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Outplacement Benefits: Why is It Important?

March 30, 2023 by Miles Charles

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It’s a story that many CEOs know too well. Some staff members are underperforming, and the firm is facing some budget cuts—you decide to cut your losses and lay off certain workers. But cutting down a workforce has never been easy. Both the exiting employees and managers are bound to undergo emotional turmoil as they prepare to face this new transition. To make this process easier, the company may decide to seek an outplacement service provider. But why is an outplacement program important anyway? And what are the main benefits it provides?

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So, why is outplacement counseling important? Well, it is reported that four out of five employers provide outplacement services for displaced workers, ranging from resume assistance and career management coaching to the identification of job leads, which proves that many believe it to impactful for their bottom line and corporate brand, but there are also many other reasons.  

We know that outplacement is the most important severance benefit for both the transition employees and the company. To the employers, outplacement solutions provide benefits that can save resources that may be expended on organizational and legal costs that may arise during termination of work. To the departing employees, this service enables them to survive financially during the transition, and do it swiftly and successfully.

Let’s take a look at all of the benefits and reasons in detail:

First, What Is an Outplacement Service?

Outplacement is the support service provided by responsible organizations to aid displaced employees as they transition to new jobs and help them re-orient in the job market.

Typically, the best outplacement providers offer the terminated employees an up-to-date outplacement training process as well as top-end job search counseling and career coaching, to ensure that they are placed in their perfect jobs in the shortest time possible. Job search counseling normally involves drafting a resume, preparing for interviews, and the assessment of job postings.

Some reports claim that reconstruction is the major reason why companies seek outplacement services, but what are other explanations? Employers may need an outplacement service if their companies are:

  • Downsizing
  • Reconstructing
  • Poorly performing
  • Have poorly performing individuals
  • Having mergers and acquisitions
  • Reducing operational costs
  • Facing uncertainty of the economic climate
  • Changing the strategic direction
  • Supporting their staff with career change

The Importance of Outplacement Services for Employees

Now that you understand the reasons why a company might require outside outplacement support, let’s examine why the service has grown in popularity and why it is important:

1. Outplacement Improves Retention and Productivity

Workforce reductions, layoffs, and other types of employee terminations typically have a negative effect on the morale and productivity of the current employees. But if handled properly, the whole process can enhance the dedication and motivation of the remaining employees.

Offering outplacement services to the laid-off employees is one way to show the remaining employees that they are valued and that the employers have “conscience,” which can have a positive impact on their morale, commitment, retention, and productivity.

2. Outplacement Reduces the Risk of Legal Action

Defending an unlawful termination is expensive, time-consuming, shrinks the morale of the remaining staff, and can injure the reputation and perception of the company. Seeking outplacement services can help the business take appropriate action when letting some employees go. Offering an outplacement benefits package as part of a severance agreement can reduce the anxiety of the laid-off employees, maintain healthy relationships in the office and, therefore, the risk of wrongful termination lawsuits.

3. Outplacement Protects Your Business Brand

A company’s brand and image are everything these days. Outplacement reinforces a positive view of the firm by the staff and community. Executive outplacement firms promote a great company reputation, demonstrate your company’s corporate responsibility towards current and former staff, and showcase the firm’s ability to promote the solutions modern professionals need, such as access to transfer options, networking connections, and job boards.

Besides, maintaining an excellent relationship with the impacted employees not only preserves the image of the business but also ensures any future dealings with them are positive.

4. Outplacement Could Be a Negotiable Severance Benefit

Today, most firms use outplacement as a ‘bargaining chip’ during an individual compensation negotiation. Outplacement packages offer the terminated employees some tangible unemployment benefits compared to other severance options, most of which are costly.

5. Outplacement Supports Corporate Values

Most companies have core values that highlight how invaluable their staff is. There is substantial data that support the connection between value-driven organizations and long-term productivity. Providing outplacement packages to the employees demonstrates that the company’s core values aren’t just platitudes.

Why is Outplacement Important for Employees?

Let’s face it, even workers at the best companies get laid off. But when a company puts outplacement packages at the core of its benefits, it creates an attractive, employee-centric culture that makes employees feel secure, motivated, and dedicated.

But 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.

What are Services Typically Offered by Outplacement Firms?

Top outplacement firms offer services and programs to meet both employee and company needs. Most of these programs are being broken into two types: group programs and individual programs.

Group programs are typically non-exempt and meant for larger-scale staff reduction. On the other hand, individual programs are for professional exempt-level staff and executive management. Regardless, the right management outplacement services will offer the following key benefits:

  • Help job seekers plan for their job search
  • Provide entrepreneurial consulting and networking advice
  • Offer help with research materials
  • Provide information on online services, job fairs, and recruiting firms
  • Provide financial consulting
  • Help with video interviews
  • Provide customized career assessments
  • Provide administrative support
  • Coach employees on particular professional topics of interest
  • Provide professional help with resumes and cover letters

The Benefits of Outplacement: The Final Say

The benefits of outplacement far outweigh the cost of implementing a quality program. Sometimes it’s inevitable; firms are left with a tough decision to terminate some of their workers. It’s a harsh reality that no management team or staff member wants to come across.

However, employers have the benefits of outplacement services to ensure the layoff doesn’t get ugly. Employers can now choose to offer extended support to former employees, as part of their core value and social responsibility by seeking help from some of the well-known outplacement gurus on the planet. The same firms can also extend their support further and work in tandem with the outplacement service and aid many employees in the transition process.

Want to learn how Careerminds can help your workforce transitions? Schedule a free demo today:

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