Just What IS Outplacement?
Ask a candidate what outplacement is and you’ll hear a range of answers that includes the following:
- Job Search Help
- Career Coaching
- Help finding a job
- Resume writing service
Ask candidates who have met with an outplacement service, and see how well the service actually achieved any of these goals. I doubt you’ll find many, because that’s not what an outplacement service does – these aren’t the goals of an outplacement service.
Wikipedia describes outplacement as “With the increased rates of downsizing, rightsizing, redundancies and lay offs, particularly during the 1980s and 1990s, businesses increasingly found a need for some form of assistance in reducing the trauma of redundancy for both departing employees and those who remain.” Based on Wikipedia’s description, the goal of outplacement is to reduce the trauma of laid off employees.
Why would a company want to reduce their ex-employee’s trauma?
- Reduce negative goodwill associated with layoffs
- Reduce negative press related to layoffs
- Reduce the risk of lawsuits from ex-employees
Reducing ex-employee trauma also reduces post-layoff risk for the company – that’s the goal of outplacement.
Remember, an ex-employer pays the fare – so the ex-employer determines the goals. Job search help is one tactic that outplacement firms use to reduce former employee trauma and therefore reduce ex-employer risk.
While this may work well to meet the employer’s goals, outsourcing may not meets the candidate’s goals – the goals are different, remember? The Wall Street Journal agrees – A front page article in the Wall Street Journal, “Outplacement Firms Struggle to Do Job,” (published 8/20/09) stated that companies have become dissatisfied with outplacement service quality.
“As demand rises in the $4 billion-a-year outplacement business, providers increasingly offer standardized services, which some workers say offer little value. Businesses anxious to shed former employees quickly and cheaply impose time limits that hamper effectiveness. Few employers track whether outplacement works.”
Why? Corporations found that offering the most minimal outplacement package reduced their risk significantly. However, companies also learned that offering longer, individualized and in-depth help increased their costs, but did little to further reduce risk to offset the additional cost. In other words, companies learned that going through the motions of outplacement benefited them – committing to enough help to make a significant effect on the ex-employee’s job search benefited the ex-employee, but not the company.
Since the whole point of layoffs are for corporate cost reduction, why would a company facing layoffs offer minimal outplacement benefits to ex-employees? Because they provide a return – the risks are greater than basic outplacement package costs. Why wouldn’t a company then provide the additional help needed to make an actual difference in the employee’s job search? Because it doesn’t pay … the company. It’s smart business and Finance 101.
Is it any wonder many candidates and companies rate outplacement service effectiveness so low? However, it’s not all bad – There are some advantages of outplacement for the candidate (see the end of this article for comparisons).
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