Contact Center Outsourcing Market

Global Contact Center Outsourcing Market Size (2024 to 2029)

The global contact center outsourcing market is predicted to reach USD 109.23 billion in 2024 and USD 156.68 billion by 2029, growing at a CAGR of 7.48% during the forecast period.

Current Scenario of the Global Contact Center Outsourcing Market

The demand for contact center outsourcing has increased exponentially in the recent years and the global market has had a prominent growth. During the forecast period, the demand for contact center outsourcing services is anticipated to accelerate further due to the growing dependency of businesses on third-party providers to manage customer interactions effectively. This trend can be seen clearly in countries such as the Philippines, India, and the United States. For instance, the Philippines has been evolving as a leader in this industry with having a population of 1.3 million working in this sector. India is closely behind and leveraging its vast pool of English-speaking professionals and technological expertise to attract multinational clients

The shift towards cloud-based solutions and AI-driven customer interactions is one of the notable trends observed in the global contact center outsourcing market in the recent years. Currently, the global contact center outsourcing market has intense competition and companies such as Teleperformance, Concentrix and Sitel Group are playing a dominating role. To gain the competitive advantage, companies that operate in the global contact center outsourcing market has been focussing on digital transformation strategies such as integration of artificial intelligence  and machine learning, the adoption of omnichannel platforms to provide seamless interactions across various communication channels and stringent data security measures to build client trust.

MARKET DRIVERS

The cost reduction benefits associated with using contact center outsourcing services to businesses is one of major factors propelling the global market growth.

The significant cost reduction that contact center outsourcing services offer to businesses is primarily boosting their adoption and demand. Companies can significantly reduce their operational expenses by outsourcing their contact center operations to service providers located in the countries that have lower labour costs. One of the reports from Deloitte confirms the same, as per it, approximately 59% of the businesses outsource their contact center operations to reduce their costs. The cost savings from outsourcing usually come from the spending on staffing, training, technology and infrastructure. For example, companies face a cost of USD 22 to USD 31 per hour per agent in the U.S. if operated in-house contact centers, whereas the same costs as low as USD 8 to USD 14 per hour per agent if used an outsourced centers from Philippines or India. The savings are substantial; hence, businesses have been increasingly focussing on outsourcing their contact center operations and allocating the saved costs to their critical areas.

Businesses can gain access to skilled labour by outsourcing their contact center operations, which is further boosting the global market growth.

Companies can gain access to a large pool of skilled labour by outsourcing their contact center operations, especially to countries that have well-established outsourcing centers. Countries such as India and Philippines have developed numerous training programs to improve the customer service skills, language proficiency and technical expertise of people to do well in the contact center industry. As of now, more than 3.9 million people in India are working in the contact center outsourcing market and Philippines has 1.3 million call center agents, which is offering the access to skilled and experienced workforce that can provide high-quality customer service to businesses.

By outsourcing their contact center operations, businesses will have a better chance to focus on their strategic plans, which is also promoting the growth of the global contact center outsourcing market.

Companies feel that they can focus better on their core competencies by outsourcing their contact center operations, which is another significant factor propelling the demand for these services and global market growth. By reducing the burden of non-core activities such as customer services, companies can also invest more resources in major departments such as product development, marketing, and sales, which can eventually provide better value to the companies. It was found in a survey conducted by PwC that 55% of the companies outsource their contact center operations majorly to gain access to expertise and save resources to invest in their strategic plans.

Furthermore, factors such as advancements in the technology and infrastructure, the scalability and flexibility offered by the contact center outsourcing centers, improved quality of customer service, 24/7 service availability and multilingual support capabilities of contact center outsourcing centers are favouring the global market growth. Y-o-Y rise in the demand for omnichannel solutions, rapid adoption of cloud-based services, improved data security measures and compliance with regulatory standards are further aiding the growth of the global market.

MARKET RESTRAINTS

Concerns over data security and privacy is restraining the growth of the global contact center outsourcing market.

In addition, factor such as high employee turnover rates in outsourcing firms, language and cultural barriers, negative perceptions of outsourced customer service and dependency on external vendors are impeding the growth of the global market. Communication challenges and time zone differences, issues of regulatory compliance, hidden costs, loss of control over customer interactions and quality and consistency of service delivery are further affecting the growth of the contact center outsourcing market.

REPORT COVERAGE

SEGMENTAL ANALYSIS

Global Contact Center Outsourcing Market Analysis By Service Type

The voice support segment dominated the contact center outsourcing market in 2023 by accounting for 38.8% of the global market share and is expected to grow at a healthy CAGR throughout the forecast period. Despite the rapid adoption of digital channels in customer support, voice support remains as a strong option to resolve complex issues and providing human touch. The need for personalized customer interactions and immediate problem resolution is one of the factors propelling the expansion of the voice support segment in the global market. High satisfaction rates and high resolution speed through voice support compared to other service types is further boosting the segmental growth. For instance, according to CFI Group, voice support typically results in a customer satisfaction rate of 74%, which is the highest among all.

The chat support is another major segment in the global market. The chat support segment occupied for a substantial share of the worldwide market in 2023 and is expected to grow at a promising CAGR during the forecast period. The rising demand for real-time customer assistance and rapid adoption of AI-driven chatbots are majorly driving the growth of the chat support segment in the global market. For instance, in a survey conducted by tidio, more than 41% of the customers agreed that they prefer live chat option as the primary channel to avail customer service.

Global Contact Center Outsourcing Market Analysis By End-User Industry

The IT and telecom segment led the market and held 29.7% of the global market share and is estimated to register a prominent CAGR during the forecast period. The growing need for robust customer support, technical assistance and service optimization are some of the factors driving the growth of the IT and telecom segment in the global market. According to Gartner, more than 70% of the IT and telecom companies outsource their contact center operations to improve efficiency in customer service.

The BFSI segment is another notable segment and occupied 26.4% of the global market and is predicted to be a strong contender in the global market by end-user during the forecast period. The growing need to manage customer queries, fraud detection and transaction support is primarily boosting the growth of the BFSI segment in the global market. As per PwC, more than 65% of the financial institutions outsource their contact center operations to make sure of compliance and security.

The healthcare segment is anticipated to post a noteworthy CAGR during the forecast period in the global market. Y-o-Y rise in the need to manage patient appointments, billing inquiries and rapid adoption of telehealth services are contributing to the growth of the healthcare segment in the worldwide market.

REGIONAL ANALYSIS

Asia-Pacific emerged as the most dominating region in the global market by accounting for the major share of the worldwide market share in 2023. The availability of skilled workforce, cost advantages and increasing demand from global companies are primarily fuelling the contact center outsourcing market growth in the Asia-Pacific region. According to NASSCOM, India and the Philippines are the popular outsourcing destinations in the Asia-Pacific and these 2 countries account for the largest share of the Asia-Pacific market.

Europe is a lucrative regional segment in the worldwide market and is predicted to showcase a promising CAGR during the forecast period. The growth of the European market is majorly driven by the ability to address multilingual support requirements, stringent regulatory standards and growing need for cost-efficient customer service solutions. As per Frost & Sullivan, more than 65% of the businesses from Europe use outsourced contact center services for multilingual support. The UK and Germany are largest contributors to the European market and likely to hold a 50% of the share of the European market.

North America is predicted to witness a healthy CAGR during the forecast period owing to the Y-o-Y growth in the demand for customer service excellence, the availability of sophisticated technological infrastructure and the presence of numerous large enterprises. The U.S. is major contributor to the North American market and accounts more than 70% of the North American market share.

KEY MARKET PARTICIPANTS IN THE GLOBAL CONTACT CENTER OUTSOURCING MARKET

The major companies operating in the global contact center outsourcing market include Conduent Inc., IBM, HP, Teleperformance SA, CGS Inc., HGS, Datamark, Inc., Infinit Contact, Five9 Inc., VADS, Alorica, Invensis, Transcosmos, Convergys, Arvato, Sykes Enterprises, Atento, and others.

RECENT HAPPENINGS IN THE GLOBAL CONTACT CENTER OUTSOURCING MARKET

• In August 2020, DATAMARK, a leading outsourcing firm, released a report on “How COVID-19 is Redefining the Customer Experience.” The piece provides a deep dive into customer care data and trends and is on the market to read on DATAMARK.net.

DETAILED SEGMENTATION OF THE GLOBAL CONTACT CENTER OUTSOURCING MARKET INCLUDED IN THIS REPORT

This research report on the global contact center outsourcing market has been segmented and sub-segmented based on the service type, end-user industry, and region.

By Service Type

• Chat Support

• Email Support

• Voice Support

• Others

By End-User Industry

• IT and Telecom

• BFSI

• Healthcare

• Retail

• Government

• Others

By Region

• North America

• Asia-Pacific (APAC)

• Europe

• Latin America

• Middle East and Africa (MEA).