The Advantages of Outplacement Services for Companies and Employees

March 06, 2024 by Rebecca Ahn

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Offboarding is always a difficult undertaking. Emotions run high, stress levels increase across the board, and uncertainty can spread like wildfire. Following proper layoff, reduction in force (RIF), and furlough procedures is important now more than ever if organizations hope to retain key employees, protect employer branding, and keep the business running during times of crisis. One of the best ways to do this is to provide outplacement services to displaced workers who are being fully laid off.

In this article, we will go over the advantages of outplacement for your organization, providing a high level of support to outgoing employees and showing surviving employees that they would also be taken care of if they were to be let go. We’ll also explore the possible disadvantages of outplacement and what to watch out for when selecting the right outplacement partner for your organization.

What Is Outplacement?

Before we dive into the advantages of outplacement services, let’s quickly review what outplacement is

Outplacement is a service that helps the layoff process run smoothly for both the company and those being let go. It works by providing offboarding support to your staff members in the form of expert career coaching, resume writing, social networking, job retraining, interview preparation, and much more. Modern outplacement firms use cutting-edge career transition technology and virtual learning centers to provide more flexible, global outplacement services that enable people to get back to work in a new role quicker than going it alone.

What Is the Role of Outplacement in Business?

It’s always a good idea for organizations to have an outplacement provider on hand to help during a reduction event. The cost of a tarnished employer brand can have long lasting effects on an organization’s brand, business, and bottom line. So it makes smart business sense to use outplacement anytime there is a layoff, even for small events or ‘one-offs.’

No one wants to leave their staff members without support during a layoff. Layoffs are one of the most stressful things about the working world. Outplacement provides a simple, less stressful pathway for workers to transition from one role to the other, while saving the employer potentially costly damage to its reputation, retention, and productivity. 

Layoffs are also a multifaceted event, so organizations need to follow proper procedure from start to finish. Outplacement comes in at the end of this process, when HR offers the services to support those employees being let go to help them find a new, meaningful role. When this is done right, there are many advantages of outplacement for those employees, as well as for their employer.

The Advantages of Outplacement for Employees

Now that you understand what outplacement is and the role it serves, let’s go a bit deeper and explore the advantages of making outplacement a part of your talent strategy. There are few key benefits that outplacement provides to impacted employees during a layoff or reduction in force (RIF) event which can make it a sensible business decision for employers.

Find New Work Faster

When there is termination, the first and most important thing about outplacement services is that they get the terminated employees back to work faster. Without such services that support career transition, a typical employee can take over a year to find new employment, but with outplacement services, they can find new job openings in a considerably shorter period.

With the technological advances of modern, virtual outplacement like Careerminds, participating employees can receive personalized career coaching and job search support that works with their specific needs, location, and schedule to help them more smoothly, flexibly, and quickly secure new, meaningful work. As a result, our outplacement participants land in new and better jobs in just 11.5 weeks—three times faster than the national average–with an impressive 95 percent placement rate.

Quell Negative Emotions

Layoffs can trigger many different emotions for those being let go. Impacted employees may feel angry, sad, scared, and a slew of other emotions, which they may feel the need to express by spreading that negativity online and through word of mouth. Even surviving staff members will feel the weight of a reduction event, wondering if they will be the next to go or worrying how their impacted coworkers will fare in their career transition. 

Offering outplacement services to impacted employees can help quell these fears and negative emotions, all across the organization, and provide a way for impacted employees to land a new role as quickly and painlessly as possible. This helps everyone feel supported and safe, which ties in nicely with our next outplacement benefit.

Feel Supported and Secure

Let’s face it, even workers at the best companies get laid off. But when a company puts outplacement services at the core of its benefits, it creates an attractive, employee-centric culture that makes employees feel secure, valued, and motivated. This level of care and support won’t go unnoticed. 

By providing outplacement, employees will feel emotional support, knowing their employer cares about them and will continue to support them even when they are let go. They will also feel supported financially through the ability to find new employment quicker, as well as any severance package offered to help them survive in the interim. 

Receive Customized Support

Top outplacement firms also understand how to customize their services based on the participating employee’s role and level. For example, the strategy for executive outplacement will vary from the job search of an entry level employee. This also contributes to the clear advantage of outplacement services to provide a positive experience for all impacted employees.

All in all, the benefits of outplacement far outweigh the cost of implementing a quality program. It’s already difficult enough on both impacted employees and their employer. Companies who offer outplacement support as part of their core value and social responsibility will empower their former employees in their search for new, meaningful work and help ensure that the layoff doesn’t get ugly for either party.

Outplacement firms like Careerminds can extend the company’s support even further and work in tandem to help their impacted employees through the transition process with unparalleled outplacement services to provide these invaluable benefits for both the employees and company.

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The Advantages of Outplacement for Companies

Now that we know what outplacement is and what service it provides outgoing staff, what are the benefits of outplacement services for the companies that provide them? Quite a lot, actually. The benefits of outplacement services stretch far beyond what they do for the employee, though the employee benefits should be at the forefront when considering what service to buy

Let’s discuss what benefits outplacement provides to the employers, and how it can seriously boost a company’s overall performance and brand. Outplacement is a way to show that you still care about the success of your employees even when they have to be let go. It provides them with a path to get back to work faster in a new, meaningful role they truly want to be in. 

It’s one of the best things a company can give their staff members during a layoff or RIF. Sure, a strong severance package is a great start, but providing outplacement services as well really rounds out the package and allows employees to flourish.

Protect Business Reputation and Brand

Layoffs and other reductions in force are a fact of life in the business world. Despite that fact, though, every time one of these events occurs, it puts your company at risk of public scrutiny. And rightfully so. When a layoff happens, no matter the scale, people’s lives can be upturned. While many reductions in force are needed for the overall business to continue marching forward, that fact is usually lost on the general public. This is why, when it comes time to perform a layoff, HR should take as many precautions as they possibly can to ensure it goes smoothly and that the outgoing employees are not resentful.

This means offering a great severance package that includes outplacement services. By providing outplacement, you show your employees that you still care about them, even though they had to be let go. You also show your “surviving” employees that, if this were to happen to them, they would also be in good hands. So one of the benefits of outplacement services is that it shows the world, your employees, and the rest of your staffers that you don’t throw people out on the street, which will go a long way to helping protect your company’s reputation both internally and externally. 

A company’s brand and image are everything. In today’s world, word of mouth is amplified by the internet. Employer review sites like Glassdoor make it easy to leave negative reviews about businesses they’ve worked at. This can be disastrous for a company. Not to mention, layoffs are just about always viewed in a negative light, often stemming from poorly executed layoff and RIF events that can drastically decrease an employer’s brand. 

On the other hand, great offboarding practices like outplacement can help protect against the possibility of a tarnished employer brand. It demonstrates your company’s corporate responsibility towards current and former employees, and showcases your commitment to providing the solutions that modern professionals need, thus reinforcing a positive view of the company by the staff and community. This is precisely why Careerminds clients score 16.5 percent higher on Glassdoor reviews. 

Reduce Stress Across the Board

Even if you are sure that your reputation is not on the line with your layoff event, it will still cause an immense amount of stress for everyone involved. HR is tasked with notifying and processing the outgoing employees, which can be an extremely emotional event, especially if these employees have been working for the organization for many years.

By providing outplacement, the HR professional tasked with handling the whole ordeal can sleep better at night knowing that the employees will be taken care of and have a team of professionals working alongside them to get them back to work in a new, meaningful job.

Like we mentioned above, the benefits of outplacement services are also not lost on your surviving employees who may feel shaken up when a layoff event occurs. This stress has the potential to trigger a wave of turnover because people see that their jobs are not safe. Outplacement can ease these tensions by at least showing surviving staff that they will be treated well even if their jobs were ever to get cut.

Boost Employee Morale

Workforce reductions and layoffs can have a negative effect on the morale of the surviving employees. But if handled properly, the whole process can instead enhance their dedication and motivation. 

Offering outplacement services to the laid-off employees is one way to show those remaining that they are working for a company that cares about them, and will have something to fall back on if they ever get laid off. This can have a positive impact on their morale, commitment, retention, and productivity. When you’ve established a precedent of taking care of your people, you become a company that people want to work for. 

Maintain Productivity and Retention

In a similar vein, the boost to employee morale and motivation from providing outplacement can also help have a positive impact on the productivity and retention of your remaining employees. Staff who feel supported and valued are more likely to work hard for you, and feel invested in the success of the organization.

As a result, you will have an easier time retaining your top surviving talent, and help them maintain the same–or even improved–levels of productivity. A more productive staff improves efficiency, reduces redundancy, and helps your entire organization reach its business goals. Your organization will be better equipped to survive the reduction event and continue to thrive.

Support Company Values

Beyond the company brand, outplacement also protects the company values and reinforces them with outgoing and remaining staff. Most companies have core values that highlight how invaluable their staff is. There is substantial data that supports the connection between value-driven organizations and long-term productivity. Providing outplacement packages to employees demonstrates that the company’s core values aren’t just platitudes.

Mitigate the Risk of Legal Action

If an employee is laid off, they may feel aggrieved and want to sue the company. Whether the grievances are real or perceived, defending an unlawful termination is expensive, time-consuming, and damaging to the morale of the remaining staff, likewise injuring the reputation and perception of the company. 

Outplacement services can help protect the employer from these risks when letting employees go. Offering outplacement–especially as part of a severance agreement–can reduce the anxiety of the laid-off employees, maintain healthy relationships in the office and, therefore, reduce the risk of wrongful termination lawsuits.

Save Costs with Strong Strategic Partnership

As we said before, layoffs are a simple fact in the business world, which means that it is likely that your organization will have to undergo them from time to time. Because of this, it’s important to make sure that the outplacement firm you decide to go with is a strong strategic partner who can guide you through the layoff event with minimal stress and cost.

By having a firm on retainer–by the way, Careerminds doesn’t charge a retainer fee (just saying)–you can feel more free to hold downsizing events. Even though they are often painful, ignoring the need to have a layoff can be detrimental to your business, especially if your company is starting to take a financial hit. 

Outplacement helps your outgoing employees find new work sooner, which reduces your unemployment costs. Including outplacement in severance packages can also serve as a bargaining chip during an individual compensation negotiation, offering terminated employees tangible unemployment benefits that are less costly than other severance options. What’s more, hiring a modern, tech-driven outplacement partner who offers unlimited, virtual outplacement support means your employees will be better equipped to find that new, meaningful work sooner, thus saving both them and you even more money. 

This is one of the benefits of outplacement services that few people want to think about, but is 100 percent logical. Outplacement enables you to plan your workforce and do what you need to do to ensure your business continues being profitable while offering your current employees proper benefits.

What Are the Disadvantages of Outplacement?

While we’re discussing the many advantages of outplacement services for companies and their impacted employees, it’s only fair to explore the possibility of any downsides you may experience in offering these services. While these disadvantages aren’t true across the board, they are good to be aware of and watch out for as you search for your ideal outplacement partner.

Paying Unnecessary Costs

Probably the most common disadvantage of outplacement is the excessive or unnecessarily high costs you may incur if you choose your outplacement provider poorly. Old traditional outplacement firms may try to charge you retainer fees, or put restrictions on their services with term limits which may cut off support to your impacted employees before they’ve found new work and 

Modern, tech-driven outplacement firms like Careerminds won’t impose any of these costly requirements or restrictions. We never charge retainer fees or use term limits. In fact, we are the only outplacement firm to offer unlimited services and support for your participating employees “until placement”–meaning until they are successfully placed in new, meaningful work. We believe displaced employees who have their worlds turned upside down as a result of a layoff should receive the support they need all the way across the finish line. 

So be sure you keep an eye out for these unnecessary costs that may start to outweigh the advantages of outplacement services you may be considering for your organization.

Competitors Hiring Your Former Talent

While a RIF might help a company balance the budget in the short term, it’s almost never good for the overall economy in the long term. Small and large businesses alike hope for a healthy economy because that’s the best climate in which to do business. 

When you use a service that gets people back to work faster and that provides skills that jobseekers really need to compete in today’s market, it sends qualified, confident people back into the workforce. Outplacement firms match companies that are letting go of employees with those that need them, thus enabling laid off employees to be re-employed in a much shorter period of time. 

That helps the economy, which benefits everyone. But a possible downside for the company conducting the RIF is that their former employees may find new employment in a competitor company. This, of course, depends on the details of their employment and severance agreements. But even in this case, it’s a small price to pay compared to the advantages of outplacement with a smooth, stress-free, and cost-reducing reduction event.

Outplacement Advantages: Final Takeaways

Outplacement is a great addition to any organization’s talent strategy, helping to smooth over one of the most stressful parts of the employee lifecycle: offboarding. By providing a well-rounded outplacement service, you can ensure that layoffs go over without a hit to your reputation. 

You can show your surviving staff that they will be taken care of if it happens to them, and you can reduce the levels of stress that come with any reduction in force. Best of all, outplacement can help you feel better about deploying a possibly company saving workforce overhaul. If you are truly concerned about your employer brand, retention rates, and engagement levels, this area needs as much focus and attention as hiring and developing.

Outplacement also provides immense benefits for your impacted employees. If successful, your employees will feel supported in their career transition, and be able to move on to a new, meaningful job before their severance check is spent, saving them money and stress as well. This allows you to continue being an employer of choice, because your staff members will understand that you truly do care for them even after they have exited the organization.

It is vital that you consider all of these key benefits and elements in your search for the right outplacement partner for your organization. After all, using the wrong outplacement provider can be just as bad as not providing it at all. But organizations that switch to Careerminds outplacement solutions are able to save 50-70% off their current outplacement provider, and reinvest those savings back into programs that solve key business issues like developing and engaging top talent.

If you want to learn more about the advantages of outplacement at Careerminds, we’d love to chat with you. Click below to schedule time with one of our experts and see if Careerminds is the right partner for your organization’s outplacement needs.

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Rebecca Ahn

Rebecca Ahn

Rebecca is a writer, editor, and business consultant with over 10 years of experience launching, managing, and coaching small to midsize companies on their business, marketing, and HR operations. She is a passionate people advocate who believes in building strong people, teams, and companies with empowering culture, content, and communication that facilitates meaningful results at every level and touchpoint. In her spare time, Rebecca is an avid traveler and nomad who also enjoys writing about travel safety and savvy. Learn more on her LinkedIn page.

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