What is outplacement and how does it work?
What is outplacement and how does it work?
Outplacement is an employer-sponsored service that helps laid-off employees find new jobs faster through career coaching, resume help, and interview prep.
- It eases the move from one job to the next for exiting staff.
- It protects the employer’s reputation and can lower legal risk.
- It can be run in-house or through a third-party firm.
Laying off employees is stressful for both the employer and the worker. For the employee, finding a new job takes time and effort. For the employer, the exit process can also drag on. Outplacement makes this transition easier. As a result, the exiting employee can land a new role faster.
What is outplacement?
Outplacement is an employer-sponsored service. It is sometimes part of a severance package for employees. Its goal is simple. It helps terminated employees move to a new job or career, so they do not start from scratch. In addition, the service assists with job tasks. For example, it covers cover letters, interviews, and salary talks.
How does outplacement work?
An employer can offer outplacement in-house. Other companies outsource it to a third party that focuses on career-coaching services. The second option usually costs less. Sometimes, employers turn to a firm when there is friction between the two sides. Employees can use the service from an office or from home, wherever the coach can meet them.
Pricing varies by service and by the number of employees. For example, high-end firms that coach one-on-one often cost more. Meanwhile, lower-end options that use online or group settings tend to cost less.
2 things to remember about the outplacement process
If your company is thinking about outsourcing outplacement, keep a few points in mind.
Outplacement firms are NOT recruiters
Outplacement firms and coaches are not recruiters or hiring managers. So they cannot refer an employee to a company. They also cannot speak on behalf of any company. Instead, their role is to ease the move of terminated employees to a new job. They do this by helping polish job application materials. They also share insights on salary talks, based on the job and industry. In addition, they help with interview prep and market analysis. Think of them as guidance counselors for people who need help finding new work.
Outplacement is not just for employees
Outplacement helps employees directly. Still, it can also help the company. As noted, company-sponsored outplacement protects the firm’s brand. That is because workers do not leave on bad terms. Instead, you can view outplacement as a final act of service before they go. As a result, it keeps the relationship healthy. It also eases tension and any hard feelings the employee may carry out the door. Handled well, an exit can even ease a later redeployment of talent within your network.
Benefits of outplacement
Job hunting can be a hassle for anyone. This is true even for skilled workers who must keep refining a resume. Luckily, that is where outplacement helps. It offers a hand to those looking for a new job.
Alleviates job insecurity or tension
For some people, a job loss brings feelings of doubt. Outplacement helps laid-off employees rebuild their confidence. It does this by improving their resume and cover letters. So the materials look more appealing to future employers. If the person left on bad terms, outplacement can also ease leftover tension. Meanwhile, it keeps things fair and unbiased. This support matters when a company faces a staffing shortage and needs to rehire quickly.
Polished job requirements
Outplacement helps employees build the best possible resume and cover letter. In addition, it gives insight on the best career path, based on their past work. For example, a coach can add details about prior roles or revise a cover letter. They can also make the resume look neater and easier to read. On top of that, they help workers beat interview jitters. They do this with practice and a list of likely questions.
Helps company’s reputation
When workers are let go, some feel upset and vent to others. However, outplacement lowers the risk of former staff speaking ill of the company. It shows that the firm still wants to help, even after a layoff. So it protects the company’s reputation. At the same time, it reassures the staff who remain. Outplacement also lowers the risk of lawsuits for wrongful termination and other costly legal problems. Clear exits, from a proper termination letter onward, reduce that risk further.
Save on unemployment costs
Outplacement also helps employers save on unemployment costs. This is true when the former employee finds a job faster. Companies that reduce the number of claims made by employees can earn lower insurance rates. To see the wider picture, it helps to know how much unemployment pays.
How to choose an outplacement provider
To choose a provider, a company must vet its options with care. The goal is to find a firm that serves former employees well. Here is a short list of criteria to remember:
- Personalized experiences: it is best to find a firm that tailors its service to each employee.
- Background of the coach: the coach must be reputable. It is a bonus if the coach knows the employee’s target field.
- Check the firm’s track record: make sure the firm has a strong record and good reviews from past clients.
Investing in outplacement
Outplacement is a worthy investment. It offers real benefits to both the employee and the employer. For the employee, the job search after a layoff gets easier. They gain career advisors who refine their resumes and sharpen their interview skills. For the employer, it keeps a good relationship with the exiting worker. It also keeps their brand reputation clean, with no bad blood.
Frequently asked questions about outplacement
Is outplacement the same as severance?
No. Severance is a payout, while outplacement is a support service. Still, employers often bundle the two together in an exit package.
How long does outplacement support last?
It varies by plan. For example, some programs run for a few weeks, while others last several months. In general, longer plans suit senior roles.
Do small companies use outplacement?
Yes. Small firms use it to protect their reputation and ease layoffs. Group or online plans keep the cost low.
What is the difference between outplacement and a layoff?
A layoff ends a job, sometimes after a constructive discharge. Outplacement is the help that follows. It supports the worker as they search for the next role.
Key takeaways
- Outplacement helps laid-off employees find new jobs through coaching and resume help.
- It protects the employer’s brand and lowers the risk of legal claims.
- Firms can run it in-house or outsource it, often at lower cost.
- It can also cut unemployment costs when workers rehire faster.
- Vet providers for personal service, coach background, and a strong track record.
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