The Outplacement Primer: Where, Why, and How Companies Are Using Outplacement

If you’re unfamiliar with the term “outplacement,” you probably know it by one of its other names, like “career transition assistance,” “offboarding support,” or “redeployment.” The monikers are various but the service is ultimately the same: helping employees find new jobs or career paths, typically after a layoff or termination.

In the age of unhappy ex-employees leaving scathing reviews on Glassdoor and social media platforms, more companies are choosing to offer outplacement services to mitigate the damage disgruntled workers can do to their brands. Outplacement can soften the blow of a job loss by helping the employee find a new opportunity in the labor market — sometimes one that even offers higher pay and a better fit.

Here is a primer on what outplacement involves, why more companies are offering the service, and where it is becoming the norm.

What Is Outplacement?

Generally, outplacement involves a company hiring an outside service provider to assist departing employees with their career transitions. Among the typical services offered are personal career coaching, resume reviews, and interview practice.

Traditional outplacement services provide employees with in-person meetings with career development specialists. Such services, though highly personalized, can be expensive, and thus are often offered only to senior executives. To make outplacement services available to a larger group of employees, an increasing number of companies are opting for virtual outplacement services. In these situations, employees might get one-on-one coaching through video or text chat and receive digital resume reviews through an online interface.

That said, the type and level of service offered vary widely from company to company. Some outplacement service providers offer robust suites of services like dedicated coaches and interview practice with detailed feedback, while other companies offer little more than a job board. When selecting an outplacement provider, it’s important to first carefully consider the specific needs of your employees.

Why Are Companies Offering Outplacement Services?

One major reason so many more companies have invested in outplacement services in recent years is better brand management. Just a couple decades ago, unhappy employees could do little to let anyone outside their immediate circle know about negative experiences with a company. Today, anyone can take to Glassdoor to vent their feelings or share their thoughts on social media for reposts and retweets.

This negative commentary from former employees can have major consequences for companies. In the “2017 CareerArc Employer Branding Study,” 66 percent of candidates reported they had shared their negative thoughts about an employer that had laid them off, and 64 percent of consumers reported they had stopped purchasing products from a brand after hearing news of that company’s poor employee treatment. Furthermore, employees’ negative reviews can make it hard for the company to recruit and retain talent in the future. If job seekers consistently hear reports of poor treatment from an organization, few will want to take a job with said organization.

By offering outplacement services, companies help employees depart on a more positive note, which decrease the likelihood that the employee will feel the need to criticize the organization publicly. Plus, when departing employees leave under good circumstances, morale is preserved for remaining employees.

Some companies are choosing to retain outplacement services as a basic benefit for their employees at all times, as opposed to hiring outplacement companies only when major layoffs are imminent. This way, employees know throughout their tenures that their employer supports their long-term careers, even if their employment with the company ends.

Where Is Outplacement Most Common?

Large companies are especially likely to have outplacement services. Not only do these organization often have the budget to offer such services, but they also depend on outplacement to retain former employees as customers, brand ambassadors, and potential boomerang hires. Many smaller companies also invest in outplacement services for similar reasons, although they often choose alternative outplacement arrangements for budgetary reasons.

Tech companies, which tend to be forward-thinking about online brand management, have been quick to embrace virtual outplacement services for their internet-savvy employees. In addition, sectors that experience a lot of mergers and acquisitions or other forms of market volatility also make frequent use of outplacement programs. Aerospace, healthcare, finance, and retail all fall in this category.

That said, the use of outplacement services seems to be growing in all sectors as more companies pay more attention to their brand reputations and company cultures. Today, social media and other online forums not only keep people in contact with friends, but they also keep relationships between former employees and employers alive. Providing outplacement services can be a key way to ensure these relationships stay positive.

Yair Riemer is president of career transition services at CareerArc.