It's FREE!

Create a Profile and Start Networking with HR Professionals
Register Now - It's Free Registration info
Member Content
Blogs | Questions | Files | Events | HR Groups | Members
PHR/SPHR Exam Prep Course
HRCI Recertification

  • Upcoming Events
  • Past Events
  • Public Events

More Webcasts

Upcoming Webcast
5th August 2014, 2:00 PM

The Personal Excellence App by

Upcoming Webcast
6th August 2014, 10:00 AM

Contractor Safety Considerations

More Virtual Conferences

Upcoming Conference
13 August - 14 August 2014

Social Media and Employee Communications

Upcoming Conference
25 August - 26 August 2014

Online Staffing and Sourcing

My Events
View and edit your current events.
Add Event

Click the "add event" button to create a listing for your event

Advertise Here
  • Currently 2.9/5 Stars.
  • 1
  • 2
  • 3
  • 4
  • 5
2.9 from 40 votes

Outplacement Services Face Drastic Changes

Date: August 1 2001

It used to be that downsized workers got "full outplacement

In the long ago days when employees stayed with a company for decades and there was such a thing as corporate bounty, workers who did get terminated or downsized usually received "full outplacement."   That meant office space, phones and even some form of career counseling, for as long as needed, until they found another position.   The arrangement was generous and civilized but of course, was eventually doomed by the lean, mean downsizing business trends of the late 80s and 90s.   In fact, that traditional concept of full outplacement for as long as needed has gone the way of the three-martini lunch and company pension.

Changing Needs and Expectations

The result is that the definition of "outplacement" has changed dramatically, along with the needs, priorities and expectations of both employers and employees.   From the company´s perspective, there are several reasons not to offer long-term outplacement packages.   First, in a strong economy, managers no longer feel guilty or hesitant to let someone go; there are plenty of jobs out there.   Second, companies now downsize routinely, for much less drastic reasons that previously.   A downturn in the stock market, a dip in profits, or another outside event may be enough to trigger a period of downsizing.   In addition, new hires are expected to perform up to expectations much more quickly; the downsizing may loom as a threat very early in the job.   Finally, organizations are no longer getting rid of 20- or 30-year veterans; those employees were downsized long ago.

Today´s average American worker has been on the job for only four years and companies feel little need to take care of such short-timers.   Therefore, upon downsizing, both severance and outplacement packages are smaller than ever before.   So today´s average outplacement package among major corporations typically consists of three months of outplacement for managers and lower-level executives, including a cubicle, phone and perhaps five hours of career counseling for three months.   Smaller companies may now offer merely a month of outplacement, barely time to get started.   And truly strapped companies may now offer nothing more than a two-day seminar, meaning no actual assistance for the employee during the job search itself.

From the employee´s point of view of outplacement, things are very different as well.   Most notably, they no longer care much about desk space and phones.   Anyone who has been in the job market for a while is likely to have phone, fax, computer and email at home and no longer looks to a former employer to provide those things.   Instead, a downsized worker´s most pressing need is for solid professional career counseling to get them back on track.   And increasingly, that quality counseling is what they expect companies to provide.

How Outplacement Firms are Reacting

Not surprisingly, it´s the traditional outplacement firms (employers contract with them to provide these services) that are now caught in a bind.   Firms such as such as Lee Hecht Harrison, Right Associates and Drake Beam Morin are still the longtime leaders, but they´re no longer commanding such large fees from downsizing companies and therefore, are being forced to service more and more people to achieve the same revenue.   With large overhead in real estate and office space - even to house job hunters for a short while - along with counseling costs, these firms have been forced to trim services.   Unfortunately, the career counseling component of traditional outplacement is often the first service to go.   Or if not eliminated, counseling may still be given short shrift.   Today´s outplacement firm counselor may have 40 to 60 clients at one time.   It´s like a teacher having too many pupils in class with no time for individual attention. At the largest firms, for example, the focus is more towards group rather than individual counseling.

As a result of these trends, outplaced workers are searching for alternatives to the traditional and increasingly less effective methods.   Some may meet with career counselors privately.   But many more are asking their former companies for outplacement that consists of 100 percent career counseling instead of office space and telephones.

Despite all the cutting back, some companies are in harmony with the new trends in outplacement and some focus almost entirely on the crucial counseling component. JP Morgan-Chase, for example, is one of the few major US companies offering full outplacement for all employees. This means anyone downsized has the option of 100 percent counseling, including as much individual counseling for as long as needed, as well as office space.   Employees may also choose from an almost overwhelming number of seminars, along with a training grant of $2500 that provides counselors to help them select appropriate training programs.   This applies even when an employee decides to change fields.   The JP Morgan-Chase program has included employees going to cooking school, starting an MBA, taking public speaking courses and training as a physical therapist.   And those staying in the field may choose a wide variety of career-development courses.

What We Think about Outplacement

Our firm, The Five O´Clock Club, is a nationwide provider of outplacement counseling. We think the best approach to outplacement is to forget about offering a desk and instead invest outplacement dollars in providing outplaced employees with career/job-search counseling.   Firms should look for an organization that treats the job seeker as a "client" and offers what employees need most, career counseling. For example, job hunters can receive one year of counseling in a small group setting as well as from five to 15 hours of private counseling during that year, depending on what the employer is willing to pay. We believe that individual counseling in a small group setting coupled with significant private counseling is a more cost effective way to extend a service to employees than traditional packages that emphasize space and phone support.    

There´s no doubt that the needs of downsized employees have changed significantly.   We recommend HR managers retool outplacement services to meet those needs.