Human Resource Outsourcing, Employee’s Turnover Intentions and Performances in a Mediatory Moderated Framework

Abstract

Purpose: HR outsourcing has led to many challenges; one of them is higher turnover intentions. The bigger challenge is to find out how outsourcing contributes to turnover intentions. For this, we proposed a theoretical framework identifying the role of different factors contributing to this relationship. We proposed that HR outsourcing decrease Motivation among employees, also affect their Job Satisfaction, it further leads to strained Employee Relation as well as lower Commitment among employees. We also hypothesize that employees with higher Qualifications and Experience have a more profound effect on outsourcing and turnover nexus.

Design/Methodology/Approach: The empirical validity was established by conducting a survey using a close-ended adopted questionnaire gathered from 200 employees working in different sectors of Pakistan. Data were analyzed using confirmatory factor analysis and structured equation modeling.

Findings: The result fully supported our theory and showed that human resource outsourcing increases the employee’s turnover intentions through the mediatory role of Motivation, Job Satisfaction, Employee Relation, and Organizational Commitment. We also found a significant complementary effect of Qualification and Experience on outsourcing turnover relationship. However, the effect of Qualification on performance was not substantiated.

Practical Implication: From a practical standpoint, the results may guide the development of human resource management policies and practices aligned with the reality and the needs of outsourced employees, thus fostering their motivation, job satisfaction, employee relation, organizational commitment, performances, and reducing turnover intentions.

Originality/Value: This is a novel attempt to combine these diverse factors into a structural model in order to better assess the outsourcing turnover relationship. Moreover, on the empirical side, no such study was undertaken in the Pakistani context.

Keywords: Human Resource Outsourcing, Motivation, Job Satisfaction, Employee Relation, Organizational Commitment, Turnover intentions, Employee