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Home » Articles » What is outplacement and how does it work?

What is outplacement and how does it work?

Having to lay off some employees is a stressful thing that the employer and employee must deal with.

On the employee’s end, finding a new job takes a lot of time and effort, while the employer must handle the termination process, which could also take some time.

Outplacement services can make the transition process easier and can lead the exiting employee to find a new job faster. 

What is outplacement?

Outplacement is an employer-sponsored service that is sometimes part of a severance package for employees. It aims to help terminated employees transition to a new job or career so they don’t have to start from scratch.

This service also includes assisting employees with job requirements, such as writing cover letters, interviews, and salary negotiations.

What is outplacement
What is outplacement?

How does outplacement work?

Outplacement services can be provided in-house by the employer. Other companies outsource outplacement services from a third party specializing in career-coaching services.

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The latter option is usually done at lower costs. Sometimes, employers turn to an outplacement firm if there is animosity or friction between the employer and the employee.

Employees can use outplacement services from an office or home where the coach can accommodate them.

Pricing varies depending on the availed services and the number of employees. Personal high-end outplacement firms that do their services one-on-one may be more expensive than lower-end ones that accommodate online or group settings.

2 things to remember about the outplacement process

If your company is considering outsourcing outplacement services, there are a few things to keep in mind:

Outplacement firms are NOT recruiters

Outplacement firms and coaches do not serve as recruiters or hiring managers. They cannot directly refer an employee to a company, nor can they speak on behalf of any company.

The role of outplacement is to ease the transition of terminated employees to a new job by helping clean up or polish their job application requirements.

They also provide insights on salary negotiations, depending on the job and industry, as well as interview preparation and market analysis.

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Think of them as guidance counselors or advisors for terminated employees who need help seeking new jobs.

Outplacement firms are NOT recruiters
How does outplacement work?

Outplacement is not just for employees

Even though outplacement assists the employees directly, it could also positively affect the company.

As mentioned, company-sponsored outplacement can help maintain the firm’s brand reputation as employees are not exiting the company on bad terms.

Instead, you can consider outplacement as the company’s final act of service to the employee before they leave the company.

Doing so maintains the relationship between employer and employee and relieves tension or any emotional baggage the employee may carry as they exit.

Benefits of outplacement

Regardless of whether you are a new employee, the job-hunting process can be a hassle, especially if you have to keep refining things like your resume.

Fortunately, that’s where outplacement services come in, as these can offer a helping hand to those looking for a new job.

Alleviates job insecurity or tension

For some people, finding a new job after being terminated from an old one may lead to feelings of insecurity or inadequacy.

Outplacement helps laid off employees gain their confidence back by making fixes or tweaks to their resume or cover letters to make them more appealing to future employers.

If the employee left their company on bad terms, outplacement can also help remove any tension leftover and provide support while keeping things objective and unbiased.

Polished job requirements

Outplacement services help employees create the best possible resume and cover letter needed for their next job application.

They can also provide insights on what would be the best career choice possible given the employee’s previous experience.

The outplacement coach can improve their resume by adding details about their previous work, revising their cover letter, or by simply making their resume look neater and more presentable.

Not only that, but they can also help workers get rid of interview jitters by preparing them beforehand and giving a list of questions to practice with.

Helps company’s reputation

When employees are let go, they immediately feel frustrated and start ranting to others about how bad their company is.

However, providing outplacement services lowers the risk of former employees speaking ill about the company.

Outplacement services help maintain the company’s reputation by showing that the firm is willing to help former employees despite terminating them. At the same time, it serves as a relief for the remaining employees.

Outplacement also lowers the chances of lawsuits for wrongful termination and other legal problems that are quite costly already.

Helps company’s reputation
Benefits of outplacement

Save on unemployment costs

Outplacement also allows employers to save on unemployment costs and benefits, especially if the former employee finds a job faster.

Companies that reduce the number of claims made by employees can be eligible for lower unemployment insurance rates.

How to choose an outplacement provider

To choose an outplacement provider, a company must vet critically to choose the right one that can provide exemplary service to their former employee.

Here is a list of criteria to remember:

  1. Personalized experiences – It is best to find an outplacement firm that caters their services specifically to the employee.
  2. Background of the coach – Of course, the coach or advisor must be reputable. It is a bonus if the coach has expertise in the field that the employee is interested in.
  3. Check the firm’s track record – Ensure that the outplacement firm has a good track record and reputation among previous customers.

Investing in outplacement

Outplacement is a worthy investment that offers mutual benefits to both the employee and employer. 

Searching for a new job after being terminated is easier for the employee. They have the assistance of career advisors who can help them refine their resumes and sharpen their interview skills.

Meanwhile, the employer can maintain a good relationship with the terminated employee and keep their brand reputation clean without any bad blood.

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