Why Outplacement Needs to be a Part of Your Severance Agreement

We all know the importance of severance agreements when offboarding employees. Not only do these documents help protect organizations from wrongful termination lawsuits in exchange for a severance payment, that payment helps employees make the transition to a new role.

While severance payments do help, they really only buy an outbound employee time. In fact, it creates a financial deadline for employees to get back to work or risk even greater financial hardship.

This leads to higher levels of stress during the job hunt, which can lead to your ex-employee not finding a job and turning against your organization, opening up the possibility to damage or tarnish your employer brand.

So what can you do? Well, the real goal in offboarding should be to set up your employee for success, taking out as much of the stress as possible.

To do that, there’s no easier way than attaching outplacement services to your severance package.

Severance agreements are a purpose-driven document. They exist to protect the organization from legal issues. As a side-effect, they also help the staff member receiving it.

Outplacement services, on the other hand, help the employees so much that they end up protecting the employer’s brand in the long run. Not only does this help keep the court of public opinion at bay, it also shows the retained staff members – who are likely to be anxious and stressed after a RIF or layoff – that if they were let go, they’d be taken care of.

As a quick refresher, outplacement is a service that is offered to outbound employees that helps take the stress out of career transition. Top-tier outplacement firms help employees by pairing them with dedicated, one-on-one career coaches that can work with participants during every stage of the job hunt. Cutting-edge technology is also employed to optimize resumes and LinkedIn profiles, while other systems help with easily applying to listings and create a learning environment for job seekers to hone their skills.

In the end, outplacement supports transitioning employees based on their needs. The best outplacement services also continuously support participants until they land a new role, allowing them to always have someone to lean on.

You can learn all about the outplacement process here.

As you can see, outplacement covers much more than a severance payment. It literally helps people transition to a new role, which reduces stress levels across the board and also helps to protect your internal and external corporate brand.

Let’s look into that a bit more.

While severance agreements help keep you out of the court of law, outplacement services keep you out of the court of public opinion.

As we touched upon briefly before, outplacement shows your retained staff members and the world at large that you care enough about your employees that you are willing to help them even when they make an exit from your organization.

By providing outplacement as part of a severance package, you help reduce the survivor guilt felt by those employees that have been retained. During any RIF or layoff event, your retained staff members are – for the most part – going to get a bit anxious.

Some will wonder why their friends and coworkers were let go while they were allowed to stay. Some will wonder about what would happen to them if they were let go and if they are, indeed, next.

Outplacement is a clear signal that your organization understands that layoffs are tough and stressful. It shows that you are willing to go the extra mile to ensure that you are helping employees as much as possible. In short, it shows that you care.

This happens externally as well. If you lay someone off and they have a bad experience, they are way more likely to go online and tell that experience to the world. It’s just a fact that people are more willing to write a negative review than they are to write a glowing one.

What this can do, if left unchecked, is tarnish your employer brand by turning the public, and future hires, against your organization. In today’s connected world, maintaining an employer brand is more important that ever. You need to make sure you are not turning future talent away by giving your exiting employees the red carpet treatment, especially if they are involuntarily let go.

When it comes to severance agreements, we all know that they protect corporations and businesses from legal action. However, we rarely look into how severance agreements can impact employer branding in the long run.

Outplacement is the perfect, most affordable service to include inside a severance package because it fully supports employees as they make their transition to a new role.

By showing your staff members, and the world, that you care deeply about the success of your employees – even when they are leaving your organization – you set yourself up for future success and soften the blow – both internally and externally – that RIFs and layoffs may have.

Wondering how much outplacement costs and what ROI you’ll see when using it? Check out our guide here:

Josh Hrala

Josh is an HR journalist and ghostwriter who's been covering outplacement and offboarding for over six years. Before pivoting to the HR world, he was a science journalist whose work can be found in Popular Science, ScienceAlert, The Huffington Post, Cracked, Modern Notion, and more.