Outplacement Is an Investment in Recruiting & Retention!

It is time for board members, executives, and HR professionals to review their failed transition policies and evaluate what the most admired organizations have discovered in implementing best-practice outplacement and change management policies… it is all about the future! Unless organizations demonstrate a long-term commitment to candidates, employees and alumni that they are cared for and appreciated, they will act accordingly and go where they are valued and appreciated. High quality outplacement protects your reputation, enhances employee retention, and ensures your future talent pool.
By Sheryl Dawson, CEO, Dawson Consulting Group

Since the 1960s, outplacement has benefited millions of transitioning employees. By providing effective outplacement services their former organizations reaped tangible economic benefits. Those same benefits, both for employees and organizations, are needed today. In fact, the business case for providing outplacement is actually stronger today than in those early years of the fledgling career transition industry. To put it succinctly, whether recruiting or seeking to engage and retain those all-observant millennials, how you treat their friends in a layoff is only a text away from going viral! Given that reality, it is counter-productive that at best only 30% of companies offer outplacement and with declining program budgets and services. What gives?

The Business Case

Bob Parkey, a former public company President, CEO and board director, and a current Partner with Newport Board Group, says it best: “For remaining employees who keenly observe their co-workers and colleagues departing, the cost of regaining damaged trust from a poorly handled transition is immeasurably greater than the cost of a professionally managed transition program.”

As I reflected on my 30 years in talent management and the transition industry, I was both energized and deflated. I am energized because the business case for outplacement is indeed stronger than ever in view of the transparency of social media, recruiting trends, and the imperative for engagement and retention strategies to close the talent gap. On the other hand, I am discouraged that companies are failing to truly understand the economic benefits outplacement provides:

• Increased company image and reputation
• Stronger brand for attracting and retaining talent
• Reduced legal risk and unemployment taxes

It is time for board members, executives, and HR professionals to review their failed transition policies and evaluate what the most admired organizations already have discovered when they have implemented best-practice outplacement and change management policies – that it is all about the future!

Outplacement Retrospective & Economic Drivers

It is gripping to review the succession of economic factors that propelled the industry. Economic downturns, mergers, reorganizations, natural disasters, war, disruptive global and workforce trends, technological change, and energy industry upheavals all impact organizations and their employees at the visceral level. (View Economic Drivers Video)

In reviewing the outplacement industry trajectory (see the Outplacement Retrospective timeline adjacent), it is obvious that the economic drivers that create the need for layoffs are the most compelling argument for a compassionate solution – it is gripping to review in super-fast succession the economic factors that propelled the industry: Economic Drivers Video

Whether you have lived through all those decades of change or just the turbulence of the last one, it is impossible to watch this historical retrospective without an emotional, gut-wrenching reaction! Economic downturns, mergers, reorganizations, natural disasters, war, disruptive global and workforce trends, technological change, and energy industry upheavals all impact organizations and their employees at the visceral level. Bill McCown, HR Director for Diamond Offshore Drilling, shared, “While in the last few decades a lot has changed in the way talent is managed, one thing that has not changed is human nature and the impact of layoffs!”

McCown, who has a long career in human resources and led several major downsizings, went on to say, “If anything, the rationale for outplacement is greater today given the realities of instantaneous communications, recruitment via social media and employee referrals, and the necessity of engagement and retention due to the global talent gap…” Despite this business reality, a recent CareerArc survey demonstrated the disconnect between how employees value outplacement vs organizations: 60% of employees and 71% of job seekers desired outplacement as opposed to merely 34% of employers.

In light of recruiting trends indicating 50% of candidates come from employee referrals and some 15% are boomerangs, it makes all the sense in the world to treat exiting employees as alumni, not discarded chaff!

Quality Outplacement Is Coaching

The outplacement industry has consolidated and created innovative, enabling technologies to deliver services more efficiently and globally, however, like other talent management technological enablers, these innovations cannot replace the need for effective coaching and mentoring support.

One seasoned executive shared his impassioned case for the value of coaching in career transition: “This is an extraordinary learning experience and I am gratefully digesting my assessment report. I’ve never written a resume with the same intentionality that I am doing now – guided by your superb advice. It’s hard work, but the process of being deliberate about setting the tone for the entire next stage of my life is very engaging! The coaching support is amazing — I didn’t honestly expect this — after all, I’ve been doing job transitions for at least 35 years and thought I knew a bit!” His experience is not the exception but the norm for employees and executives who are provided high quality outplacement services regardless of the reason for their transition.

Change Management for Survivors & Alumni

The 2010 study of Most Admired Companies by HayGroup and Fortune analyzed the impact of the 2008 global recession on organizations and employees; given the current downtown, its results are very timely. This is what one Most Admired Company CEO had to say: “Our employees are a tremendous source of strength and consistency, which is even more evident through a downturn. It reinforces creating a strong reservoir of employee engagement and goodwill at all times to help you win during difficult times.”

That reservoir of goodwill includes not only surviving employees, but the alumni employees who were laid off! The difference in results achieved by Most Admired Companies who implemented effective change management policies and practices before and after the 2008 global recession is dramatic:

2010 study of Most Admired Companies by HayGroup and Fortune

Pamela Merritt, Expert Practitioner in change management with the consulting firm North Highland, succinctly summed up the strategic business case in this way, “During reorganization when workforce reduction is required, organizations should always keep in mind the long term implications for their brand. The reality of social media and the internet keeps our past, current and future employees connected. Quality outplacement services provided to impacted employees not only speeds their journeys as jobseekers, but also reduces negative chatter that can undermine your best retention and recruiting efforts. During unpleasant events like RIFs, global leaders should ensure that proper change management steps are taken to reduce the impact on their remaining and future workforce, as well as their brand, image and reputation.”

When organizations treat exiting employees like the valued employees they retain, there are significant tangible gains that will result in potential future boomerangs, candidate referrals, positive social media communications, and an enhanced brand.

The New Worker/Employer Contract

The new worker/employer contract is the ultimate rationale for offering effective outplacement services. One of my favorite musicals is Fiddler on the Roof in which there is a touching scene that poignantly and humorously frames the value of entering any relationship with affection:

Organizations do not marry employees, yet unless organizations demonstrate a long-term commitment to candidates, employees and alumni, they will act accordingly and go where they are valued and appreciated! Simply stated, organizations must present a comprehensive rationale for employees to accept a position, engage, remain with the organization, and once transitioned, think and speak highly of their former organization. That employee value proposition must include:

• Mutually beneficial talent/ employer relationship
• Aligned goals
• Career Development & Advancement
• Meaningful Purpose & Vision/Mission
• Leadership Quality & Commitment
• Future for organization/ employees

So ask yourself these strategic questions:

• Does your organization have a viable worker/employer contract?
• Is there a sound outplacement policy with a sufficient budget for high quality coaching when layoffs are a necessity?
• Are your change management and talent management policies and practices supportive of the entire Talent Cycle from recruiting, onboarding, and development to transition?

If not, implement them today, including high quality outplacement that protects your reputation, enhances employee retention, and ensures your future talent pool!

For more information including the risks of layoffs and an outline of a high quality Outplacement Program view the full presentation, Mitigating the Risk of Layoffs: Employees Have Long Memories.