The provision of outplacement services can make a big difference to a company's bottom line. The truth of that statement may not be obvious at first, but it follows logically from the proposition that one hallmark of a successful company is its highly engaged workforce.
Study after study has confirmed that employee engagement is critical to profitability, and providing quality outplacement services is a proven way to significantly improve the level of engagement. That makes outplacement more than a way to ease managers' minds, and much more than a way to make the best of a bad situation.
From time to time, psychologists or their fellow students of the human condition decide to publish lists that rate the difficult circumstances likely to befall us all, and the loss of a job always ranks high among stressful life events. If you've been laid off, you'll probably agree that the experience deserves its ranking.
Layoffs’ Widespread Impact
Less attention goes to the other players in the layoff scenario. While the people losing their jobs feel the most pain, layoffs also touch the people who are left behind. They impact other employees, whether or not those employees work in similar positions to those laid off. They affect managers, the ones who had to make the difficult decisions and the ones who had to carry those decisions out.
The impact does not stay within the four walls of the organization, however. Layoffs can resonate with a company's competitors, its partners and its customers.
If layoffs are handled badly, they can make it very hard for companies to maintain workforce morale, retain valued employees and attract new blood. News travels fast, both within and outside the company, and that's especially true of bad news.
Reputation and Engagement
When employers in all fields acknowledge that skilled employees are in short supply, retention is critical, and the ability to compete with other employers for the best workers is essential. That competitive ability depends on an employer's reputation, which in turn is closely related to the level of employee engagement.
While that's reason enough to make engagement a priority, engagement does more: It is a driver of business results.
In one representative study, the Aberdeen Group found a direct correlation between engagement levels and revenue: "Organizations with formal engagement strategies improved revenue per full-time equivalent two times greater than those with an informal strategy and a whopping six times more than those with no engagement strategy."
Outplacement services are part of that strategy. They are a sign (no guarantee) of an organization committed to its workers – even in the worst of times – and the commitment is reciprocated. In an earlier study, Aberdeen reported that, for almost half of those organizations with formal outplacement services, 60 percent of their workers were highly engaged. For companies without formal outplacement, highly engaged workers accounted for only 33 percent of the workforce.
Future Referrals Matter
Engagement strategies, including outplacement efforts, can make a big difference to the company's future as an employer. Most employers acknowledge that referrals from existing employees are among the best and most cost-effective ways to recruit new talent. This is a resource that's well worth cultivating in anticipation of better times, and your employees will be acutely aware of the treatment of those who have been laid off.
For some organizations, the value of outplacement services as a driver of a global value like employee engagement is still not enough to shift the balance in favor of investing in those services. Perhaps that value lacks a certain immediacy. There are, however, some clear and immediate gains worth remembering.
For one thing, outplacement services have been shown to lower the cost of unemployment claims, with studies indicating savings of approximately 5 percent. For another, they reduce the chances of lay-off related litigation and, in the event that litigation does ensue, they provide a way to put the company's behavior in the best possible light.
In addition, a formal outplacement program allows employers to oversee the situation from a consistent perspective, putting them in a much better position to ensure that labor laws and employment contracts are respected throughout the process.
Finally, they reduce the cost of hiring new employees. As already noted, they help to maintain a company's reputation in the employment market, making it easier and faster to recruit from outside. They also make it possible to maintain positive relationships with former employees, a pool of candidates available to fill open positions in the future.
In the end, outplacement services are more than a kindly gesture, noble purpose though that may be. They're signs of a company acting strategically in its own best interest.
The best outplacement services are part of a formal, structured program. They can include help with resume writing, job counseling, education and advice on the contemporary job search, a search that may be quite different from the one familiar to employees who last looked for work decades ago.
Services with Value
Employers tend to attach the greatest value two components of the services: their cost and the speed with which they get results. Companies with real commitment to the process will not simply trust their instincts about what matters. Instead, they track the outplacement services to determine which specific offering attract the most employee interest. Which services are used the most? Which ones do employees return to? Which are used the longest?
For their part, employees may also base their ultimate opinions on speed of placement in a new job, but they put different values on different services. Resume consulting is typically high on the employee list. They understand that applicants are plentiful and that they need to differentiate themselves from the mass. They also know that times have changed and that they may not be emphasizing the skills that matter in today's market. As a result, knowledgeable advice is welcome.
Employees also value psychological counseling and education in current hiring practices, but, in every case, quality makes the biggest difference. When employees complain about outplacement services, their dissatisfaction often stems from a lack of individual attention. They're getting standard, perfunctory advice. Counselors hand them boilerplate documents that, they feel, are no better than the resumes and cover letters they can do themselves.
There is always a risk that specific outplacement services are not up to the job, but that does not mean that companies should stop trying. The same principle applies to employees. There's nothing to lose and everything to gain by sampling the services you're offered, and even a tiny bit of good advice or a minimal tweak to your resume can make a big difference to your job search.