What Is Outplacement?
Let me explain outplacement directly: it's a set of services or benefits that employers offer as part of a severance package to help terminated employees move on to new jobs.
You might encounter outplacement as any assistance aimed at helping a departing employee land a new position or shift careers. Some employers provide this as a standard benefit, and it often pays off for everyone involved—financially, professionally, and emotionally—leading to a smoother end to the employment relationship.
Key Takeaways
- Outplacement helps terminated employees transition to new jobs with services like resume writing, job searching, and coaching.
- It involves benefits and costs for both employers and employees, forming part of a company's overall labor compensation expenses.
- Outplacement reduces stress for employees in transition and lowers risks for the employer.
Understanding Outplacement
No one enjoys getting fired or laid off, or having to deliver that news, but offering outplacement services beyond a basic severance can ease the process for both sides.
Sometimes, companies handle these services internally, while others bring in third parties to cut costs or avoid high tensions. Traditionally, you'd go to an outplacement firm for access to office tools like phones and computers to build resumes and hunt for jobs. Now, with home offices common, you might only need to visit for counseling—or handle it all over the phone.
Regardless, the core services stay consistent: writing resumes and cover letters, providing coaching, analyzing job markets, sharpening interview skills, negotiating salaries, and other steps to get you back into employment quickly.
Benefits of Outplacement Services
From your perspective as an employee, outplacement eases the emotional weight of job loss. Finding a pink slip is overwhelming enough, and these services can address feelings of insecurity, embarrassment, anger, or uncertainty that complicate your job search.
That said, remember that when employers pay for outplacement, it rolls into their total labor costs. This means the money spent here might reduce compensation elsewhere. You might prefer extra cash to handle job loss risks yourself, especially if your position feels secure.
For employers, offering outplacement demonstrates genuine care for the individual, which can prevent retaliation. Insurance providers for wrongful termination risks view strong outplacement programs positively, as they cut down on legal issues. It also lowers chances of workplace violence.
Additionally, it helps maintain relationships with former employees, which matters in layoffs due to downsizing rather than performance issues, or if they leave voluntarily. You want to stay supportive if rehiring could be an option later.
Another plus for companies is potential savings on unemployment claims. While you don't pay extra per claim, your state unemployment tax rate can rise based on the number of claims from past employees in some states.
On the downside, consider your workforce's turnover rate. Frequent or large-scale layoffs drive up outplacement costs, so plan and budget this into your total labor expenses ahead of time.
Other articles for you
Descriptive statistics summarize and describe the main features of a dataset without drawing conclusions beyond the data itself.
Free enterprise is an economic system where market forces, not government intervention, determine prices, products, and services through private property rights and voluntary exchanges.
Currency serves as a medium of exchange for goods and services, typically issued by governments in physical or digital forms.
A venture capitalist provides funding to high-potential startups in exchange for equity, focusing on growth and high returns despite risks.
A research analyst collects, analyzes, and reports data on securities or assets to aid decision-making in finance.
A game-changer is an individual or company that significantly alters the status quo through vision, determination, and innovation.
Footnotes to financial statements provide essential additional details and clarifications to help understand a company's reported figures and accounting practices.
A hard loan is a foreign loan repaid in a stable hard currency to minimize risks for lenders.
Gamma measures how much an option's delta changes with a one-point shift in the underlying asset's price.
A hierarchical deterministic wallet generates and manages cryptocurrency keys from a single seed for enhanced security and convenience.