Stress levels among outsourced employees are 24% higher than five years ago, and half of them feel that stress is affecting their work.
Interviews with 120 IT staff by services firm Steria highlighted the need for good communications and management, particularly during the transition period, when stress levels are highest.
Nearly one-third of employees said that uncertainties over their work led to disturbed sleep, damaged family relationships and higher error levels.
Forty-three per cent of public sector employees and 60% in the private sector felt they were badly treated by their original employer during the transition.
More than half had problems with poor communication, while 40% said that the contract relationship was poorly managed, and 38% said there was mistrust between IT and non-IT staff.
However, two-thirds believe that outsourcing has given them more opportunities and a more marketable CV. Around 40% said their salaries had improved and a third said their working hours were better and more flexible.
The majority thought that service levels had improved through outsourcing and nearly 60% said that computer facilities were better managed.
Many felt that outsourcing had improved PC support services, led to better management and reduced IT costs.
The survey showed the majority of staff were aware of the Transfer of Undertaking Protection of Employment (Tupe) regulations, which protect employees during outsourcing. However, 24% wrongly thought that Tupe guarantees them employment.
Handling the outsourcing transition
Employers should be open with their staff and seek their views before they outsource their IT departments, a leading psychologist said this week.
Cary Cooper, professor of organisational psychology and health, said that poor communication could exacerbate stress levels and damage the business.
"Outsourcing is on the increase but we find the impact of it is a decline in loyalty, morale, motivation and an increase in job insecurity," he said.
Cooper, BUPA professor at the University of Manchester Institute of Science and Technology, also suggests that employers specify outsourcing contracts, that ensure suppliers do not exploit staff by overworking them.
"They can manage the hours these people put in. They should ensure that the outsourced company is not overworking staff. They can say 'you are burning out' our former employees, we don't like that, it is not good for our image," he said.