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The high costs of outsourcing: Vendor errors, customer mistreatment, and well‐being in call centers

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  • Sean O'Brady
  • Virginia Doellgast
  • David Blatter

Abstract

We analyze the impact of outsourcing on the well‐being of internal call center employees in the U.S. telecommunications industry. Our findings draw on mixed‐methods data. The qualitative findings suggest that internal employees experienced escalating job demands connected to errors by third‐party call center vendors and their employees due to additional work and intensified customer frustrations. SEM results show sequential mediation between the time internal employees spent correcting vendor errors, customer mistreatment of employees, emotional exhaustion, job satisfaction, and absenteeism. Employee autonomy over customer‐related decisions appeared to help workers manage these job demands and their effects on well‐being.

Suggested Citation

  • Sean O'Brady & Virginia Doellgast & David Blatter, 2024. "The high costs of outsourcing: Vendor errors, customer mistreatment, and well‐being in call centers," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 63(1), pages 80-103, January.
    • Handle: RePEc:bla:indres:v:63:y:2024:i:1:p:80-103
    DOI: 10.1111/irel.12338
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    References listed on IDEAS

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    1. Sean O’Brady & Virginia Doellgast, 2021. "Collective Voice and Worker Well‐being: Union Influence on Performance Monitoring and Emotional Exhaustion in Call Centers," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 60(3), pages 307-337, July.
    2. Annette Bernhardt & Rosemary L. Batt & Susan Houseman & Eileen Appelbaum, 2016. "Domestic Outsourcing in the United States: A Research Agenda to Assess Trends and Effects on Job Quality," Upjohn Working Papers 16-253, W.E. Upjohn Institute for Employment Research.
    3. Piotr Tarka, 2018. "An overview of structural equation modeling: its beginnings, historical development, usefulness and controversies in the social sciences," Quality & Quantity: International Journal of Methodology, Springer, vol. 52(1), pages 313-354, January.
    4. Rosemary Batt & Hiroatsu Nohara, 2009. "How Institutions and Business Strategies Affect Wages: A Cross-National Study of Call Centers," ILR Review, Cornell University, ILR School, vol. 62(4), pages 533-552, July.
    5. Stephen Deery & Roderick Iverson & Janet Walsh, 2002. "Work Relationships in Telephone Call Centres: Understanding Emotional Exhaustion and Employee Withdrawal," Journal of Management Studies, Wiley Blackwell, vol. 39(4), pages 471-496, June.
    6. Deborah Goldschmidt & Johannes F. Schmieder, 2017. "The Rise of Domestic Outsourcing and the Evolution of the German Wage Structure," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 132(3), pages 1165-1217.
    7. Arindrajit Dube & Ethan Kaplan, 2010. "Does Outsourcing Reduce Wages in the Low-Wage Service Occupations? Evidence from Janitors and Guards," ILR Review, Cornell University, ILR School, vol. 63(2), pages 287-306, January.
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