The Ultimate Guide to Outplacement Fee Structures

November 17, 2017 by Martina Markovska

Are you having trouble deciphering the total cost of outplacement programs and whether or not they’re worth your time and money? You’re not the only one. Outplacement fee structures can be pretty confusing for businesses.

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This is mainly because employers don’t fully understand what outplacement assistance is and what it means for them and their employees. As a result, employers may end up paying more and receiving lower quality outplacement services.

An efficient solution to avoid overpriced outplacement packages is educating yourself about outplacement fee structures. The ultimate goal of this is to ensure your employees are well taken care of and your money is well-invested.

Luckily, we’ve prepared an ultimate guide to outplacement fee structures to help you get a better understanding of how outplacement services work.

What should you expect in an outplacement fee structure?

In the outplacement fee structure, you should expect to find the different types of outplacement services that the outplacement company offers along with the price of each of these services.

The most common outplacement services offered by an outplacement company include:

  • One-on-one consultations with a career coach.
  • Individual or group workshops for displaced employees to learn new skills.
  • Training materials to help outgoing employees transition into new roles.
  • Tailored outplacement programs for employees and executives.
  • Retirement plans for easier transition out of the workforce.
  • Resume writing to emphasize employee experience and skill set.
  • Access to outplacement tools that facilitate the job search process.

To understand the fee structures of outplacement firms, it’s important to compare their methods for providing the aforementioned outplacement services. Initially, it appears that every outplacement company provides the same outplacement support. However, if you dig a bit below the surface, you’ll find the differences are quite visible. This is because each outplacement company defines their responsibilities differently.

Outplacement Fee Structures

For example, let’s say we have two outplacement firms who manage outplacement packages. Both offer tailored outplacement programs for outgoing employees so it’s safe to go with either one, right?

Well, not exactly. One might offer outplacement support for three months only, while the other outplacement firm offers support until job placement. As a result, the former outplacement firm doesn’t guarantee job placement, whilst the latter ensures job placement.

Consequently, the former, term-limited outplacement package may result in a lower outplacement fee structure and the latter one may charge higher prices for their services. Therefore, the end results would be completely different. This brings us to the next point in outplacement fee structures:

How do you differentiate between outplacement firms?

You can differentiate between outplacement firms by the services they provide. Based on these services, there are generally two types of outplacement firms:

The ‘good on the outside, bad on the inside’ type of outplacement firm.

This type of outplacement firm is the one you want to avoid. It usually allures clients with the promise of low costs and outplacement fees. Here are some telltale signs that you’re dealing with a bad outplacement firm:

  • No one-on-one consultations. Most of the time laid-off employees need help with creating a financial plan after they’ve ceased working for an employer. And outplacement companies that don’t offer one-on-one consultations aren’t worth the cost, no matter how low the outplacement fee structure may be.
  • Inexperienced consultants. Inexperienced career coaches and consultants can have a negative impact on employees. This is usually because they lack the expertise in giving suitable career advice, assessing the employee’s situation and providing flexible and personal consultation sessions.
  • Limited outplacement tools. These types of outplacement firms offer limited access to key outplacement tools, including resume and cover letter writing, online career assessment tools, interview prep tools, and access to job search platforms.
  • Basic level of support. Unfortunately, these outplacement companies offer only basic levels of outplacement support. They usually lack individual attention, offer low quality advice, and infrequent assistance.
  • One-size-fits-all approach. A one-size-fits-all approach to outplacement isn’t very effective in helping outgoing employees transition into new employment. This is because most individuals need a personalized outplacement program tailored to their own circumstances. If you want to achieve genuine results, avoid the one-size-fits-all approach and ask for tailored outplacement assistance instead.
  • Term limits. Term limits are used by outplacement companies who don’t want to spend their resources on job placements that may take longer. Outplacement providers who employ term limits don’t guarantee placement, which may impact negatively on both displaced employees and employers.
  • High retainer fees. Retainer fees are another source of income for outplacement companies. This is mainly because businesses don’t need outplacement services on a day-to-day basis. High retainer fees can cost you a fortune so you should look for an outplacement company that either has low retainer fees or none at all. Retainer fees are listed in the outplacement fee structure so be wary of the cost.

Outplacement Fee Structures

The ‘result-driven’ type of outplacement firm.

This type of outplacement firm is driven by tangible results, namely job placement in a similar or sought after position. Its outplacement services encompass tailored outplacement support methods. This is the type of outplacement firm you want to be working with.

Here are the common signs of a good outplacement firm:

  • Tailored outplacement support. Good outplacement companies connect outgoing employees with a career coach that is best-fitted for their needs. They provide a personalized outplacement program that consists of strategic transition coaching, tailored job leads and an effective approach to personal branding. All with the purpose of securing the best role for displaced employees.
  • Experienced career coaches. You can easily spot an experienced career coach by the way they conduct themselves with both employees and employers. Experienced career coaches are able to easily adapt to different situations and make a comprehensive assessment in order to generate a strategic plan for outplacement. They avoid the one-size-fits-all approach and instead opt for tailored outplacement support.
  • Unlimited access to outplacement tools. Displaced employees have unlimited access to various online and offline outplacement tools. These include one-on-one consultations in person and online, career assessment tools, interview prep tools, and unlimited access to job search platforms.
  • Low retainer fees. A results-driven outplacement firm concentrates on just that – results. Therefore, they don’t rely on high retainer fees as their main source of income. Instead, they focus on providing quality outplacement services that generate a steady flow of clientele. Therefore, they have no need to bill high retainer fees in their outplacement fee structures.
  • No term limits. You know an outplacement firm is good at their job when they have no term limits. Rather than looking at their clients as a project with an expiry date, they focus on successfully transitioning outgoing employees into new professional roles.

Schedule a free demo

Make sure you choose the right outplacement provider for you by scheduling a free outplacement demo. This way you can speak to a representative who is able to explain their outplacement services and outplacement fee structures in detail.

When speaking with a representative of the outplacement firm, make sure you have a list of questions ready, ask for references, and assess their use of technology. This will determine whether or not they can deliver the right level of outplacement support for you or if you should seek help elsewhere.

Still looking for an outplacement firm that can deliver results? Schedule a demo here:

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