Essential Guide to Outplacement Services: Everything You Need to Know as an Employer or Employee

Essential Guide to Outplacement Services: Everything You Need to Know as an Employer or Employee

Thinking of implementing an outplacement service within your organization but don’t know where to start? Searching for alternative outplacement providers with better costs and benefits? Or, you are an employee worried about being laid off and don’t know what support is available? Then keep reading…

Sometimes organizations are left with the tough decision to lay off some of their employees; it’s a harsh reality that no employer or employee wishes to face. However, when no alternative is available that doesn’t have to be the end result. Companies can now choose to offer extended support to those exiting the business as part of the social responsibility of the organization, also known as outplacement services.

Here, we take a look at everything you need to know about the outplacement process, starting with the initial severance period.

SO, WHAT IS A SEVERANCE PACKAGE?
Ultimately, the severance package is an agreement regarding how much pay and company benefits an employer is willing to continue to offer the employee beyond the last paycheck. Obviously it differs within each organization and with no legal obligation, some do not offer any type of severance package at all. If you are an organization without a severance package in place, it is worth your while to look into. Even though you may not understand why an organization would purposely choose to offer this type of deal to employees leaving the business, learning more about some of the benefits will help you see how it can be worthwhile.

Since many times a person's employment is terminated through circumstances external to their work, the provision of severance pay is a positive and supportive gesture.” Susan M Heathfield, HR Expert - thebalance.com

WHAT ARE SOME COMMON SEVERANCE PACKAGES?

A typical severance package will include 1 weeks’ pay based on each continuous year of service with a capped maximum amount. Some organizations will go further and offer a continuation of health care benefits and over 70% of US companies will refer the employee to outplacement services. Other benefits may continue to be extended beyond the termination of employment, at the employer’s discretion.

WHAT ARE YOUR FIRST STEPS AFTER A LAYOFF?

For an employee, hearing the news that they've been laid off is bound to trigger a range of emotions from anxiety to anger, not mentioning a punch to your self-esteem. Rather than sticking your head in the sand, the best thing you can do is be pro-active! If your employer already offers a severance package then that’s great. If not, there’s no harm in trying to negotiate some severance terms of your own.

If your organization cannot offer any additional help then there are other solutions out there such as outplacement services to help get you back into employment quickly and stress free.

As an organization, what can you expect from outplacement?

With outplacement services custom-tailored to your organization, executives can receive guidance on how to articulate the transition, teach interview skills, help with resumes and support career progression. Some outplacement package services, such as VelvetJobs, even guarantee job placements, providing the service for free until the employee lands that new job.

Providing outplacement services to employees who have been laid off will enable them to secure another role faster and shows the remaining employees that you are an organization that cares; this in turn will boost employee loyalty to the company.

Read more: Benefits of Outplacement for Organizations


As an employee, what can you expect from outplacement?

Having an outplacement service on your side when you're in need of a new job means you can expect high levels of support and counseling throughout those stressful times. With the right tools and experts on hand to help you build your resume, job matching systems for exclusive vacancies, expert tips for interview prep, techniques and career coaching you are sure to secure another role sooner rather than later.

Discover: How To Use Outplacement Services as an Employee


What are some of the benefits of outplacement?

There are many benefits to both the employer and employee when it comes to using an outplacement service. The top 5 key benefits of an outplacement service include:

  • An increase in loyalty and satisfaction from remaining employees.
  • Maintains a good reputation for an organization on how they handle this situation.
  • Reduces lawsuit claims for unlawful dismissal.
  • Laid off employees find work quicker with the additional support provided.
  • Provides invaluable counseling to the employee.

Read more about: Key Benefits of Outplacement for Employees

Furthermore, a study published by The Federal Reserve Bank of Chicago projected that an organization with 1,000 employees who were laying off 100 employees could avoid losing about $1.4 million in wrongful termination lawsuits by offering outplacement services. So when you look at the costs of offering outplacement services to your employees versus the costs of just one lawsuit, the money savings are still considerable.



How to negotiate a future outplacement package?

As an employee, negotiating a severance package which includes career transition support shouldn’t be hard if you come prepared. Arrange a one-to-one meeting with your supervisor and discuss all the benefits of providing an career transition package with a prioritized list of negotiation points. Employers will feel better about negotiating terms if they are also going to reap the benefits and having staff that feel more secure about their future will no doubt create a more motivated and satisfied workforce within the organization.

How much do outplacement firms charge?

With outplacement services coming at a high cost, many companies are unable to afford them. Some of the largest outplacement providers can charge anywhere between $3,000 to $10,000 per person and are mainly marketed towards the organization as consumers are not willing to pay that kind of money for themselves. Other outplacement firms targeting smaller companies can charge around $850 to $2,950 per person.

Luckily there are new leading outplacement firms offering extremely competitive prices; Velvet Jobs offer outplacement services to organizations from just $500 per person and with some of the world’s most reputable companies as their customers, you know you're in safe hands.


QUESTIONS EMPLOYERS SHOULD ASK THEIR OUTPLACEMENT SERVICE PROVIDER

To ensure that the outplacement provider is truly supporting employees in their career transition, it is worthwhile to ask some questions as either the employer or employee. These are some questions that you might want to ask as the employer investing in the services of an outplacement provider or the ex-employee being offered outplacement support, helping to ensure you receive the right service for you.

How will I know how my former employees are progressing?

Investing in outplacement is a huge step forward for any organization and with the costs involved for operating such service, (sometimes alongside a severance package), a return on that investment is important for you and your former employees. It is therefore beneficial to be able to track each employee’s progress to ascertain whether the investment was worth it. Ask your outplacement firm to produce regular, informative reports on how long it has taken for your former employees to secure a job that is of the same or better quality than the one which they had within your organization.

What types of support will you (the outplacement provider) be giving my former employees?

Some providers will just offer the tools and training to land an interview, whereas others will ensure their wide range of services such as job matching, personal branding, coaching and counselling do not terminate until the individual has been placed in a role. Obviously the latter is more beneficial for both parties so it is worth finding out how much support the provider will actually give and at what point all services will end.

I’ve read that outplacement services can help achieve 2x faster on-boarding results. How is that possible?

Providers such as VelvetJobs have access to larger networks of companies and a dedicated team of curators finding relevant job matches for each candidate, so research whether your outplacement provider has all of the tools and team available to also achieve these results with a personalized, custom tailored approach.

What happens if my former employee is not securing another post for a longer duration than promised by you (the outplacement provider)?

This is a tough one. You invest in a service to help your former employees secure roles faster (which should inevitably be saving you costs as a ROI), but they are still unemployed beyond the time frame you expected. Ask your provider if they have a job placement guarantee and will provide the services for free or at a discounted rate if progress is extremely slow. Also, ask the outplacement provider to get to the bottom of why this has happened.

How do I know that the outplacement services you offer are relevant to my former staff?

Ask your provider to give you evidence of client feedback and find out how/if they personalize the service to suit each individual person’s needs. It would also be beneficial to follow up with your former employees how likely they are to recommend the service and if there are any areas which they found could be improved from personal experience.


QUESTIONS EMPLOYEES SHOULD ASK THEIR EMPLOYER REGARDING OUTPLACEMENT


How do I begin using outplacement services?

Ask your employer if they will forward your details to the outplacement provider to contact you directly or whether you need to make the first move. Also find out what documents or information is initially required to speed up the job seeking process.

Will I be allowed paid time off for training courses or interviews?

If you are working out your notice period while making use of outplacement services, you need to ask if your employer is willing to give you full pay for your time away from the office when the time away is relevant to securing another post. If not, you can then arrange for any training or interviews to be organized for outside of your working hours meaning you won’t be out of pocket.

What if I want to change my career path?

Maybe you no longer want to continue down the career path you are on. You need to question whether the provider has services available to help you possibly re-train in something else, or get advice on a different job sector altogether. Does the outplacement offer the support to help you realize what you really want to do when you decide you no longer have a clue?

Will I secure a role with outplacement services?

Some providers make it a priority to help you until you secure a new job role whilst other providers are bound by time or cost restraints meaning you may only reach the interview stage and not be offered a role. Ask your employer if their outplacement provider will go that extra mile to actually secure a role for you and if not, why not.

Will my severance package remain in place until I have secured another role with the help of the outplacement services?

Some organizations will terminate the severance package upon the former employee securing another role. Others will have certain time frames meaning you could be in another role and still receiving severance from your ex employer or you could be unlucky and be without an income and still on the job hunt. You can ask your employer if you will receive a set amount of week’s payment regardless of what else is going on or if payments will be severed once you secure another role. Depending on how confident you feel about the outplacement services your employer is giving you, you need to make sure you are getting the best support for both your well-being and financial needs.

As either the employer or employee, you need to be happy with the services your outplacement company has on offer. Therefore, taking the time to ask the right questions is vital - don’t sign an agreement until you have the answers or evidence you need.


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