The demand for outsourced backend engineering continues to surge as businesses grapple with talent shortages and rising technology budgets. Global IT spending is rebounding – Gartner projects worldwide IT investment will top $5.7 trillion in 2025, with software and IT services growing in the mid-teens percentage range. Deloitte says that 80% of executives aim to keep or grow their outsourcing investments. At the same time, market data show a booming services industry: software and IT spending fueled a 14% increase in 2025 to $1.239 trillion. Belitsoft, a custom software development company with offices in the USA and Europe, reports that both entrepreneurial and established companies are responding by re-orchestrating how they source tech talent. They blend offshore teams, nearshore partners, insourced centers (GICs), and AI-driven automation.

Many companies in North America are changing how they source goods from around the world. According to TechRepublic, 51% of U.S. companies still hire IT workers from other countries, but a growing 27% now only hire workers from the U.S. In other words, after years of mostly outsourcing work to other countries, American companies are starting to look more at partners within the US.

The GitHub developer report also states that the global developer community is growing rapidly, with an unprecedented number of developers joining open-source projects and AI projects on GitHub. 

This influx of new developers, particularly those outside traditional hubs, is easing some talent pressures, but McKinsey warns that demand for tech skills still outstrips supply. A recent study found that only 16% of executives believed they had sufficient tech talent. 60% said that not having enough skilled workers was the largest problem with digital transformation. In fact, McKinsey notes that Europe’s talent gap will remain very large – by 2027, demand may be 2-4 times greater than supply. 

Because of these facts, businesses in North America and Europe are doubling down on outsourcing to get specialized skills, speed up development cycles, and keep costs down.

The Future of the Global Outsourcing Market

Several industry reports say that IT outsourcing is growing quickly. For example, Deloitte’s Global Outsourcing Survey shows that managers are still giving more work to outside companies. Eighty percent plan to keep or increase their outsourcing spending, and half already use outside companies for important tasks like research and development and marketing. 

Even though some companies are bringing back-office work in-house, overall spending on vendor-delivered services is still going up. Rising factors include a relentless search for talent and agility – Deloitte notes that skilled talent and agility join cost reduction as key drivers of outsourcing decisions.

This growth is backed up by independent forecasts. Grand View Research says that the worldwide IT outsourcing business was valued more than $740 billion in 2024. Statista data suggested it would l be worth between $780 and $800 billion by 2025. Other studies also put the annual growth of outsourcing in 2025-2026 in the mid-to-high single digits. For example, a research summary says that IT outsourcing made about $744.6 billion in 2024 and will make more than $900 billion by 2030. There is a significant demand everywhere. Outsourcing is still the most common way to get things done, but specialty roles are growing the fastest.

Dynamics in North America and Europe

North America

Outsourcing remains strong in the US and Canada, but it is undergoing a change. According to a TechRepublic survey, only 27% of U.S. organizations outsource exclusively onshore, while 51% do so offshore. Due to issues with quality, security, and geopolitics, several large U.S. companies are exploring “nearshore” options, such as Latin America, or bringing back service centers in the U.S. 

Two-thirds of businesses reported that recent global events, including conflicts and the pandemic, had impacted their plans for sourcing goods. This led them to be more likely to collaborate with partners in their own country or in a country that is friendly to them. A Deloitte report shows that North America still spends the most money in fast-growing fields like healthcare IT outsourcing.

In general, North American companies are finding a balance between cost and control by keeping core functions in-house and hiring outside experts for harder-to-find skills. Citing talent gaps and cost pressures, one Forbes report noted that U.S. companies outsourced hundreds of thousands of jobs (particularly in IT) to providers offering up to 70% cost savings.

Europe

European companies are also experiencing difficulties in finding tech workers, so they hire a large number of people from other countries and utilize a lot of global in-house centers (GICs) and third-party vendors. The European tech survey conducted by McKinsey suggests that there will be a significant shortage, and the gap in the EU could grow to 1.4-3.9 million by the next year.

In Europe, the emphasis on nearshoring is particularly strong – markets like Eastern Europe (Poland, Romania) and the Eurozone have seen booming demand. German and Nordic companies often hire local partners to do work on auto software and embedded systems in fields such as automotive and industrial technology. European CIOs often choose providers within the continent or trusted allies because of strict EU data and security regulations.

Important Services and Information by Industry

When it comes to outsourcing backend operations, different kinds of enterprises have distinct needs.The following industries stand out in North America and Europe.

FinTech (Finance & Insurance Technology)

Banks and new fintech companies are quickly upgrading their main systems. They need backend teams that are skilled at working with cloud-native architectures, microservices, and processing data in order to build real-time digital banking, payment, and trading platforms. A Deloitte fintech survey suggests that businesses should strategically use outsourcing and generative artificial intelligence to access skilled workers in specific fields.

In the real world, this means finding developers who can perform machine learning tasks such as identifying fraud and modeling risk using data pipelines, high-throughput APIs, and distributed ledgers. According to recruiters in the field, some of the most in-demand fintech skills are DevOps/SRE, cloud (AWS, GCP, and Azure) engineering, and AI/ML integration. For instance, companies often hire outside teams to build payment engines that can scale or to use AI to personalize their services. 

Life Sciences and Health Care

Healthcare providers and insurance companies are spending a lot of money on digital infrastructure for telehealth, patient data, and analytics. The global healthcare IT outsourcing market is already substantial and growing – one analysis forecasted it would reach approximately $79.6 billion by 2025 (from approximately $74 billion in 2024), with North America representing 56% of the market. In healthcare, outsourced backend developers work on data platforms, AI-powered analytics, electronic health records (EHR) systems, and ensuring that different systems can communicate with each other (FHIR/HIPAA). 

For instance, McKinsey notes that as AI and data platforms mature, providers and payers are likely to continue seeking outsourced support to deploy practical use cases, creating huge opportunities for specialized platforms and analytics vendors. Some common projects include making cloud-based data lakes for patient analytics, telemedicine backends, and AI tools for imaging or drug discovery. 

One report suggests that outsourcing helps healthcare organizations manage a large amount of data and adhere to regulations. It also gives internal IT more time to develop new patient-focused initiatives. Healthcare data engineering, ensuring the cloud is secure (HIPAA/GDPR), security, telehealth platforms, AI/ML for diagnostics, and mobile health apps are all essential skills.

Insurance (P&C, Life, Reinsurance)

Insurance companies are putting policy management, underwriting, and claims online. During times of significant change, insurance companies often hire outside firms to fill skill gaps in their IT teams. Cost is not the only reason to outsource; Datos Insights states that insurers do it when they need extra skills or space to grow. Some of the most important trends in insurance technology currently are AI underwriting and fraud detection, processing IoT data for usage-based insurance, and updating outdated systems. 

Carriers work with tech partners to design machine learning pipelines for risk modeling, big data platforms for telematics, and containerized microservices for digital claims APIs. Individuals with expertise in data privacy, actuarial modeling platforms, and blockchain (for contracts) are in high demand. AI/ML (automatic underwriting), data engineering (telemetry and analytics), moving existing policy systems to the cloud, DevSecOps for compliance (Solvency II and GDPR), and connecting APIs with brokers and other parties are some of the most in-demand skills.

Automotive & Mobility

The auto industry has become as much software as it is hardware. OEMs and suppliers are quickly switching to software-defined vehicle (SDV) architectures, electric powertrain software, and advanced driver-assistance systems (ADAS). This has led to a huge increase in outsourcing. People who have a lot of knowledge about vehicle software are needed for tasks such as battery management, infotainment, and connectivity (over-the-air updates and telematics). 

One of the most important trends is the shift from designing hardware to working with full-service embedded software engineering partners. For instance, a lot of car companies hire outside help to do difficult tasks such as making Linux-based vehicle cores, connecting services to the cloud, and keeping EV charging networks safe from hackers. The shift to electric vehicles and hybrids is a major reason for growth. 

The IEA states that sales of electric cars increased by 25% a few years ago. Also, OEMs that do not have enough software bandwidth in-house are hiring outside companies to perform engineering for EV batteries, charging, and motor control. Some of the most important skills required are writing embedded C/C++/Rust code, working with AUTOSAR systems, building cloud backends for connected cars, using real-time simulation tools, protecting cars from cyber threats, and integrating mobile apps.

One thing is clear in all of these areas: you need to know how to use AI and data, as well as how to use cloud-based tools. Companies in the fintech and healthcare fields want outsourced teams to build modern architectures such as microservices, containerization (Docker/Kubernetes), CI/CD pipelines, and data platforms. These architectures are often hosted on public clouds. 

Because rules are becoming increasingly stricter across the board, they also need to have a lot of knowledge about security and compliance. Studies show that about 77% of businesses seek help from outside sources for at least some of their cybersecurity work. Many businesses now also include security in DevOps (DevSecOps) with partner companies. As more and more people use the cloud, jobs like DevOps engineers, SREs, and cloud architects are also among the fastest-growing outsourced jobs.

Outsourcing allows startup founders and CTOs to quickly build skilled backend teams without having to wait a long time to hire them. When big organizations and procurement leaders outsource, they have more choices. They can adjust how many resources they utilize, swap between US and foreign providers, and sign contracts that tie spending to performance. 

Deloitte says that vendors are moving toward models based on value and outcomes as firms focus on their core and front-office functions to get more out of what they currently have. This is why people who work in procurement are looking for partners who can help them manage AI-powered digital workforce, offer a measurable return on investment (usually 15-30% cost reductions), and integrate with the systems they already have in place.

About the Author:

Dmitry Baraishuk is a partner and Chief Innovation Officer at a software development company Belitsoft (a Noventiq company). He has been leading a department specializing in custom software development for 20 years. The department has hundreds of successful projects in AI software development, healthcare and finance IT consulting, application modernization, cloud migration, data analytics implementation, and more for startups and enterprises in the US, UK, and Canada.