Is outsourcing counter-productive?

Outsourcing has a negative impact

According to research led by North Carolina State University, the increase in business practices such as outsourcing, hiring temporary workers and reliance on project-based teams is having a detrimental effect on employees and may pose long-term problems for employers.

The report that was published in industry magazine Social Problems stated that job satisfaction affects employee loyalty, workplace efficiency and quality of life. The study looked at data on working conditions, workplace relationships and behavior of professional employees over the last eighty years in a bid to see a pattern.

What they found was that increasing use of strategies designed to improve productivity and profits including layoffs, outsourcing jobs, replacing salaried employees with contract staff and assigning workers to short-term teams for individual projects had a negative impact on existing staff members.

For long-term employees, the impact among professional workers was often an experience of increased stress. The frequent changing of projects and co-workers also resulted in a greater sense of chaos at work, leading to increased fears about job security and a distrust of management.

Work affects every aspect of our lives

Lead author of the study, Dr. Martha Crowley, an assistant professor of sociology said, "We spend a great deal of our time at work, so it is an important part of our lives. If our work experience is unpleasant, it affects every aspect of our lives and ultimately it affects our ability to do our jobs."

"We found that, while these measures have succeeded in increasing performance pressure, there have also been unintended consequences."

The research team also identified other significant short-term and long-term implications for employers:

• Professionals are less likely to help co-workers because they are primarily concerned to protect their own jobs.
• Conflict between workers is detrimental to efficiency and quality and contributes to high levels of stress.
• Implementation of these business practices has resulted in less loyal employees, no longer so committed to company goals and more likely to seek new opportunities as the economy recovers.
• Retention will require additional incentives.

Crowley states that the report shows that by "treating your employees well, (it is) a way to boost your profits and productivity simultaneously without generating the unintended consequences of tactics based on fear."

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