What Is Outplacement
and Why Is It Important?
In the age of social media and employer review sites, the employee-employer relationship has changed tremendously. Gone are the days when employees stayed with an employer for decades, building their careers within a single company. Today, people switch jobs often—and publicly share their opinions about their employers on Glassdoor, Facebook, and Twitter, especially when exiting the company.
This has made company transitions, such as layoffs and other involuntary employee exits, critical moments for companies concerned about brand protection.
To forestall negative ratings and reviews, forward-thinking companies seek to create positive offboarding experience for affected employees so that they depart on a positive note. Outplacement can play a key part in these efforts.
If you’re new to the topic of outplacement, you likely have a lot of questions about this benefit: What is outplacement? Who is it for? How can it benefit my company? Read on for answers to these and other frequently asked questions.
What is Outplacement
Outplacement is a benefit given by a company to exiting employees to assist them with finding new work. Generally, a company enlists the help of an outplacement provider to deliver outplacement services—such as career coaching, advice, and support—to affected employees.
While the goal of outplacement to support employees has remained constant, the shape of the service has shifted significantly in recent years to meet companies’ changing needs. When outplacement emerged in the 1960s, companies typically offered career assistance primarily to executives and upper-level employees, providing them with a satellite office, phone, and assistant to aid in looking for employment. Today, companies seek to offer outplacement not just to a select few but to all affected employees across every level of the organization—with the aim to better protect brand reputation and better support the employees who historically have been underserved in these times of transition. In addition, internet-savvy employees have come to expect convenient outplacement services, accessible on demand through the click of a button.
What is outplacement service
Outplacement services refer to a wide range of services that help people find new jobs, and they can vary according to the outplacement provider. Some of these include:
- individual or group career coaching
- cover letter and resume building tools
- resume review and editing
- job interview practice and coaching
- career interests and skills assessment tests
- guides on career-related topics, such as networking tips and personal branding
- access to information and research about target companies
- social media profile optimization
Because different outplacement programs offer different services, the quality of the programs can vary widely. For example, an outplacement program that offers one-on-one coaching with an experienced career development specialist and hands-on resume reviews by a professional editor is likely to be much more effective for the job seeker than a program that offers only group coaching with generic job search advice.
In addition, some outplacement programs require job seekers to make an appointment to meet with career coaches in a physical office in order to access services, while others allow users to get the help they need at their convenience through an online platform that gives them instant, on-demand access to career coaching and other tools.
Why is outplacement important
A common question comes up for HR leaders when they consider investing in an outplacement program: What is outplacement’s benefit for my company?
Outplacement serves three main interrelated purposes for organizations: strengthening brand reputation, reducing business costs, and creating a positive company culture. In addition, outplacement provides career transition support for exiting employees at the time they need it most.
Employers view outplacement as an investment that yields many results:
as our recent Outplacement Survey revealed, the #1 reason that employers offer outplacement was
the desire to do the right thing.
Benefits of outplacement
Stronger brand reputation.
Layoffs are a vulnerable time for a company’s brand. Exiting employees, if they feel they’ve been treated poorly, can publicly share their opinions about your company on Glassdoor and social media. In fact, Intoo’s Employer Branding Study found 66% of people choose to share their poor layoff experiences with others.
Offering outplacement to departing employees and supporting them at a challenging time in their careers can help forestall online backlash. If laid-off workers leave feeling that your company did its best to help them, you will be better able to mitigate long-term damage to your company’s reputation.
Reduce business costs.
Brand reputation has a powerful effect on your bottom line. For one, a positive brand reputation attracts and retains customers, while a negative one repels them. Our Employer Branding Study found 64% of consumers have stopped purchasing a brand after hearing news of that company’s poor employee treatment. Protecting your brand reputation with outplacement puts you in a better position to maintain and expand your customer base.
Brand reputation also helps you save money when recruiting employees. Harvard Business Review reports that when a company has a poor reputation, per-hire costs are $4,723 higher. Moreover, since outplacement allows you to retain better relationships with exiting employees, your company will be in a better position to attract boomerang employees—those who return to work for your company. As Forbes points out, these return employees are already familiar with your company culture and likely to succeed—while new hires have a failure rate of around 50%.
In addition, outplacement can help you avoid wrongful termination lawsuits, which can be costly: According to Inc., one in five small and mid-sized businesses will face an employment charge—at the average cost of $125,000 to defend.
Better company culture.
During and after a reduction in force, it is critical for companies to foster a positive company culture to encourage the productivity and loyalty of remaining employees. This is another reason why it is vital to offer outplacement to exiting employees, whom the remaining employees consider friends and colleagues. If departing employees report feeling supported by the company—and are able to land new jobs through an effective outplacement program—the remaining employees are likely to conclude that they work for a responsible and conscientious company that truly cares about its workers’ long-term wellbeing.
History of Outplacement Services
When Outplacement emerged in the 1960s, companies typically offered career assistance primarily to executives and upper-level employees, affording them the trappings of a familiar work environment—a satellite office, a phone, and an assistant—to aid in looking for employment. In the 1990s, full-time consultants became a common high-touch added service.
These two offerings—the “brick-and-mortar” provision of a satellite office and one-on-one or group coaching — continue in outplacement today and have defined the scope of services for the past five decades. But times have changed: Organizations face new challenges, but also benefit from new advantages, of a modern labor market.
Why offer outplacement
Clearly, outplacement offers key benefits that are of primary importance for any business organization. In fact, because outplacement’s value for the employer is so clear, many companies today offer outplacement solutions to outgoing employees as a common practice, according to TLNT.
But what is outplacement’s benefits for the employee? Read the next section to learn about the value of outplacement for people who are exiting your company.
The importance of outplacement services for employees
If your company offers an effective outplacement program, it can significantly speed up job seekers’ landing rates by helping them find and successfully attain new career opportunities that fit their interests and skills. However, the exact outplacement benefits an employee receives depends on the outplacement provider your company selects.
What is outplacement service that most benefits employees? One important benefit is one-on-one career counseling, which pairs job seekers with professional career coaches. Those coaches can provide advice on everything from conducting an effective job search to negotiating a competitive salary. In addition, many job seekers benefit from hands-on resume reviews and interview coaching by career development professionals.
In addition, a robust outplacement program provides job seekers with a suite of features, including assessment and personality tests, online cover letter and resume builders, job searching and notification tools, access to in-depth company research, social media networking guides, and more.
To select the most effective outplacement program for your company, consider the needs of your workforce alongside the success rate of the outplacement firm that will provide the services. You’ll want to choose a firm that has a proven record of helping users of its program find new jobs quickly, and consequently, boasts a high user satisfaction rating.
Outplacement support: employer ethics in the new labor economy
A globalized economy, social media, and technological advances continue to rapidly reshape the way we work:
- Corporate layoffs now come standard with outplacement services
- Social media and review sites have prompted more employers to become more vigilant in protecting their brand and reputation from bad press resulting from reductions in force (RIF).
- The development of more affordable solutions has allowed more companies of all sizes to include outplacement in their benefits packages.
Drawbacks of outplacement & how to counter them
While outplacement benefits are valuable, some companies may hesitate from investing in the service due to the cost and the desire to save on further expense during times of organizational change. In these cases, it’s helpful to keep in mind the many ways outplacement programs can save your company money. By reducing litigation, lowering cost per hire, and improving customer retention, an outplacement program often provides a high return on investment.
Moreover, companies today have the option of choosing virtual outplacement programs, which are generally more affordable for employers. Intoo’s cost-competitive outplacement program, for example, offers personalized career transition services such as one-on-one career coaching, hands-on resume review, and interview practice on an online platform, helping people land jobs 2.5 times faster than the national average.*
* Based on the national average duration of unemployment in January 2020. Source: Bureau of Labor Statistics.