Terminations and layoffs are stressful situations for both employees and employers, but outplacement, a career assistance service that helps exiting workers find new jobs, can ease the transition. Businesses that offer it may also find that it improves their reputation and reduces the cost of unemployment claims.

What is outplacement?

Outplacement is an employer-sponsored benefit typically provided as part of a severance package to help terminated and laid off workers move on to another job or career. Services focus on improving the skills needed for re-employment, such as writing resumes and cover letters, navigating job boards, interviewing, networking and negotiating salaries.

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How does outplacement work?

Although outplacement can be provided in house, it’s more common for businesses to partner with a third party that specializes in job coaching and career transition services. Former employees who take advantage of the program may interact with their coach one-on-one, as part of a group, in-person, online or by phone. The specific arrangement usually depends on the extent of the program.

How much does outplacement cost?

Outplacement fees vary based on the number of employees enrolled and the types of services provided, which means there’s usually an option for every budget. High-end programs may be in person and one-on-one, while those that are lower-end tend to be online or in group settings. Prices generally are also fixed per employee, regardless of how long it takes someone to land employment.

What services does outplacement not include?

Outplacement job coaches are experts in helping people improve their personal brand, but they are not recruiters. They don’t staff positions directly, nor do they locate job openings or apply to them on behalf of someone else.

Outplacement and modern job search

In the past, outplacement services were provided at a physical location so that individuals who did not have access to a personal phone or computer could easily work on their resume and apply to jobs. Advancements in technology, however, have made that business model largely obsolete. While coaching is sometimes still available in person today, much of outplacement is conducted remotely through online instruction, video conferences and text message.

What are the benefits to offering outplacement?

Because it’s money spent on individuals who are leaving the organization, outplacement might seem like an unnecessary expense. However, career transition services are often as advantageous to employers as they are to employees and worth the added investment. Businesses that offer them may be able to:

  • Improve their reputation

    Outplacement programs send the message that an employer cares about its people and may lessen negative feedback when layoffs are announced. Businesses that are viewed favorably in the public also typically have a better chance of recruiting talent in the future.
  • Mitigate risk

    Employees commonly feel angry or frustrated when laid off or fired. But if they know that their former employer is going to help them get another job, it may reduce the chance of workplace violence or a wrongful termination lawsuit.
  • Boost employee morale

    An important part of outplacement is communication. Employers who clearly explain that career assistance services were made available to any employees who were let go may help ease anxiety among the remaining workers and keep them engaged.
  • Reduce unemployment costs

    The faster former employees find new jobs, the less they will need unemployment benefits. Businesses that reduce their number of claims per year may be eligible for lower unemployment insurance rates.

Potential drawbacks to outplacement

People may be competing with peers in their outplacement program for the same jobs. If the service uses standard resume templates and group coaching instead of tailored, one-on-one instruction, it can be difficult for individuals to differentiate themselves in the job market. Additionally, some professionals with extensive experience may find anything but personalized outplacement to be unhelpful.

What are outplacement services for employers?

Outplacement isn’t always designed just with former employees in mind. Consulting services may also be available for employers and HR professionals. Some outplacement providers will help with creating downsizing strategies, communicating layoffs to the workforce and implementing support measures to keep retained employees productive.

How do you choose an outplacement provider?

With brand reputation and employee relations at stake, not just any outplacement service will do. A thorough evaluation of providers generally follows these steps:

  1. Look for personalized experiences
    Solutions that are tailored to the way in which employees prefer to work – in-person, virtual, etc. – tend to produce the best results.
  2. Check the background of the coaching staff
    To be truly effective, job coaches must have knowledge of the candidate’s preferred industry and desired geographic market.
  3. Demo the technology
    Technology should not only enhance the job seeker’s experience, but also provide relevant metrics to employers about how well their outplacement program is performing.
  4. Ask about services for retained employees
    Outplacement providers that offer resiliency training and redeployment solutions can help businesses ensure that their remaining employees stay productive and engaged.
  5. Review the vendor’s track record
    Customer satisfactions ratings and the percentage of participants that find new jobs through an outplacement program are some indicators of a vendor’s effectiveness.

Frequently asked questions about outplacement

What are outplacement benefits?

Outplacement benefits are services paid for by an employer as part of a severance package that help terminated and laid off employees transition to a new career elsewhere.

What is outplacement counseling?

Outplacement counseling is another name for job coaching, which helps candidates assess their skills and market themselves to potential employers. It may be provided individually or in a group setting.

What is outplacement assistance?

Outplacement assistance is a career program for terminated and laid off employees that helps them with writing resumes, preparing for interviews, networking, navigating job boards and other tactics necessary to land a job.

Why would a company provide outplacement assistance to an employee?

Although outplacement assistance adds to the cost of benefits packages, employers offer it because it can help improve their company reputation and may mitigate some of the risk associated with layoffs and terminations.

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.