In the challenging world of business, downsizing and workforce reductions can be inevitable decisions. These choices, however tough, can be eased with the aid of outplacement services for both displaced employees and the organization. Outplacement is an employer-sponsored benefit designed to help workers develop the skills and tools needed to find new employment after termination or layoff. Interestingly, a 2021 Mercer study revealed that fewer than 45% of companies used outplacement services for most terminations. Given the current economic climate, it is perhaps a good time to evaluate whether utilizing an outplacement service is beneficial for your organization.
Outplacement services are generally offered through severance packages to employees who have been laid off. While not legally obligatory, these packages can minimize the chance of lawsuits from former employees. Typically, severance packages may include partial salary continuation, health coverage, and outplacement services. So, what exactly are outplacement services? These are programs that provide networking, counseling, and career advice at the expense of the employer, usually provided by third-party agencies.
Here are some key reasons why employers are increasingly considering outplacement:
1. Supports Exiting Employees: Losing a job can be a daunting experience, affecting various aspects of one’s life. Enrolling in outplacement services equips displaced employees with resources to initiate a new job search and boosts their confidence. These services may encompass resume writing, interview workshops, and dedicated career coaching.
2. Safeguards Employee Morale: The departure of colleagues often leaves a significant impact on the remaining employees, who may worry about their job security and the welfare of the departing staff. Companies offering outplacement services can alleviate this transition, supporting the morale of the employees who remain.
3. Upholds Company Reputation: The treatment of employees throughout their journey with a company speaks volumes about the organization. Failing to support employees during their exit can tarnish a company’s reputation. Offering outplacement benefits helps maintain the company’s image in the talent market.
4. Unemployment Rates: One challenge for employers facing high unemployment rates is the burden of unemployment tax. Assisting former employees to secure new jobs faster can reduce this cost.
Before deciding to offer an outplacement program, it is essential to identify your company’s goals. The chosen vendor’s service quality and client relationships reflect your organization, so ensure their approach aligns with your values and objectives. Each company’s situation is unique, so the benefits and costs of providing outplacement services must be carefully weighed. Ultimately, it’s the employer’s decision.
