Stress From Outsourcing can kill – we need to manage those staying as well

Stress From Outsourcing can Kill

I was struck by the similarity in the situation when people are laid off during redundancies and the stress caused by the move from one company to another during outsourcing – it strikes me that this is an under researched area and something we as managers should pay more attention to.

Pioneering studies in Scandinavia that took place some years ago, where centralized health care allows researchers access to vast databases of medical conditions and treatment, showed a strong link between downsizing, layoffs and illness. A study by Finnish researchers published in February (2004) in the British Medical Journal, found the risk of dying from a heart attack doubled among permanent employees after a major round of downsizing, with the risk growing to five times normal after four years. What was surprising about this study was that ‘surviving’ employees – those left behind – suffered as much stress as those who left. Those hit hardest by layoffs in this study – losing more than 18 per cent of their colleagues during the worst years of recession – suffered the highest risk of death from cardiovascular disease.

Two other studies in the same vein suggested that other forms of strain in the workplace can also affect health. An analysis of medical records for 24,036 Swedish workers from 1991 to 1996 found that in workplaces that underwent large-scale expansions, the workers were 7 percent more likely to take sick leave of 90 days or more and 9 percent more likely to enter a hospital for some reason.

What these studies showed was there is a relationship between work related stress and real physical outcomes – for those remaining as well as the obvious strains to those leaving. Outsourcing shares many of the factors that were shown to lead to this heightened risk and we should be aware that an over cavalier approach to managing people in this major change process could possibly lead to people dying before their time. It is not enough that we have to act carefully and ethically as other Blog writers on this forum have said we have to act with responsibility and care for people – in the final analysis if it could be shown we acted in an unfair and reckless manner in dealing with people during an outsource we also might find ourselves liable in law. More research is clearly called for in this area.