What is outplacement and why should employers consider it?

The term ‘outplacement’ was first coined in 1977 by James Challenger, the founder of Chicago-based firm Challenger, Gray and Christmas. In essence, outplacement is a means for employers to assist departing employees. Typically offered to those affected by redundancy, outplacement services can also support retirees, aspiring entrepreneurs, or individuals seeking new career opportunities.

While there’s no legal obligation to provide outplacement, many employers offer various forms of support to help departing employees navigate the job market and secure new roles swiftly.

Outplacement services can be delivered internally by the employer, through an external organization, or a combination of both. For numerous businesses, outplacement plays a pivotal role in an employee’s journey, ensuring a departing employee feels well-supported as they transition to the next phase of their career.

As part of outplacement, departing employees receive a wide range of support, including one-on-one coaching or group sessions covering topics like career guidance, job search skills, CV writing, interview preparation, networking, and negotiation techniques.

So, why should employers incorporate outplacement into their employee lifecycle?

Protect Your Employer Brand and Reputation: In today’s digital age, your employer brand and external perception matter immensely. Making employees redundant, especially unexpectedly, is challenging. However, handling it with care, empathy, and by offering outplacement support increases the likelihood of parting on good terms. This, in turn, encourages past employees to recommend your company to others, making it easier and more cost-effective to attract new talent in the future.

Reassure Remaining Employees and Maintain Productivity: Organizational changes, particularly during times of redundancy, can impact productivity as employees may fear for their own job security. Demonstrating that you have an outplacement program in place can alleviate these concerns, allowing employees to focus on their roles.

Reduce the Risk of Litigation: In the absence of a settlement agreement, the risk of legal action against an employer during redundancy periods can be significant. A comprehensive outplacement process can mitigate this risk by encouraging employees to channel their emotions into a positive job search rather than potential legal action.

Facilitate Smoother Handovers: Providing meaningful outplacement support ensures departing employees remain engaged and committed until their departure. This, in turn, facilitates smoother transitions, knowledge sharing, and project handovers within the organization.

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