Previous studies reveal that outsourcing practices generally have negative consequences for employee job satisfaction. As employee job satisfaction is a precursor of employee withdrawal, which is an expensive loss to organizations, it is important to design appropriate policies and environment to reduce such threats. In particular, scholars and practitioners alike highlight the importance of learning new knowledge and ideas as the main benefits of government outsourcing. Therefore, this study develops and tests a model that estimates the effect of government outsourcing on employee job satisfaction at the organizational level while exploring the possibility that encouraging knowledge sharing among employees in an organization can result in alleviating the anti-outsourcing sentiment among employees. The findings of this study relying on U.S. federal agency data from 2010 to 2017 suggest that government outsourcing can improve employee job satisfaction through internal management practices, such as promoting knowledge sharing among employees.
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