Outplacement, or career transition services, can help employers maintain their brand reputation when layoffs or terminations become unavoidable. But with something as important as public image on the line, it often pays to partner with a third party that knows how to help departing employees land on their feet. That’s where outplacement firms come in.

Outplacement firms

What are outplacement firms?

Outplacement firms are organizations that specialize in helping employees who are terminated or laid off find new jobs or careers. And since their services are considered an employer-sponsored benefit and provided as part of a severance package, there’s typically no cost to the former employee.

What services do outplacement firms offer?

Depending on the employer and their budget, career transition services can range from low-end options, like a pro bono public speaker, to high-end options, like personalized job coaches. Most outplacement firms offer some combination of the following:

  • Job coaching (individual or group)
  • Personal branding
  • Career assessments
  • Interview preparation
  • Networking opportunities
  • Resume writing
  • Job search training
  • Salary research
  • Job market analysis

What are the benefits of using an outplacement firm?

Providing in-house career counseling to former employees can be risky, especially if emotions over the separation are running high. Businesses are usually better off partnering with an outplacement firm for professional support. The benefits of this approach include:

  • Positive brand reputation

    Unfavorable online reviews can make it difficult for employers to attract talent when they’re ready to rehire. Outplacement, however, shows that an employer has compassion and may mitigate the effects of negative feedback following layoffs.
  • Reduced risk of retaliation

    The last thing any employer wants is a wrongful termination lawsuit, or worse, a workplace violence incident. But if exiting employees know that an outplacement firm is going to help them find a new job, it may help ease tensions.
  • Improved employee engagement

    The employees that remain after a round of layoffs are usually anxious about their own futures. To keep up morale, outpatient firms will often help employers with their communication tactics and may offer resiliency training for retained workers.
  • Lower unemployment expenses

    Many state unemployment programs are based on an employer’s claims history. Outpatient firms that are able to find new jobs for former employees quickly means less claims per year and, potentially, lower unemployment tax rates.

How much do outplacement firms cost?

The cost of an outplacement firm ranges from a few hundred dollars for basic services to upwards of $20,000 for executive services. Charges are based per employee, but employers are only billed for those who actually use the service. In addition, outplacement fees may be fixed for the length of the service or the provider may charge extra for extended support.

What should employers look for in choosing an outplacement services firm?

Although budgets are a critical factor for all businesses, employers should evaluate career transition services on more than just cost. Those who want to offer the best possible experience for their outgoing employees may want to look for outplacement firms that:

  • Offer personalized experiences
    Career counseling in a one-on-one setting is usually the most effective type of outplacement because it can be tailored to an individual’s experience level, skill set, desired industry, etc.
  • Use the latest technology
    In addition to having virtual capabilities for participants, high-tech outplacement firms provide employers with real-time analytics, including utilization rates, job landing rates, satisfaction rates and other performance indicators.
  • Have knowledgeable staff
    Some providers not only have qualified job coaches on their team, but also professional resume writers and job concierges for an unparalleled level of expertise.
  • Are conveniently accessible
    Outplacement firms that offer flexible options – group meetings, individual sessions, in-person instruction, online resources, video conferences, etc. – allow individuals to participate on their own schedule and in a way that is most comfortable for them.
  • Provide services for retained employees
    Manager notification training, resiliency training and redeployment solutions can help businesses maintain productivity and improve morale with their remaining employees when layoffs occur.

Frequently asked questions about outplacement firms

How do employers benefit from outplacement and offboarding?

Because it’s an employer-sponsored benefit, outplacement services help businesses maintain their brand reputation during layoffs or terminations. It also may improve morale among the remaining workers, minimize legal risk and reduce unemployment tax rates.

Are outplacement firms worth it?

Partnering with an outplacement firm may be a worthy investment if a business is struggling to recruit or retain employees due to a poor reputation. Although it may take some time to change public opinion, career transition services show that an employer empathizes with and supports its people during difficult times.

This guide is intended to be used as a starting point in analyzing outplacement and is not a comprehensive resource of requirements. It offers practical information concerning the subject matter and is provided with the understanding that ADP is not rendering legal or tax advice or other professional services.

ADP Editorial Team

ADP Editorial Team The ADP editorial team is comprised of human resource professionals with extensive experience solving complex HR challenges for businesses of all sizes.