Journal of Reviews on Global Economics, 2019, 8, 1143-1156 1143 E-ISSN: 1929-7092/19 © 2019 Lifescience Global Effects of Outsourcing on Employment Generation: Evidence from the Telecommunications Sector of Uganda T. Nalubega 1 , D.C. Kasumba 2 and D.E. Uwizeyimana 1,* 1 School of Public Management, Governance & Public Policy, University of Johannesburg, South Africa 2 Mobile Decisioning Africa, Uganda Abstract: Outsourcing has emerged as a globally embraced business strategy that involves restructuring geared at improving flexibility, inducing innovation and creativity, whilst simultaneously creating greater employment opportunities. Telecommunications companies worldwide have adopted outsourcing strategies leaving them to concentrate on their core business. In Uganda almost all telecommunications companies have also followed the outsourcing trend. However, despite the increasing adoption of outsourcing strategies, there is a dearth of literature about how outsourcing in the telecommunications sector has contributed to the generation of employment in Uganda. MTN Uganda and Airtel Uganda were selected as study sites and a mixed-methods approach was followed for the data collection and analysis. The quantitative data was analysed through descriptive statistics and inferential analysis using version 23 of the statistical package for social sciences (SPSS). The descriptive statistics were analysed, confirming that a multitude of business functions are being outsourced to other companies in Uganda. Correlation analyses were performed for purposes of generating inferential statistics and the findings revealed that the outsourcing of Human Resource Management (HRM) functions, Information Technology (IT) functions and Facility Management (FM) functions by the telecommunications companies in Uganda has a significant positive relationship with employment generation in Uganda. The qualitative data was analysed using thematic analysis and content analysis, with these findings supporting information revealed through the quantitative analysis. Based on the study’s findings, the researchers recommend that more activities and/or services should be strategically outsourced by companies in the Ugandan telecommunications sector so as to maximize flexibility, and induce innovations and creativity while creating increased employment opportunities in the country. Keywords: Telecommunications sector, Outsourcing, Information technology, Human resource Management (HRM), Facility management (FM), employment generation. 1. INTRODUCTION The concept of outsourcing refers to “the practice of having certain non-strategic activities or business processes done outside a company instead of having an in-house department or employee handle them” (Nakanjako 2016:6). These “functions can be outsourced to either a company or an individual” (Tomas and Victor (2006:52). Globalization has increased the market’s space and the demand for specialized service providers to meet the varying needs of the market economy. Numerous organizations in both the public and private sector are outsourcing some of their services to specialized firms so as to focus on maintaining their competitive advantage (Ancarani & Capaldo 2005:234; Mahmud et al. 2012:74; Patil & Patil 2014:401; Tallman 2011:3). In the earlier stages of this outsourcing practice, the subject generated great controversy in many countries, as many people who opposed it argued that it caused a loss of domestic jobs, particularly in the manufacturing sector (Patil & Patil 2014:411; Tallman 2011:3). In Africa, outsourcing has been welcomed in both the private and public sectors. A study by Badenhorst- *Address correspondence to this author at the School of Public Management, Governance and Public Policy, University of Johannesburg, South Africa; Tel: +27 11 559 5115; Fax: +27 11 559 4123; E-mail: dominiqueu@uj.ac.za Weiss and Nel (2008:631) indicated that the South African government had adopted the outsourcing of its none-core, non-strategic activities and a few of its strategic activities so as to improve cost efficiency and services delivery. From this study, complicated strategic services related to engineering and IT were frequently outsourced because of the availability of the required technology and insufficient domestic skills (Badenhorst-Weiss & Nel 2008:632). The introduction of an incentive programme by South Africa’s Department of Trade and Industry (DTI) on Business Process Outsourcing (BPO) in 2012 showed an increase in investment by foreign countries in the South African economy. Within the same period, Business Process enabling South Africa (BPeSA) conducted research in the Western Cape province and reported that numerous jobs had been created for South Africa with over 65% of the clients based in foreign countries (BPeSA 2012:1). In Uganda in 2010, the Ministry of Information Communication and Technology, through the National Information Technology Authority-Uganda (NITA-U), developed policies, strategies and initiatives to enhance BPO so as to attract foreign investors into the country (NITA-U 2012:1. These strategies led to an incremental increase in the services and products offered in the Ugandan telecommunications sector.