The Impact of knowledge task off-shoring on the employment relationship of knowledge workers

Abstract

Organisations worldwide are continuing to offshore more and more of their work tasks across national boundaries, to countries with lower labour costs. These offshored tasks, which were performed by local knowledge workers in the past, now also include activities like research, development, and innovation. In a time where growth industries are those with the highest degree of knowledge work, and the most profitable organisations are those with the most knowledge workers, the importance of retaining these valuable resources by ensuring a healthy employment relationship cannot be over emphasised. The purpose of this study was to investigate the impact that knowledge task offshoring has on the employment relationship of knowledge workers. A quantitative research methodology was followed, and the responses of 85 individuals were examined through the theoretical lenses of the psychological contract, organisational commitment, turnover intention and job insecurity. The main findings of the research was that offshoring resulted in higher levels of perceived psychological contract breach and violation scores, while it did not have any negative impacts on the scores for job security, turnover intention, organisational commitment or perceived employer or employee obligations associated with the psychological contract.