Outplacement and Your Human Capital Management Strategy

Written by Andrea Holyfield, MS, FCC on April 27, 2018

Recently, I had a conversation with a client in which she said, “I’ve been separated from my previous company for two months, and I’m finally ready to work with them again.” My immediate thought was that she was exploring employment opportunities after being laid off, but that wasn’t the case at all. After losing her job as a Human Resources Business Partner at a well-known cable and internet company, she was ready to engage the organization as a consumer.

For the past 12 years, my client had worked for a supplier of cable and internet, and when she was notified of her involuntary separation, she immediately cancelled her services. Similar to how one feels after a break-up, she needed some time. After taking a vacation to spend time with her family and then engaging with her company-sponsored career transition services, she was ready to transition her relationship to full-paying customer. She stated, “I was upset when I found out that I was losing my job after all of this time, but [the company] has been good to me. Even in letting me go, they didn’t have to offer me these benefits, but they did.”

Our conversation really made me take a hard look at the life cycle of human capital and examine how offering outplacement impacts not just current and future employees, but a host of additional human interactions. When examining the costs of offering exiting employees career transition benefits, it might be helpful to weigh expenses against these four high-level benefits:

  1. Reduction of Litigation Loss: It is not uncommon for exiting employees to consider litigation against their former company. Once separated, an employee may begin to explore feelings related to unfair or discriminatory hiring practices, hostile work environments or unfair termination practices, even in an at-will environment. Research has shown that companies that offer career transition services see a considerably lower incidence of litigation than those that fail to offer these services.
  2. Talent Acquisition Efforts: Although it is a bit counter-intuitive, providing outplacement services is a sound talent acquisition strategy. Culture and reputation either help or hinder an organization’s ability to attract strong talent. A recent report produced by Corporate Responsibility Magazine cited that 69% of those applying for jobs would not accept a position if the company had a bad reputation—even if the person was unemployed!
  3. Employee Retention: Providing career transition services can also positively affect an organization’s retention efforts. Just as reputation may influence a prospective candidate’s decision to accept a position, how a company supports its exiting employees impacts the trust and morale of current staff. During times of involuntary turnover, employees who fear they will be left without support or resources may prematurely seek new opportunities. Assisting your exiting employees improves the morale and productivity of current employees and shows a good-faith effort to remaining professionals.
  4. Consumer Trust: It is not just incoming and current employees who watch how leadership supports its staff. We live in a consumer-driven society where people spend money with companies that they feel align with their values, morals and beliefs. Supporting exiting employees through a separation is good PR. Being seen as a caring and people-centric corporation boosts consumer trust and benefits an organization’s bottom line.

When an organization is faced with the hard decision of laying off employees, there are a lot of fiscal factors it must consider. It has become customary for organizations to offer some sort of severance package based on years of service, but benefits are also very important to the separating employee. In addition to medical benefits, organizations that understand the power of branding will do their due diligence in supporting their corporate family members as they transition into their next professional ventures.

Andrea Holyfield is a Consulting Manager for Warren Averett Workplace.

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