Europe beats US at Outsourcing Game

Europeans have now fully embraced outsourcing - whether onshore or offshore - as the region's market share jumps from 37 per cent to a staggering 56 per cent, overtaking the US as the global outsourcing market leader.

Four factors that explains this are

(a) the depreciation of the US currency with respect to other currencies which makes off shoring much less attractive

(b) the general slow down of the US economy which has increased the workforce pool

(c) the fact that major contracts are a rare commodity in the US, with major outsourcing contracts shrinking both in size (down 38 per cent to Eur 123m) and in quantity (53 per cent less than in 2006) and

(d) US companies are increasingly adopting the multi-sourcing model which means that bigger contracts are being broken down to reduce risks.

The report produced by the TPI shows that outsourcing is increasing, although at a slower rate. Indian-based service providers are the big winners having won nearly a quarter of the deals on which the TPI has advised.