Benefits of Outplacement for Organizations

Benefits of Outplacement for Organizations

With more and more organizations realizing the positive aspects of offering an outplacement package to their employees, we explore some of the main benefits of why you should be implementing outplacement services within your business…if you’re not already.

At some point there may come a need to lay off some of the employees within your organization. The circumstances leading up to that point right the way through until after the employee has exited the company can be an extremely unsettling and stressful time; that is where outplacement services come in.

Employees reap many benefits of having the support of outplacement services, but what about the organization? If all you’re thinking when you hear outplacement is how costly this service could be, you need to read on.

An increase in loyalty

It's no secret that employee turnover is costly. In fact, research stated in a working paper by the Institute for Research on Labor and Employment (IRLE) state the costs of replacing a worker can be substantial.

The costs of turnover across establishments:

  • $4,000 across all workforce
  • $2,000 per blue collar worker
  • $7,000 per professional or managerial worker

Employees want to feel safe within their job role. If the worse was to happen and they were at risk of losing their job, the security net of outplacement would be there to offer ongoing support and guidance until they secured another post, making the blow a lot softer.

Having the peace of mind that an organization cares by investing in how their workers are supported would definitely be met with loyalty from remaining employees in return.

Attracting and retaining quality talent

The job market is ever changing and many internal and external factors can have an impact on someone’s job.

Candidates looking for a lasting position seek roles which offer them additional security and support in the long-term, so if the choice came down to two great companies, both with the same opportunities but one offers an outplacement package and the other one doesn’t … well, it’s a no-brainer which organization they are more likely to pick and stick with.

Maintains good reputation of the organization

If your organization has to let employees go, not only is it a worry for the employees at risk but it can also negatively impact those employees that remain ‘safe’ this time around. These employees will be looking at how the company deals with the lay-off situation for future reference, so if it’s managed poorly don’t be surprised if remaining employees seek employment with the competition.

However, with outplacement, laid off employees will exit the company feeling protected and valued. This maintains the organization's brand image revealing to remaining employees that they work for an organization that cares for their well-being, giving them reason to talk positively.

Preserve your company’s reputation by caring for transitioning staff. Outplacement plans elevate your brand in the eyes of investors, customers, remaining employees and future job candidates.” Mary Pille - Employers' Association

Decreases lawsuit claims

Employees laid off with an outplacement package in place would no doubt appreciate the support and guidance given to help them into another job post quickly and therefore it would be very unlikely that they would then make a claim against the organization for unfair dismissal. Reducing the risk of a claim then reduces the likelihood of a costly pay out.

Obviously this is an area that is never clear cut and situations could still arise where the employee may have been subjected to unlawful practices. Courts would still look at the overall picture of how the employee has been treated and outplacement costs would be taken into consideration against any claims made.

Cost Savings

With outplacement, costs can be significantly reduced as follows:

  • Added security, having an employer who cares and continued financial stability from finding work quicker all contribute to retaining quality staff and reducing employee turnover costs.
  • Employees find work 2x faster with the help of outplacement so any benefits included within a severance package would also be stopped, saving the organization money.
  • With reduced lawsuits, a study by Chicago Fed , revealed that within an organization of 1,000 employees that were laying off one tenth of their workforce there was the potential to save $1.4million for those that utilized outplacement.

Makes decision making a little easier

Possibly a bit of a selfish benefit from the perspective of the organization, but sometimes as an employer it can be difficult knowing that you are putting people out of work. By offering employees beneficial, helpful services you can sleep easier knowing that you have gone beyond your remit to safeguard your staff and the organization.

While protecting the organization’s budget and brand is important, the main aspects of outplacement services and career transition support is to highlight the value of your employees and focus on the longer term benefits for your organization's brand.

Take a Read: The Essential Guide To Outplacement

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