The benefits of outplacement for businesses and employees

July 05, 2024 by Jen David

Redundancy and retrenchment processes are never easy. It’s a stressful time for employers and employees alike, when uncertainty and apprehension cause emotions to run high. At times like these, it’s important to follow best practice and legal requirements in order to protect the company brand, retain key staff and maintain day-to-day operations. 

Outplacement services provide a proven way of managing these processes successfully and enable companies to support their impacted employees. 

In this post, we’ll identify the benefits of outplacement services and evaluate potential disadvantages. We’ll also look at how to choose the right outplacement partner. But before we do that, let’s have a recap on what outplacement actually is. 

Outplacement services ensure that workforce reduction processes run as smoothly as possible for both the business and those being laid off. It supports off-boarding by providing every impacted member of staff with specialist services including career coaching, CV writing, business networking, upskilling, interview preparation, and more. 

These days, outplacement providers use innovative career transition technology and online resources to offer flexible access that enables employees to move quickly into new roles. 

How does outplacement support a business?

Outplacement providers can be an invaluable source of support during a workforce reduction. A poorly-handled process can have a long-term negative impact on a company’s brand and bottom line, so commercially it’s wise to engage an outplacement provider – even for small-scale layoffs. 

Redundancies and retrenchments are one of the most stressful events that can occur over a career and no business wants to leave their staff unsupported at such a challenging time.  Outplacement enables staff to transition easily to a new position with as little stress as possible, which avoids damage to the employer’s brand and reputation and enhances staff retention and productivity. 

Outplacement is generally offered at the end of a period of downsizing, when Human Resources teams need to support affected staff by guiding them into new, meaningful work. Done properly, outplacement can be very beneficial to both staff and employer. 

The benefits of outplacement services for employees 

Now we’ve discussed the role of outplacement, let’s dive deeper into the key benefits of engaging an outplacement provider to support your talent strategy. There are several advantages for impacted employees which make engaging an outplacement provider a sound business decision. 

Employees secure new roles more quickly

When employees are affected by workforce downsizing, the priority is to get them back into work as quickly as possible. Without the support of an outplacement service, an employee can take over a year to secure a new role. By working with an outplacement provider, however, that time is considerably shortened. In fact, employees using the Careerminds service regularly land new positions within 11.5 weeks. That’s an impressive three times faster than average!

Using an innovative approach backed by technology, virtual outplacement providers such as Careerminds can offer personalised services including career coaching and job search support. We accommodate every individual’s needs, location, and schedule, to enable a smooth transition into a meaningful position. Our participants enjoy a 95% placement rate!

Employees don’t experience so many negative emotions

Redundancy can affect individuals in different ways. They may feel worried, angry, or sad, among other emotions. Sometimes, they may spread their negative feelings either online or verbally. Even staff who are being retained can be negatively affected by the event – they may wonder if they’re next in line to lose their job, worry about their co-workers, or feel the pressure of maintaining day-to-day operations. 

Providing outplacement support to impacted staff can help to dampen those negative emotions – not just for the participants, but across the wider organisation too. It removes some of the pain associated with landing a new role, by speeding up the process and helping employees to feel supported and safe. 

Employees feel more secure and valued

We know that even the best staff, at the best companies, can be affected by downsizing events. When the business engages an outplacement provider, it proves its commitment to its employees and helps them to feel more secure and valued. This will be noticed and will help to protect your employer brand. 

With an outplacement provider, employees receive the emotional support they need and are conscious that their employer cares enough to provide that assistance. They will also feel the financial benefit, as they are more likely to land a new position quickly. 

Employees receive personal support 

The best outplacement providers tailor their services to the employee, based on their role and seniority. For example, an executive needs very different support to an entry-level employee. Providing bespoke services for all levels of impacted staff is a clear benefit of outplacement. 

As you can see, the advantages of working with an outplacement provider far outweigh the cost. The situation is already difficult enough for the employees and their employer. Offering outplacement support as part of your commitment to staff wellbeing and social responsibility will empower your employees in their search for a new role. It also helps to ensure the event is as positive as possible for both parties. 

Careerminds works with the company to provide extended support to impacted employees, helping them to transition seamlessly by offering modern outplacement services to provide these valued benefits to your staff.  

The benefits of outplacement services for businesses

It’s clear now that outgoing staff will benefit from working with an outplacement provider, but how do the services benefit the company providing them? There are significant benefits to the employer, in fact, which stretch far beyond the individual employee (although employee benefits should be at the heart of your selection). 

Let’s take a look at how employers can benefit, and how partnering with an outplacement provider can positively impact not just your company brand, but also its performance. Providing career support via outplacement services shows that you care about your employees, even after they’ve been let go, by providing them with a route back to work in a role they truly value. While a robust severance package is a good start, outplacement is the cherry on top – it enables employees to thrive. 

Businesses protect their reputation and brand

While redundancies and retrenchments can’t always be avoided, every event puts your company at risk of external scrutiny. And quite rightly, because, whatever the scale of the event, it has a profound effect on people’s lives. 

While the downsizing may be necessary to enable the business to move forwards, that isn’t usually a priority for impacted staff or the general public. For this reason, HR teams should take steps to protect the business during layoff events to ensure they run smoothly. 

Providing all-round support to outgoing employees can ensure they don’t leave feeling resentful. It also reassures remaining staff that they would also be taken care of if they were to find themselves in a similar situation. 

Including outplacement services as part of your severance package shows your employees that you care, whether they’ve been let go or are being retained. A key advantage of working with an outplacement provider is that it shows your employees and the rest of the world that you support your teams – and that will enhance your company’s reputation both internally and externally. 

Your brand and corporate image are important, especially when the internet has the power to amplify opinions. Employer review sites, such as Glassdoor, mean that disgruntled employees can leave negative reviews for the world to see. Bad reviews can prove disastrous. With redundancies already seen as a negative, poor public feedback is the last thing your business needs. Badly executed processes can have a significant impact on your company brand that extends far beyond the walls of the building.

Conversely, a well-executed offboarding process, including outplacement, can help to safeguard your company against the potential for bad press. It shows you take your responsibility to both current and former employees seriously and highlights your commitment to providing the support that modern professionals need. This builds a positive perception of your company, among both employees and the community. As a result, Careerminds clients score 16.5% higher than competitors on Glassdoor reviews. 

Businesses can reduce stress for the HR team and wider business

Even without the potential for damaging your company’s reputation, a reduction in workforce can still cause a significant amount of stress across the business. The emotional toll on HR of notifying and processing impacted staff can’t be underestimated, especially if they are long-term staff. 

By offering an outplacement solution, the HR team tasked with managing the downsizing will feel less pressure, knowing that the employees they are letting go will be taken care of. They’ll rest easier in the knowledge that a team of professionals is supporting staff into meaningful new positions. 

As we mentioned before, the stress-reducing benefits will be felt by retained staff. They will also feel impacted by the layoff, which could trigger increased turnover as people feel their roles aren’t safe any more. Offering outplacement can ease tension among retained staff, who know that they’ll be supported and well-treated, even if they did lose their jobs. 

Businesses benefit from increased employee morale 

While reductions in workforce can often negatively affect morale, a well-handled process can actually boost motivation. By providing outplacement services, you’re telling retained staff that they work for a company that cares. They know they will have a cushion if they were ever laid off themselves. This attitude positively affects morale, commitment, and productivity. 

By establishing this precedent, you’re showing the world that you’re a company that people want to work for.

Businesses retain staff

Of course, when workforce reduction events happen, there will always be employees that the business needs to retain. Just as outplacement improves morale and motivation among remaining staff, so too does it improve staff retention and productivity. Employees who feel valued and supported are often more willing to work hard and invest themselves in the company’s success. 

As a result, you’ll be in a position to retain your top talent and they’re more likely to show the same – or even better – levels of productivity. And naturally, productive staff are more efficient and enable the business to achieve its goals more quickly. You’ll also place the business in a better position to thrive following the reduction process. 

Businesses can prove their support for company values 

As well as protecting your company brand, working with an outplacement provider can protect and reinforce your company values to both departing and remaining staff. The majority of businesses publish their core values, with most proclaiming the value of their employees. 

There is a large volume of data supporting the connection between productivity and value-driven businesses, so offering outplacement during a time of upheaval proves that the company lives its values rather than just publishing platitudes. 

Businesses reduce the risk of legal action

Aggrieved employees are more likely to take legal action against a company. When an employee is laid off, they may have either real or perceived grievances. Defending a potentially unlawful termination can be costly, time-consuming, and reputationally damaging. 

Working with an outplacement provider can help to mitigate these risks during a layoff event. By adding outplacement to a severance agreement, departing staff are less likely to feel angry or hard-done-by and are more likely to maintain healthy workplace relationships. That in turn reduces the risk of a lawsuit. 

Businesses can reduce costs by working in partnership 

Layoffs are an unavoidable fact of doing business, so it’s likely that any company will experience one at some point. For that reason, it’s imperative that your outplacement provider will work with you as a strategic partner. A good outplacement service will guide you through the event, minimising cost and stress. By having an outplacement supplier on retainer (Careerminds doesn’t charge a retainer fee, by the way!) you can manage reduction events on your own timeline. 

Even though they can hurt, delaying the process can be worse – especially if the business is suffering financially. A retained outplacement partner can work with you when you need them.

By including outplacement in the severance deal, you also have a lever for negotiation on individual compensation. The tangible benefits provided by outplacement services can be less costly than other severance options.

The disadvantages of outplacement services 

As we’ve explored the advantages of using outplacement services in great depth, for both companies and their staff, we should also discuss the disadvantages of offering such services. While the disadvantages aren’t necessarily universal, it’s wise to bear potential drawbacks in mind as you source your outplacement partner. 

Avoidable cost 

Cost impact is always a concern for businesses – and choosing the wrong partner could mean the business incurs excessive, or needlessly high, costs. For example, traditional outplacement providers often charge retainer fees or place time limits on their services. That could leave your impacted employees without support at the time they need it most. 

Modern outplacement providers however, such as Careerminds, don’t place restrictions on the length of time services are available or charge retainer fees. In fact, Careerminds is the only provider that offers unlimited services until placement. That means we’ll support your participating employees until they secure new, meaningful work. We know that impacted employees are thrown into turmoil when layoffs are announced, so we’re committed to providing the support they need until they are successfully placed. 

Stay aware of potentially hidden or unnecessary costs when choosing an outplacement provider, or they could end up outweighing the benefits of the service. 

Competitors recruiting your talent

While a retrenchment exercise might help your business, it often doesn’t help the country’s economy. Businesses of all sizes need a healthy economy, because that’s when they thrive. Outplacement providers get people back into work faster and help individuals to upskill to compete in the job market. That way, the wider workforce benefits from qualified, confident workers. Outplacement providers match companies releasing employees with companies that need them, which helps the economy and benefits everyone. 

A downside of this for the downsizing company, however, is that former employees may secure new roles with competitor businesses. Naturally, this will depend on their employment contracts and severance agreements, but it’s a potential consequence to be aware of, as outplacement firms can ease this transition and make it happen more quickly. We think it’s more important to conduct a smooth, stress free, and financially necessary workforce reduction. 

Final thoughts on the benefits of outplacement services

Outplacement services provide great benefits to any talent strategy and eases the stressful process of offboarding. By partnering with a modern outplacement service, you’ll be able to: 

  • Conduct this potentially damaging event without harming the company’s reputation
  • Show retained staff that they will be supported in a similar situation 
  • Reduce stress on the wider business
  • Successfully deliver a company-saving workforce change
  • Reduce the potential for lawsuits 
  • Prove the company lives its company values 

If your employer brand and staff retention are of genuine importance, the offboarding process needs to be conducted with as much care as recruitment and development.

It’s not just the company that benefits – impacted employees benefit too:

  • They’ll feel supported in their career transition
  • They’ll be able to move into new, meaningful roles
  • They’ll land a new position quickly, before the severance cheque runs out 
  • They’ll be less stressed throughout the process
  • They’ll understand that the company cares for them even after their exit

Each of these benefits should be a consideration when you choose the best outplacement partner for your business. After all, making the wrong choice could be as damaging as not using an outplacement service at all. It’s worth knowing that businesses that switch to Careerminds save up to 70% compared to their existing outplacement provider. They are then able to reinvest those savings into programmes that resolve key business challenges, such as engaging and developing top talent. 

Want to learn more about Careerminds and the benefits of our outplacement provision? We’d love to chat with you. Just click on the link below to schedule a conversation with one of our experts. We’re ready to answer questions about outplacement and to help you decide if Careerminds is the right outplacement service for your organisation.

Jen David

Jen David

Jen is a careers writer and CV specialist, with over 13 years' experience in the job search sector. Find out more by connecting with her on LinkedIn or visiting her website.

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