Executive Outplacement Services: What They Provide, The Benefits and Cost
By Nicole Carter | September 1, 2021 |
What Are Executive Outplacement Services?
Executive outplacement services are often utilized by employers to assist a departing employee in transitioning to a new job. Providing executive outplacement can be included as part of the employee’s termination package, and is provided at no cost to them, to make the change a bit easier. Some services that are typically included are resume reviews, job search advice, interview preparation, personalized coaching, career and self-assessments.
Employers often choose to provide this kind of service to their departing employees for various reasons, with the ultimate goal of making the termination seamless for all parties. Job loss often comes as a surprise for an employee, especially those that have been on the job for long periods of time. In an instant, they find themselves unsure of what their next steps will be or how to find a new job. Outplacement services can be a lifeline to them.
Benefits of Executive Outplacement Services
For the employer some of the benefits are:
- Positive experiences for impacted employees
- Guided support through challenging and difficult conversations
- Improved productivity and morale among remaining employees
- Maintaining company image and reputation
- Reducing severance package costs
- Treating employees fairly often reduces the likelihood of lawsuits
Outplacement services are a proactive way to maintain a positive employer image. By taking care of your employees, even those who you no longer wish to employ, you are reducing the risk of the exiting employee sharing a negative review about the organization.
Benefits to the employee:
- Access to immediate support, reducing stress and helping with the emotional aspects of termination
- Interview & communication preparation
- Resume & cover letter coaching
- Networking advice
- Career & self-assessment
- Job search & labour market analysis
Exiting employees will be grateful with the support that outplacement services provide. Even if it’s just updating a resume and providing job market insight. Any assistance will decrease the stressors associated with job change, and ensure new work is found faster. This support can make a world of difference for someone who finds themselves unexpectedly back on the job market.
What Is The Process of Outplacement Services
When a company is looking to let go of an employee and wants to provide them with outplacement services, they’ll reach out to an outplacement services organization, like HR Factor. From there, the outplacement provider will work one-on-one with the employee to ensure they are set up for success when they reenter the job market.
It is common amongst outplacement firms to provide tiers to outplacement services. For example, HR Factor has 3 different options to suit the employee and the employer budget – Basic, Standard and Premium. The basic tier includes career & self assessment, resume and cover letter preparation, job search & labour market analysis. Standard includes everything in basic plus personal rebranding and contract negotiation. Finally, premium includes everything in basic, standard and more.
Deciding which tier to go with depends on what your needs are is and what you can/want to offer to your employee.
Costs of Executive Outplacement Services
Some organizations are deterred from outplacement services from the initial higher costs in addition to severance packages. In the long run the cost to have outplacement services should decrease the amount of severance owed to an employee by helping them find new work quickly, therefore mitigating their loss.
Outplacement costs are a fixed price however the cost savings are realized when an employer can shorten the period of severance or salary continuance. Ultimately, outplacement services help mitigate the costs by finding said employee a new job as soon as possible. The savings differ per employee as it’s based on different variables like years worked etc.
Let’s say a company pays $3,500/month for outplacement services and salary continuance is $12,500 per month (base salary) with benefits. If their severance agreement was for a 2 year period and they found work after 3 months of outplacement then you can expect significant savings. The actual savings in this scenario will once again vary depending on specifics of the termination agreement.