What Is Outplacement and How Can It Help During a Reduction Event

Offboarding employees during a layoff or reduction in force (RIF) can be a challenge for even the most seasoned HR professional. It’s a stressful event for everyone involved. Cutting down a workforce has never been easy. Both the exiting employees and managers are bound to experience emotional turmoil as they prepare to face this new transition. 

In recent years, outplacement services have evolved significantly to better support both employers and employees through these difficult transitions. The shift to remote work during the pandemic has accelerated the adoption of virtual outplacement as the modern standard, making support more accessible and flexible than ever before.

But what is outplacement and why is it important? How can you make sure that you’re performing a reduction event with the proper outplacement provider?

In this guide, we will explain what outplacement services are and when you might need them, as well as explore the features to look out for when shopping for the right outplacement services partner for your organization.

Outplacement is a service provided by an expert firm to an organization’s displaced employees to help them reorient in the job market and make a successful transition to a new role outside of the original company.

In other words, outplacement helps take the stress out of layoff events for employees who are impacted, giving them the tools they need to find new work in a fulfilling role that they will love. Not only does this help them get back to work quicker than if they were to do the job search alone, it also helps employers ensure that their staff members are set up to succeed whenever they are let go.

Outplacement providers come in all shapes and sizes from boutique shops to huge firms. Many companies often go with providers who are boutique enough to be flexible, but powerful enough to handle a large number of employees if needed. If you are shopping for outplacement services, you should aim to get the best of both worlds.

Outplacement is typically offered with severance during the layoff process. By making outplacement a part of the severance package, organizations can better protect their corporate and employer brand from being tarnished if they should need to reduce the size of their workforce via layoffs or permanent RIFs.

Let’s dive a bit further into this and other situations when you might want to offer outplacement services.

Organizations typically implement outplacement services during workforce reductions, but the specific situations can vary widely. Understanding when to offer outplacement helps HR professionals prepare strategic transition plans that protect both departing employees and the company itself.

When companies realign their organizational structure to meet changing market demands, roles often become redundant. Restructuring can involve merging departments, flattening hierarchies, or completely reimagining how work gets done. During these transitions, even high-performing employees may find their positions eliminated.

Outplacement is crucial in restructuring scenarios because it helps companies demonstrate that layoffs reflect structural changes rather than performance issues. This distinction helps maintain the dignity of departing employees and preserves relationships with potential future talent or clients.

Economic pressures frequently force organizations to reduce headcount to remain financially viable. Whether responding to market downturns, falling profits, or shifting investor expectations, companies often turn to workforce reductions as a significant cost-cutting measure.

In downsizing situations, outplacement services help mitigate the negative impact on corporate reputation. Companies that provide comprehensive outplacement support during downsizing often experience less negative social media attention and are better able to protect their employer brand and market reputation than those that offer no transition assistance.

When companies combine forces, duplicate positions are inevitable. The integration process typically identifies redundancies across departments, leading to workforce reductions that can affect employees at all levels.

Outplacement is particularly valuable during M&A activity because it helps the new organization demonstrate commitment to ethical treatment of all employees, including those who won’t continue with the company. This commitment significantly influences how the remaining workforce perceives the new corporate culture.

Geographic changes, whether closing facilities, relocating operations, or consolidating locations, often result in job losses for employees unable or unwilling to relocate. These situations can be especially challenging as they impact entire communities.

Outplacement services for plant closures often include specialized support for job markets with limited opportunities, potential retraining for different industries, and assistance with relocation if desired.

As companies embrace automation, artificial intelligence, and other digital technologies, traditional roles often evolve or disappear entirely. Digital transformation can create significant skill gaps between current employees and future needs.

Outplacement during digital transformation helps companies manage this evolution ethically while supporting employees whose roles have become obsolete. This approach allows organizations to modernize operations while maintaining their reputation as responsible employers who don’t simply discard talent.

When organizations change leadership or implement succession plans, existing executives and senior leaders may be transitioned out of the company. These high-profile departures require especially sensitive handling.

Executive outplacement provides specialized support for senior leaders, including guidance on board positions, consulting opportunities, and the unique challenges of job searching at the executive level. This specialized approach helps protect the company’s reputation among key stakeholders while supporting former executives.

Different sectors face unique challenges that may trigger the need for outplacement:

• Healthcare: Consolidation of hospital systems and shifts toward telehealth have created significant workforce changes requiring specialized outplacement support.
• Manufacturing: Automation and overseas competition continue to transform manufacturing employment, with outplacement often focusing on transferable skills and retraining opportunities.
• Technology: Rapidly changing skills requirements and frequent pivots make tech industry outplacement particularly focused on skills assessment and market positioning.
• Retail: The continued growth of e-commerce has forced many retailers to close physical locations, creating large-scale outplacement needs with emphasis on transferable customer service skills.

Tip: When considering outplacement during layoffs, think beyond just executives or long-tenured employees. Providing support across all levels demonstrates true commitment to ethical business practices and delivers the strongest protection for your employer brand.

Here are some other common situations for conducting a layoff or RIF event in which you may need to consider offering outplacement support for your impacted employees:

• Poor business performance
• Poorly performing employees
• Facing uncertainty of the economic climate
• Changing the strategic direction
• Supporting staff with career changes

There are many different flavors of outplacement providers to choose from. They all share the same end goal of helping laid off workers get back to work in a new, meaningful role. However, the approach taken and services offered to achieve this end result can differ quite a bit. 

The best outplacement providers utilize the powers of technology to deliver service to these workers anywhere and at any time. They pair this modern approach with online resources, personalized job search counseling, and expert career coaching to ensure that they can fully explore their options and find placement in their ideal next job in the shortest time possible.

Let’s look at the typical services offered with outplacement support, across different types of provider approaches.

Outplacement services always involve some form of career coaching. Participating employees are usually paired up with career transition experts in their field early in the process. These outplacement coaches will help the employees assess their strengths and weaknesses, draft and optimize their resumes, create and update social accounts like LinkedIn, prepare for interviews, and navigate job postings to identify the next ideal step in their career.

Traditional outplacement providers typically onboard participants by having them visit their offices or attend a webinar (usually as a large group). While there, a coaching staff helps them start their job search by looking over resumes and LinkedIn accounts. However, modern outplacement providers have discovered that this doesn’t make a lot of sense. 

Nowadays, outplacement providers worth their salt utilize the powers of modern technology to provide support to workers across the country and even the world. They provide one-on-one career coaching with a dedicated coach and the option to choose if participants will do their meetings in-person or virtually. The vast majority of participants prefer virtual, because it gives them the freedom to use outplacement services from the comfort of their home and at times that work best with their schedule. 

Coaches should be the most flexible part of the process, adapting to the needs, goals, and experience level of each participant–from senior executives to individual contributors–while also keeping them focused on making the right career decisions. Think of these coaches as more of expert guides who know the ins and outs of the job market, how to use technology to get noticed, and how to handle the whole process from applying to accepting a new role.

While career coaching is the human element of outplacement services, some firms also offer a wealth of career knowledge in the form of online databases, tools, training, and other resources. This allows the employee to research their next job and come up with new strategies to get that job on their own time. This is another way that a technologically-driven outplacement can be flexible based on the client’s needs.

Modern outplacement providers understand how the current job market works. Gone are the days of ‘hitting the pavement’ to find a role. Everything is online now. This includes knowing how to optimize online profiles and navigate the online job search process to help participants stand out among the crowd. 

By providing this level of support, employees will be able to get back into a new job without completely exhausting their severance check, reducing their stress levels and protecting your company in the process.

Today’s job applications typically pass through Applicant Tracking Systems (ATS) before reaching human reviewers. Quality outplacement services help participants navigate these digital gatekeepers by:

• Creating ATS-friendly resumes that incorporate appropriate keywords
• Tailoring documents for specific job opportunities
• Optimizing formatting for maximum readability by both algorithms and humans
• Teaching participants how to customize their materials for different opportunities

Modern outplacement platforms often include AI-powered resume tools that analyze job descriptions and suggest specific improvements to increase the chances of getting past initial screening.

In today’s job market, online presence matters tremendously. Comprehensive outplacement services help participants:

• Create or optimize LinkedIn profiles for maximum visibility
• Develop a consistent personal brand across platforms
• Build strategic online networks
• Leverage social media for job search and professional development
• Manage digital reputation and address any negative content

Despite technological advances, networking remains the most effective job search method, with studies showing that 70-85% of roles are filled through professional connections. Effective outplacement services teach participants how to:

• Identify and map their existing professional network
• Develop outreach strategies for warm and cold connections
• Create compelling networking messages
• Prepare for informational interviews
• Follow up appropriately to nurture relationships
• Leverage both in-person and virtual networking opportunities

Quality outplacement helps participants look beyond simply replacing their last job to finding truly fulfilling work aligned with their skills and interests. This process includes:

• Comprehensive skills inventories
• Interest and work style assessments
• Exploration of alternative career paths
• Gap analysis for potential new directions
• Development of learning plans to address skill deficits
• Guidance on industry transitions when appropriate

Tip: When evaluating outplacement providers, look beyond the list of services to understand how they’re delivered. The best programs offer a blend of self-directed tools and personalized coaching, allowing participants to learn independently while also receiving expert guidance when needed.

To fully answer the question, “What is outplacement?” it’s also important to understand what are the most important features to look for in outplacement services. As we mentioned, all providers want the same thing for their clients and participants–to get them back to work as fast as possible in a job that they actually will flourish in. However, the specifics of how they provide this support vary widely from firm to firm. 

Let’s break down each element that you should be looking for in your search for the best outplacement services provider for your organization.

The first critical element to look for is term limits, or ideally the lack thereof. Most outplacement providers work with participants for a set period, usually a few weeks to a few months. Once that time frame has elapsed, the services end and participants must continue the job search alone if they haven’t yet found a new placement. This is a huge red flag that these firms lack faith in their abilities, and care more about their bottom line than providing the best service possible.

At Careerminds, we offer our outplacement services “until placement,” or until all participating employees are placed in a new, meaningful role that they will love. This means being flexible and providing unlimited support regardless of a participant’s job title, experience level, or career path. We believe that outplacement firms should work with participants until they are placed, however long that takes. We know that our service works and are willing to put our money where our mouth is.

Retainer fees are also good to be wary of. They allow outplacement firms to make money without doing much work, which is great for them and bad for you. It’s understandable to want a provider on hand for any impending needs, but it may not make sense to keep them waiting around for such a hefty fee. Your outplacement provider should be a strategic partner that works with you for no retainer fee because it’s more about giving your organization and employees the support you need. At Careerminds, we do not use retainer fees at all. We believe that outplacement is an important service all companies should utilize and retainer fees shouldn’t get in the way of that.

As technology continues to advance, outplacement providers should be evolving with it to make their services as relevant, accessible, and easy to use as possible. This means offering virtual outplacement solutions that provide participants with flexible coaching support, eLearning courses, social networking, and online job search tools, while simultaneously preparing them with the same valuable technological skills. You need an outplacement provider that doesn’t just understand the current market, but also the market of the future and how to prepare for it.

The benefit of a strong technological backbone is the flexibility it provides. There are a lot of variables at play in finding work that changes from person to person. Your provider should be prepared to customize their outplacement process to each participant’s needs, circumstances, goals, and level of experience. Outplacement isn’t about getting employees back to work in any job, but rather into jobs that they want, are good at, and find meaningful. 

When choosing your ideal outplacement services provider, be sure to thoroughly evaluate the career coaching services they offer. Are their coaches professional and experienced? Is their coaching provided on a one-to-one ratio or in groups? Are they flexible enough to handle the needs of different types of people, from entry-level employees to senior executives? Are they assigned to employees at random or do they try to make relevant matches? Having the right dedicated coach is an important factor that contributes greatly to success.

Outplacement firms should be more than merely a tool that gets your staff back to work and protects your business. These firms should be thought leaders in the HR space, keeping up to date on all of the latest trends, providing you with access to industry experts, and devising ways to help your company navigate any potential issues that you may face on various career transition topics. If your provider is tech-driven and connected to the HR landscape, they can and should be a bastion of industry knowledge that you can lean on to make sure any of your transition needs are covered in the best way possible.

Here’s Careerminds CEO Raymond Lee discussing the topic to give you a better example of what thought leadership looks like:

The end goal is to find an outplacement provider that can be a strategic partner for your business. So it’s important to consider all of these criteria from the beginning of your search–or evaluate your current provider if you already have one–and then continue to reevaluate them as your partnership progresses. You need to ensure that as the job market changes, your outplacement provider changes along with it to stay on the cutting-edge of technology and trends, maintain flexibility and transparency with you as a true partner for your business, and assure you that your employees are in good hands.

The final element you need to find the best outplacement firm for your organization is the demonstration of their results. This includes assessing their past case studies, reviews, and engagement rates. It also means ensuring their outplacement services include transparent participant data, surveys, and results that you can review throughout the program to monitor their progress. This will help you see just how effective the outplacement is–or could be–for your staff and business, so you can make the right decision and measure the return on your investment.

When evaluating outplacement services, these warning signs suggest a provider may not deliver the quality support your departing employees deserve:

• Retainer Fees: Quality providers charge based on actual services delivered, not ongoing retainers for potential future needs.
• Rigid Group Workshops: While some group sessions can be valuable, providers that rely primarily on standardized workshops rather than individualized support typically deliver inferior results.
• Outdated Technology: Providers using obsolete platforms or minimal technology integration will struggle to prepare participants for modern job searching.
• Limited Coach Accessibility: If coaches are difficult to reach or have excessive caseloads, participants won’t receive the attention needed for successful transitions.
• Narrow Service Tiers: Providers offering dramatically different services based solely on employee level often deliver inadequate support to non-executive staff.
• Lack of Specialization: General career services firms without specific outplacement expertise typically lack the specialized knowledge needed for laid-off employees.

The outplacement industry continues to evolve in response to changing workforce needs:

• AI-Enhanced Coaching: Artificial intelligence is increasingly supplementing human coaches by identifying patterns and opportunities humans might miss.
• Gig Economy Transitions: More outplacement programs now include guidance on building freelance careers or portfolio work approaches.
• Skills-Based Placement: Rather than focusing solely on replacing similar roles, modern outplacement increasingly emphasizes transferable skills for industry transitions.
• Extended Career Support: Some providers now offer continued career development resources even after participants secure new roles, helping with onboarding and early success.
• Internal Redeployment Integration: Organizations are increasingly combining outplacement with internal mobility programs to retain talent whenever possible.

In summary, outplacement is a great way to get your employees back to work after a RIF or layoff. The best outplacement firms should have a proven path to help make this happen, by utilizing flexible career coaching alongside digital platforms to ensure your outgoing employees have all of the tools they need–wherever they are and at any time they want–to find a new, fulfilling job at another company.

At the end of the day, outplacement shouldn’t be stressful for you or your employees. Your outplacement provider should be a thought leader on the cutting edge of technology that researches and finds solutions to upcoming HR problems. They should be a strong strategic partner that empowers you to perform the needed reduction without all of the stress. 

The most important thing about outplacement is that you’re doing it for your employees. Sure, there are advantages with outplacement for you and your company, but HR is about putting people first. That’s also our core philosophy here at Careerminds.

If you want to learn more about what is outplacement at Careerminds, or have questions about the overall process, we’d love to chat with you. Careerminds is dedicated to getting people back to work in their dream job.

Click below to schedule time to chat with one of our experts and see if Careerminds is the right partner for your organization’s outplacement needs.