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So, what exactly is “Outplacement?”
According to the Wall Street Journal (WSJ), “More than two-thirds of 265 U.S. employers with layoffs during the past two years offered outplacement…according to a June  survey for The Wall Street Journal by the American Management Association and Institute for Corporate Productivity.”
The WSJ, in the cited article, says that 58.5% of laid-off professionals receive outplacement for 1-3 months.
Another 17.7% receive outplacement for 3-6 months. Executives are likely to receive more services for a longer period of time.
The cost of outplacement ranges from a high of over $10,000 for senior executives to $1,472 for hourly employees. The quantity of services is reflected by the range. A company highlighted in an Inc. article, says that their employer-paid coaching and support last for a year at a cost ranging from $1,000 to $25,000.
Employers of choice provide outplacement services to assist employees in transitioning to a new job. They are also constantly aware of the impact of their actions—in particular how they treat laid-off employees—on the minds and hearts of their remaining employees.
Pragmatically, employers offer outplacement to protect their reputations as desirable employers, to head off potential lawsuits and, in the instance where a lawsuit is filed, to burnish a positive image, and to minimize their liability for unemployment compensation payments.
In studies done by David Sirota, Ph.D., Founder and Chairman Emeritus of Sirota Survey Intelligence, if employers are implementing layoffs humanely and effectively, their programs will contain three components:
“…Financial assistance, outplacement assistance, and communications. With regard to financial and outplacement assistance, the best companies tend to be uncommonly generous and helpful in what they do for employees.
Thus, while a fairly typical severance for lower-paid employees is one or two weeks for every year of service, these companies may offer a month’s pay for every year of service, plus assistance with medical insurance coverage.
While it has become the norm in industry to provide outplacement assistance for finding a new position, these companies might provide supplements such as financial consultation and an allowance for retraining costs. They often will actively help employees find other jobs. And, they will usually guarantee laid-off employees priority consideration for rehire when business conditions improve.”
Employers can use outplacement effectively to help employees bridge the gap between unemployment and a new job. The key is to utilize an outplacement firm that provides effective services for former employees.
Employers are well advised to measure and track the effectiveness of the outplacement firm they use and to gather the opinions and experience of former employees who utilized the outplacement service.
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