Abstract:

While many studies on outsourcing have identified its advantages and disadvantages from an organizational perspective, there has been insufficient attention paid to the impact of outsourcing on employees. This case study of IT outsourcing in a leading Australian bank explores its effect on the well-being of IT professionals working there. Despite the success of the outsourcing initiative for the organization, evidence from an intranet forum established in the six months prior to the outsourcing transition and surveys conducted of remaining staff two years post-implementation revealed a high degree of nonacceptance by both sets of workers. This occurred despite management’s attempts to communicate with staff. The study concludes that the disaffection of staff resulted mainly from a lack of consultation during decision-making steps and a sense of powerlessness to influence management. Suggestions are provided as to how outsourcing could be accomplished in ways that improve employee acceptance and reactions to change.