Do Outplacement Services Work?
For a business leader, there is hardly any activity more humbling than letting an employee go. When the business isn’t doing well, when that employee’s position is no longer necessary, when it isn’t the employee’s fault in the slightest, termination is a terrifying prospect for both parties. Fortunately, there is one service that ostensibly makes the process easier: outplacement.
Outplacement benefits help terminated employees regain their footing. Outplacement providers offer career counseling and training, assistance with application materials, support during the job search, and more. For a low monthly contribution, employees can almost guarantee security in the event of layoffs. It seems like a no-lose benefit — but does it actually work?
Because it isn’t often demanded by new hires, outplacement doesn’t often receive the press it deserves. In truth, outplacement is already relatively popular: Roughly two-thirds of U.S. employers performing layoffs offer outplacement options. Little over half — more than 58 percent — of laid-off professionals accept the service for one to three months post-termination; another 17 percent or so utilize outplacement for an additional one to three months. Some ex-employees choose severance packages or cash over outplacement assistance.
The costs associated with outplacement can vary depending on the programs offered and the prominence of a laid-off employee. On average, outplacement costs about $3,589 per employee. More specifically, senior executives usually command over $10,000, while hourly employees require an average of $1,472. Generally, higher-level employees receive outplacement services for a longer period and have access to more benefits than lower-level employees. For example, low-level services might include assistance writing cover letters and refining resumes, while high-level service includes career training, counseling, and coaching.
Benefits of Outplacement
If outplacement is so expensive and so energy-intensive, why should employers bother to offer outplacement programs? After all, the workers are going to be laid off, which means they are no longer an employer’s responsibility.
The truth is that laid-off employees pose serious risks to employers, especially if employers are already on shaky ground. Treating laid-off employees with respect and offering them support is a way to mitigate the risks of layoffs and better secure a healthy relationship with former employees. Immediately, outplacement services discourage disgruntled workers from filing lawsuits against their former employers. In the future, ex-employees who enjoyed a successful outplacement experience will likely encourage the employer’s positive reputation.
It should be obvious how employees benefit from outplacement: They are swiftly and effectively transitioned into a new paying position. Though termination is never enjoyable, outplacement can shorten the period of unemployment and prepare workers for new occupations with better opportunities for success.
Outplacement success is largely determined on the services provider. To maximize profits, some outplacement services providers try to serve too many outplaced employees with too few career coaches. Additionally, some providers offer poor career advice or fail to enhance workers’ job searches in a substantive way.
Thus, it is imperative that employers acquire outplacement benefits from a provider interested in quality of service. Employers should look for providers who emphasize individual time from career coaches and attention to application materials and applicable advice.
However, it is not entirely outplacement service providers who are responsible for bringing about post-termination success. Employers should practice the following in addition to offering outplacement to ensure layoffs go smoothly and their brands survive intact:
- Know what terminated employees need. Different types of professionals typically require different types of assistance to get back on their feet after a layoff. Employers should be aware of specific needs and find programs that supply them.
- Ensure accessibility of outplacement services. One of the most disheartening complaints from outplacement failures is an inability to access useful programs. Employers should opt for programs that come to workers, ideally through technology.
- Measure and track outplacement success. It is well-known that data helps businesses make informed decisions. Collecting data on outplacement success is useful for modifying outplacement programs to benefit more workers.
- Remember to attend to remaining employees. Outplacement shouldn’t mean that terminated workers receive more attention than those still employed. In fact, truly successful outplacement benefits encourage employees to stay engaged during layoffs.
A successful outplacement experience sees a laid-off employee finding work soon and seamlessly, retaining a positive relationship with the former employer, and avoiding the dangers of surprise unemployment. Considering this, it shouldn’t be difficult to understand why more employers and employees should seek outplacement benefits.
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