As an employer, there’s a good chance you’ll have to let workers go at some point in time. Fortunately, there is a way to make the experience as positive as possible for everyone involved. Outplacement can give you the opportunity to help these workers while protecting your company and reputation. Let’s dive deeper into what outplacement is and how it works.

Outplacement Defined

Also known as career transition services, outplacement is an employee-sponsored benefit provided to workers who have recently been laid off. The service is an option part of offboarding and is usually offered as part of a severance package and designed to help them smoothly transition to another position or industry. In most cases, it includes a variety of services, such as career coaching, interview training, job search advice and more.


How Outplacement Works

Outplacement services are often provided in a one-on-one or group setting, in person, online or via phone. While you can choose an employee to offer outplacement internally, most companies partner with a third party that takes the services off their plate. It’s up to you to determine which option makes sense for your company. If you’re a smaller organization with limited resources, outsourcing is likely your best bet.

Once you lay off employees, you’ll send a list of them to the outplacement provider. Then, your employees will be able to contact them for services. Typically, they’ll meet with a career coach who will explain how they can help. While most outpatient providers will allow former employees to take advantage of services immediately, some have a waiting period.

It’s important to understand that outplacement services do not source jobs or place former employees in them. Instead, they support former employees with the knowledge and training they need to overcome any challenges in finding a new job. They support them with various parts of the job search process and make job loss a bit less stressful.


Benefits of Outplacement

Since outplacement involves spending time and money on employees who are leaving your company, you might wonder why you would commit to it. Here are several of the many benefits you can enjoy if you offer outplacement services.

  • Improve Your Reputation: By investing in outplacement, you convey that you genuinely care about your employees. This can position your company in a positive light and make it easier to recruit and retain top talent down the road.
  • Reduce Risk: It’s not uncommon for workers to feel frustrated or angry when they get laid off. But if they know you’ll help them land another job, they’ll be less likely to engage in workplace violence or a wrongful termination lawsuit.
  • Increase Employee Morale: Layoffs can be uncomfortable for existing employees. If they know you’re offering outplacement services, however, they’ll be less anxious and more motivated to continue working hard for your company.
  • Lower Unemployment Costs: Outplacement helps former employees find new jobs faster than they’d be able to on their own. The faster they secure employment, the less they’ll need unemployment benefits, and the lower your unemployment insurance rates will be.

Drawbacks of Outplacement

The most obvious downside of outplacement is that it will cost you. If you’re a startup or newer company, you might not have the funds to cover these services. Also, your laid-off workers may be competing with their peers for the same jobs. In addition, unless your outplacement services are personalized, some workers might struggle to stand out in the job market and land the type of positions they desire.


Choosing an Outplacement Provider

Not all outplacement providers are created equal. In fact, there are a number of differences between them. Each provider will offer its own set of services, which may include some or all of the following:

  • One-on-one career coaching
  • Résumé writing and review
  • Job interview preparation and practice
  • Career interests and skills assessments
  • Job searching tools
  • Pay negotiation training
  • Networking advice
  • Digital presence and social media optimization
  • Entrepreneurial services

Before you move forward with an outplacement provider, make sure you do the research. Read reviews and ask for references so that you know they’re reputable. It’s also well worth your time to check the background and experience of the staff.

If the provider uses a certain type of software or technology, test it in advance. In addition, inquire about services they may offer for current employees, such as retirement solutions and resiliency training. If possible, opt for an outplacement solution with personalized services rather than a one-size-fits-all approach. It should be flexible and let you pick and choose the offerings you value most.

Also note that outplacement service might also be available through a human resource information system (HRIS). For more information, check out our article on the best HRIS systems.

Bottom Line

Outplacement is an effective way to get former employees back to work after a layoff. As long as you choose a qualified internal staff member or provider, you’ll find that outplacement also benefits you as a company. You’ll protect your reputation, mitigate risk, boost employee morale and even save some money on unemployment costs.


Frequently Asked Questions (FAQs)

How much does outplacement cost?

Outplacement fees depend on the types of services provided and the number of employees enrolled. This means they can range from a few hundred dollars to up to $20,000. Of course, you’ll pay more for a long list of personalized services than you would if you opt for a few generic offerings.

What services does outplacement exclude?

While outplacement services help former employees become attractive candidates for new jobs, they’re not recruiters. They do not find jobs, apply for jobs or guarantee jobs. It’s up to your former employees to do the work and use the resources they are offered.

Are outplacement services required?

Outplacement services are optional, rather than a legal requirement. But by offering them, you can prove that you value your workforce and reduce the negative impact of layoffs.