 2024

Innovate or Stagnate: Your 2024 Roadmap to IT Staffing and Outsourcing Trends

A glance at 2024 IT staffing and outsourcing trend articles reveals a repetitive stream of clichéd statements – from “remote work” to “building stronger relationships” and the “rise of RPA,” the list goes on. Thus, stumbling upon yet another blog post featuring AI or cloud computing on the list prompted us to delve deeper.

Building on our expertise in IT outsourcing and staff augmentation, we aim to pinpoint the specific technology and business trends that will significantly influence the relationships between companies seeking expert IT services and suppliers offering them in the coming year.

Seeking fresh air and a new perspective, we invite you to explore trends gleaned from recent analyses, including Gartner’s Top Industry Trends report.

IT Staffing and Outsourcing Market: 2023 Facts, 2024 Projections

First, let’s take a snapshot of what the global IT staffing and outsourcing market looked like in 2023 and what’s in store for 2024:

The IT staffing and outsourcing market is on a growing curve. According to Precedence Research, the global IT outsourcing market is expected to grow by nearly 8% over the next year, from 565.43 billion USD in 2023 to 609.53 billion USD in 2024.
Spending on IT services rises globally. Statista’s prediction for global spending on IT services will go up from 1.42 trillion USD in 2023 to 1.58 trillion USD in 2024.
3 out of 4 companies underutilize their earning and growth potential due to unfilled IT roles. ManpowerGroup reports that an astounding 75% of employers struggle to fill vacancies. The problem is particularly prominent in healthcare, transport, logistics, and information technology industries. Among the countries with the highest talent scarcity, the company listed Germany, the UK, Ireland, Canada, Sweden, and Austria.
There’s a high demand for future-oriented tech skills. Among the highest-paid IT/tech skills, we can find Go/Golang, Apache Kafka, Elastic Search, Kubernetes, Platform as a Service, and Service-Oriented Architecture. This reveals a prominent trend in microservices, data science, streaming and analytics, and scalable, highly performant, flexible solutions.
IT staff augmentation and outsourcing continue to provide high value. Deloitte’s 2023 Global Outsourcing Report reveals that the core reasons for engaging an external resourcing partner are cost efficiency, process standardization and efficiency, developing key capabilities outside the team’s scope, and driving higher business value.
Established centers of IT service excellence hold their ground. The same publication reports India, Mexico, and Poland as the world’s top three locations with the largest shared services centers.

it staff augmentation and outsourcing trends 2024

What Technology Trends to Expect in IT Staff Augmentation?

Now that we’ve covered the numbers, let’s delve into the upcoming technology recruiting trends set to dominate cross-industry IT infrastructure and operations in 2024.

Generative AI (GenAI)

In 2023, generative AI saw unprecedented growth, with its adoption outpacing that of any other recent technology. Insider Intelligence reported an increase from 7.8 million GenAI users in 2022 to over 100 million by 2024 in the USA alone. This means that, as you read this, one in three Americans have engaged with generative chatbots. On the business side, 70% of organizations are exploring GenAI’s use, with nearly half investing in AI as a result.

This surge in generative AI usage has significant implications for IT recruiting trends. Companies now seek engineers with expertise in Java, R, and Python to seamlessly integrate tools like ChatGPT, Bing Chat, and Jasper into their tech stack, emphasizing the design of business workflows. Furthermore, integrating Natural Language Processing Capabilities (NLP) using tools like PyTorch and TensorFlow can enhance user interactions, while incorporating image recognition enables more sophisticated applications, such as deep fake detection and medical data augmentation. These generative AI solutions offer extensive opportunities for process optimization, improved ROI, and cost-effectiveness.

Continuous Threat Exposure Management (CTEM)

Security never goes out of fashion, especially as the sophistication of cyber threats evolves. As it happens, managing and maintaining business IT security posture is becoming increasingly complex, requiring constant revisiting of tools and skills. Businesses’ strategic response to that landscape is Continuous Threat Exposure Management or CTEM, an integrated, iterative approach to identifying, assessing, and managing potential cybersecurity threats and vulnerabilities.

Planning, building, and sustaining such a framework is not easy, as it requires cross-departmental skills. They include cybersecurity tools and apps, data analytics skills, the knowledge of programming and scripting languages, risk assessment and management skills, and incident response protocols understanding, on top of other talents. Securing all these abilities is much easier when assisted by a trusted IT staffing and dedicated teams provider to find the right talent quickly.

Internet of Behavior

The Internet of Things (IoT) began a data-driven era with insights from sensors and smart devices. A quarter-century later, we see the evolution of this concept in the form of IoB, or the Internet of Behavior. IoB combines data analysis, behavioral study, and human psychology to understand behavioral patterns, make predictions, and personalize user experiences. Examples include behavior-based insurance premiums, enhancing employee productivity, and chronic illness monitoring.

Companies developing such solutions require cross-functional teams with expertise in IoT software development, data science, programming languages (Java, Python, R), UX, and privacy/security principles. Again, cooperating with specialized IT staffing and outsourcing companies allows them to streamline assembling such teams.

practical applications of internet of behavior

Business-Driven IT Outsourcing Trends in 2024

Now, let’s shift to the business side. While business frameworks don’t evolve at the same speed as technology, several prominent trends emerge when it comes to engaging external resources in projects requiring specialized IT expertise. We’ve identified three that, in our opinion, will shape cooperation with our clients in 2024 and further.

Hybrid Outsourcing and Flexible Business Models

Deloitte’s Global Shared Services report reveals distinct preferences in outsourcing among businesses of different ages. Mature businesses (over 10 years on the market) lean towards off-shoring and near-shoring (63%), while startups favor on-shoring (50%). Companies aged 4-7 years often opt for the Center of Excellence model (67%). Notably, businesses commonly utilize multiple delivery models, highlighting the absence of a one-size-fits-all solution for outsourcing, with hybrid outsourcing emerging as a viable option.

The hybrid model allows companies to delegate tasks to external providers while retaining control over strategic activities in-house. This approach offers flexibility and efficiency with various possible combinations. For instance, external providers can operate independently on some projects and seamlessly integrate into the in-house team for others. The benefits of hybrid outsourcing make it a compelling model worth exploring further, which we intend to cover on our blog in the future. And our pwrteam is also available to delve deeper upon reaching out.

Ecosystem or Multi-Vendor Based Outsourcing

A growing trend in outsourced IT is multi-vendor arrangement, where organizations collaborate with multiple specialized resource providers to create a diverse supplier ecosystem. Despite the potentially higher total cost compared to a single supplier, enterprises prefer the benefits of accessing specialized skills, reducing reliance on a single point of failure, and quickly securing required team members.

Still, small and medium organizations may opt for one or two IT staffing partners for cost efficiency, greater agility, and established relationships. It also needs to be remembered that managing a catalog of partners requires navigating the complexities of multiple relationships that cover the areas of contract management, strategic planning, data security and compliance, cultural differences, and many others.

Knowledge-Process Outsourcing (KPO)

“Knowledge is like money: to be of value, it must circulate, and in circulation, it can increase in quantity and, hopefully, in value.” This quote, attributed to Louis L’Amour, highlights the intrinsic value of outsourced IT – knowledge. And that’s what Knowledge-Process Outsourcing (KPO) is all about; it involves delegating knowledge-intensive tasks requiring specialized skills to external service providers.

While companies continue to use outsourcing for entry-level tasks, the rise of automation is gradually replacing such functions. About one-third of business tasks are automated, a proportion expected to shift to 50-50 in the next five years. Businesses facing resource constraints can implement Robotic Process Automation (RPA) to streamline administrative processes, automate routine data tasks such as data entry, tax, and invoice processing and reporting, and support HR functions.

Paradoxically, the growing adoption of automation globally enhances the appeal of KPO. It fuels demand for skills in AI, automation, and data science, and elevates the value of specialized knowledge as automation releases a budget for innovation. According to World Economic Forum research, specialized roles in AI and big data are projected to grow by 30-35% by 2027, becoming a strategic business priority. Additionally, 65% of business leaders anticipate big data will drive labor market growth during this period.

Stay ahead of the curve in 2024

We hope you found the above trends affecting outsourced IT services in 2024 refreshing and useful. Most of these technologies are here to stay, but as they constantly evolve and become more complex, a skills gap to implement and upgrade them can quickly emerge.

That’s where expert IT team augmentation and outsourcing organizations can offer valuable support, fostering innovation and bringing your teams up to speed with new solutions and emerging areas, ultimately building or reinforcing your competitive advantage on the market.