Many leaders think of outplacement as a service that benefits employees leaving the organization. After all, outplacement—also known as career transition support—is generally given to workers who have been laid off to help them land new jobs more quickly and easily.
But offering outplacement provides big benefits for employers too. If you are an HR professional seeking to get leadership approval to provide outplacement services to employees affected by a layoff or other workforce change, here are five key ways to show leadership why this benefit is worth the investment.
Manage reputational risk
The flurry of layoffs and furloughs enacted during the coronavirus crisis has shown just how much an organization’s offboarding process affects its overall reputation. Many companies have been called out by the media for terminating people callously, whether though “an arpeggio of simultaneous Zoom calls lasting just three minutes each” or via “a robotic-sounding, disembodied voice.”
Stories like these often go viral, damaging companies reputations—and, as a result, their customer bases. CareerArc’s Employer Branding Study found 64% of consumers have stopped purchasing a brand after hearing news of that company’s poor employee treatment.
Layoffs are sometimes unavoidable, but a downsizing doesn’t have to lead to bad press. Offboarding processes that are more compassionate toward the employee and provide helpful benefits can actually earn organizations positive headlines. Business Insider, for example, profiled Airbnb’s reduction in force glowingly as “a prime example of how to do layoffs right” for not only better communicating with employees and informing them of layoffs through one-on-one meetings, but also offering a generous severance package, including outplacement services.
Remind leaders that exiting employees will talk about their layoff experiences, whether with the media, on social platforms, or to friends. Providing outplacement during this difficult time of transition is an important way of protecting your organization’s reputational risk.
Lower the costs of hiring key talent
Even companies downsizing in some areas still often see a need for growth in other areas. In the first few months of the coronavirus crisis, about a third (34%) of companies experienced acute hiring needs for specific positions and areas of the business while at the same time seeing a decline in other sectors.
This situation creates a unique workforce challenge, because even while conducting reductions in force for some parts of the business, you need to protect your employer brand so that you can attract new talent for key roles.
One important way of bolstering your brand reputation is providing outplacement services to those employees who are impacted by a layoff. CareerArc’s Employer Branding Study found that employees who were given outplacement or career assistance following a layoff were 38% less likely to harbor a negative perception of their former employer. Not only will you mitigate the risks of negative brand impact from employee reviews, but you may even benefit from hearing and sharing success stories from candidates who land jobs quickly with the help of outplacement.
Outplacement can also help you maintain positive relationships with impacted employees whom you may want to rehire. CareerArc’s Future of Recruiting study found that nearly 70% of unemployed job seekers who were provided outplacement said it improved their relationship and/or perception of their previous employer.
Boost employee engagement and productivity
Layoffs affect not just the employees who leave the company, but also those who stay. Retained workers often struggle with survivor’s guilt, sadness about the departure of their former colleagues, and fears regarding the security of their own jobs.
Leaders can help protect the morale of retained employees by showing it will do its best to support workers and give them a soft landing even in the difficult circumstances of a layoff. When remaining workers see that their ex-coworkers were given effective outplacement support—and in the following weeks, hear about the new career opportunities these former colleagues landed as a result — they will be less likely to experience layoff anxiety that distracts them from their work and alienated from their employers.
Employee engagement has significant business impacts. Gallup found that highly engaged business units result in 21% greater profitability—a statistic likely to convince leaders that outplacement is a worthwhile investment.
Improve the bottom line
One very clear way to show the financial benefits of outplacement service for an organization is by calculating how much outplacement will save you on unemployment insurance. Because strong outplacement services help employees land new positions significantly faster than the average time it takes for a job seeker to find a new position on their own, the money saved by offering outplacement can quickly add up.
In addition, you can show your leadership how much you’ll save on talent acquisition. According to Harvard Business Review, struggling employer brands needed to offer a minimum 10% pay increase to convince a candidate to accept a job offer. This cost averages to about $4,723 more per hire. You can also make a rough calculation of how much more profitable your business will be if your employees are more engaged by extrapolating from Gallup’s study.
Bad publicity around a brand can have extremely negative impacts on a company’s bottom line. CareerArc’s Employer Branding Study found that 64% of consumers have stopped purchasing a brand after hearing news of that company’s poor employee treatment. Moreover, 65% of adults say they would be less likely to purchase goods and services from a company that had laid them off.
Acknowledge the human element
While increasing profits, saving on costs, and improving output are certainly top-of-mind concerns for company leaders, heads of organizations also tend to care deeply about their employees as humans, not just as employees. For this reason, the decision to conduct layoffs is usually a heartwrenching one for those at the top levels of the company.
That said, many leaders are not aware of just how devastating a layoff can be for the impacted person. Layoffs can more than double the likelihood of a stroke and raise mortality risk by 10-15%. In fact, the physical and mental health risks posed by layoffs are so great that some experts argue companies have an ethical obligation to help laid-off workers find new jobs.
Letting leaders know about the full impact that layoffs can have on their former employees could help greenlight investment in outplacement services. This emotional appeal may actually be what is most convincing for many in the C-suite. One of the most common reasons leaders cite for providing outplacement services to displaced workers is simply that it’s the right thing to do.
CareerArc Outplacement helps employers protect employer brand and do right by their workforce by transitioning employees to land their next job 2.5 times faster than the national average time it takes to find employment. Designed for employees of all levels, industries, and backgrounds, CareerArc’s coaching-first, award-winning online platform accelerates career transition by connecting candidates with career coaches faster and by providing personalized guidance for each individual.