Only 30% of NZ firms work with outsourcing providers

AUCKLAND, NEW ZEALAND — A new report from the University of Auckland’s Business School found that only 30% of companies in New Zealand are engaged in outsourcing contracts. 

Professor Ilan Oshri, one of the report’s researchers, called this figure “quite surprising” considering the current pressures on New Zealand’s economy and labor market. 

“We are facing one of the biggest crunches in terms of access to skills to start with. Universities [in New Zealand] are currently producing around 4,000 engineers per year, and there is demand for about 40,000 software engineers across the tech space,” Oshri added.

The report also revealed that 44% of firms prefer to outsource to local providers, while 29% work with global service providers — mainly from Australia and the United States. 

Oshri stated that New Zealand needs to tap other countries for its outsourcing needs. 

“South Asia Pacific has been very successful in offering services and has been doing that for the last 25 years, and I think that New Zealand companies should be considering that seriously.”

Still, of those who are working with service providers, 40% said that most of their outsourced services fall under the Business Process Outsourcing (BPO) and Application Development and Maintenance segments. Meanwhile, 19% outsource their data analytics and AI-enabled services 

NZ businesses also correspond with traditional drivers of outsourcing, namely cost reduction (51%), access to skills (45%), and free-up resources (42%).