The effects of outsourcing strategy on employees at the ministry of education

Abstract

Competitive pressure due to changes within the environment has made outsourcing to be seen as one of the strategies used by most organizations. The derivative impact of outsourcing on the human side of the organization, especially its impact on employees, has been only scantily researched. A move to outsource means that employees will be transferred from one company and/ or department to another or made redundant. The objective of the study was to determine the positive and negative effects of outsourcing strategy on employees at the Ministry of Education. The literature covers areas on the theories of outsourcing with special emphasis on the transaction cost theory and resource based theory. The reasons for outsourcing and its positive and negative effects on employees are also highlighted. The research targets 220 management and other staffs of the Ministry of Education (MoE) headquarters who were stratified into senior managers, middle level managers and other employees. Descriptive survey research design method was adopted and a sample size of 100 out of the targeted 220 respondents was requested to participate in the study of which 57 employees fully participated in the study. Data was collected by way of a questionnaires which were administered through drop and pick method. The questionnaire used in this study contained open – ended and closed questions. Data analysis was accomplished using Statistical Package for Social Scientists (SPSS). Descriptive statistics was used to summarise the data and the results presented using frequency distribution tables, charts and graphs. The study established that outsourcing strategy has posed some effects on employees at the MoE. The findings revealed that outsourcing strategy leads to access of specialized skills and inputs, enables employees to be experts in their professions, improves customer care, quality service delivery and leads to more career opportunity in terms of job progression. It also increases risks due to insecurity like theft and mistrust, reduces employees’ morale, job satisfaction, demoralizes employees and reduces innovation and operational risk. Some of the reasons that have compelled MoE to outsource its services include its cost savings and efficient service delivery. The study is the first in the field of the effects of outsourcing strategy on employees at the ministries and recommends further research on its effects on employees not only in the ministries but also other sectors.