Outplacement vs Career Coaching: Which is right for you?

Aug 3 2010 in Featured, Job Search Strategy, reCareered Blog by Phil Rosenberg

A recent question at the end of one of my Resume Revolution webinars revealed confusion in the difference between outplacement and career coaching. They aren’t the same thing, they serve different goals, and completely different sets of clients.

Which one is right for you?

It’s interesting how many candidates I speak with don’t think they need coaching help because they are covered by a prior employers outplacement service plan. When asked, these candidates don’t understand the difference between these two types of services, and the differences are huge.

This article explains the differences, so candidates can better understand which type of service is right for their needs.

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).

What is Career Coaching?

Also according to Wikipedia, “Career coaching focuses on work and career or issues around careers … Career coaching is not to be confused with life coaching, which concentrates on personal development (see ‘personal coaching’ and ‘life coaching’, above). Another common term for Career Coach is ‘Career Guide’, although career guides typically use techniques drawn not only from coaching, but also mentoring, advising and consulting.”

You see from the definition above that carer coaching is a broad term. Career coaching encompasses:

  • Career Change/Job Search
  • Managing career path and politics at current job
  • Leadership coaching

A career coach that focuses on job search and career change works for the candidate and is paid by the candidate. The Career coach’s goal is to help the candidate find a job through one or more of the following methods:

  • Assessment
  • Goal Setting
  • Personal branding
  • Online reputation management
  • Job search planning
  • Resume writing or review
  • Accountability
  • Networking help
  • Social Networking help
  • Social branding help
  • Presenting the candidate to opportunities or hiring managers
  • Presenting the candidate to recruiters
  • Interview preparation
  • Post-interview assessment
  • Negotiation coaching

Career coaches typically offer a wider variety of services than outplacement firms and typically get more involved in the details of the candidate’s search. This is an advantage for some – a disadvantage for others.

Notice that the goals of an outplacement service and career coach are very different. Notice also that the client is different also.

Which is right for you?

It depends on your needs, how comfortable (or successful) you are at DIY job-search, whether you want individualized help, and your resources.

Advantages to Outplacement:

  • Employer paid – free to the candidate
  • Typically provides temporary office space, phone/answering service, fax, meeting rooms, copier, internet/computer access
  • Provides standardized packages
  • Typically large, recognizable names
  • Often has a recruiting division or dedicated recruiter
  • Typically gives access to online skills training, especially computer training

Advantages to Career Coaching

  • Candidate paid – Advantage is that coach works for candidate, since candidate pays the fee
  • Provides individualized help
  • Provides tactical detailed job search help – a coach can outsource part of the search for the candidate (ex: resume writing, finding opportunities, networking, introducing to company contacts).
  • Extended help – Career coaching may extends through the entire job search duration
  • Provides assistance using large personal Rolodex of hiring managers and recruiters

Outplacement might be right for you if:

  1. You have significant experience (and are staying in) in a high demand field – Doctor, Nurse, Green technology, Social Media
  2. You can’t focus on job search from a home office – Small children, over attentive pets, other distractions
  3. You’re want to start your own firm, rather than work for someone else
  4. You like the DIY approach to job search
  5. Your finances prevent you from hiring additional help

Career Coaching might be right for you if:

  1. Your recent experience is in a declining industry or job function
  2. You want to change job functions or industries
  3. You define yourself as a generalist on your resume or verbally
  4. You are over 40
  5. You get employer/recruiter calls, but few interviews
  6. You get interviews, but few call backs
  7. You’ve been a finalist a few times, but have never gotten the offer
  8. You’re finding the wrong opportunities
  9. You haven’t networked since your last job search, and your network has gone stale
  10. Your recent employment history is “bumpy” and you’ve held a number of jobs less than 2 years
  11. Your online reputation is negative, reflects someone else, or unable to be found
  12. You have less than 500 Linkedin connections
  13. Your existing network isn’t helping you get interviews
  14. You don’t have contacts at your target companies outside of HR (unless you’re an HR professional)
  15. You are uncomfortable in interviews
  16. The first impression you give interviewers isn’t working well
  17. The job market scares you (Average over 30 weeks, executives between 9-18 months)
  18. You’re open to a career investment if you can see the payback

Please note – In an effort to keep this article balanced, the candidate should expect many more advantages from a service that they pay for, vs a service that costs them nothing. If the advantages don’t outweigh the cost, then the service probably won’t be right for you.

Outplacement vs Career Coaching is a very personal and difficult decision for professionals in transition. However, candidates often see only the difference of free vs paid service – while overlooking the major differences between these services and differences between their goals.

Readers – please share your ideas about when outplacement might be right or when career coaching might be favorable for candidates. Please share your success stories as well as your horror stories in the comments below.


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Author: Phil Rosenberg

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