why outplacement is an essential service to offer during a recession

World affairs, inflation, supply chain issues, energy prices, and economic uncertainty are pushing the global economy towards a recession. That means a rise in layoffs is on the horizon as a reduction in force (RIF) becomes necessary for many businesses in order to survive. 

Whether your company lays off one employee or a hundred, how outgoing employees are treated has a long-term impact on your company's brand. As an HR manager, you should work to make the process less painful and damaging, and the best way to do this is by offering outplacement services.

the importance of offering outplacement services

For millions of employees who lose their jobs during a recession, a customized outplacement service gives them the dignity and confidence to find a new path forward. It does this by improving their job search skills using resume writers and personal branding experts, as well as through assessments and training. This suite of services helps them navigate the competitive process of finding a new role.

Since you cannot predict the end of a recession or its ultimate impact, helping workers to the best of your abilities through a challenging process like layoffs not only is the right thing to do, but it reflects well on your organization when the economy recovers and you need to re-hire. Mishandling departures of employees make for front-page news, and the brand damage an organization faces in the moment of this exposure can also be detrimental to a hiring process. 

Using an outplacement provider provides reassurance and support for the remaining staff. You shouldn’t underestimate the impact a layoff has on those that remain. They will also be going through a difficult time – not least as they lose colleagues that they may have strong relationships with – and many will be thinking, ‘am I next?’ To counteract this, some outplacement vendors place coaching at the heart of their offer and can support remaining employees with 1:1 coaching or a post-change workshop to motivate them and get them engaged again.

cushion the blow of a layoff

Even if layoffs are expected, for those employees affected, it can significantly destabilize their lives. It's bad enough that they are losing a paycheck and office-based social network, but the importance of having a purpose by going to work is underestimated by many. This is compounded further if they have been at the organization for some time. An added complication of being laid off in a recession period is that job opportunities may not be immediate. HR managers have difficulty breaking the news to employees, especially when tasked with mass layoffs. So, how do you reduce the blow of reduction in force?

An obvious way to overcome many of these challenges is for your company to include outplacement services as part of the severance package. Outplacement services provide real help to a participant, something positive to focus on, and a clear and expedited career transition path. Over 80 percent of laid-off workers using Randstad RiseSmart as part of their severance package will typically find a job of the same package or better, and are significantly more likely to find a new role which eases the psychological burden and stress of losing a job. 

Other reasons for using professional outplacement services include:

• provision of personalized services: employees are likely to look for a similar role in the job market when they get laid off. If their role is no longer available in the industry, it prolongs the search process. Outplacement professionals can help laid-off workers align their skills to the current jobs in the market. Personalized services guide employees in pivoting their careers in different industries. From career and networking advice to upskilling suggestions, employees will have a larger platform to transition to a different role smoothly.
• assisting with the changing job search process: laid-off employees who have been out of the job market for some time usually require guidance in navigating the job search process. For instance, employees receive job search counseling and learn to use assessment tools for skills. Outplacement professionals help them begin or revamp their social media presence and guide them on ways to leverage the platforms for opportunities. 
• individualized job search training: aside from becoming reacquainted with job search tools and techniques, employees receive guidance on personal branding, resume writing, and practicing interview skills.

protect your reputation and employer brand 

During a recession, a company should be socially responsible when managing layoffs. Your actions in this moment affect your corporate image and brand. Aside from treating employees with respect and dignity during the layoff, an outplacement program ensures they get a positive exit from the business. 

But how does offering outplacement services reduce the adverse impact on your corporate brand and reputation? Firstly, terminated employees are likely to transition to other jobs faster with outplacement instead of remaining unemployed for months and being a negative force. Around 38 percent of laid-off employees give negative feedback on company rating sites such as Glassdoor. Those negative reviews on job boards can really affect your talent acquisition in the short and long term. Job applicants regularly admit to doing background checks on would-be employers, and many wouldn't consider companies with unexpected layoffs or redundancies handled without outplacement support.

A second study also revealed that 70 percent of job seekers have a better opinion of their former employer after receiving outplacement services. Even if they don't secure a job immediately, career coaching, interview practice, and networking keep them focused on moving forward. Hence, they will likely speak positively or at least remain neutral about their experience in your company.

As an employer, you will be used to offering severance packages to employees after termination, but you can also provide outplacement services that offer a more long-term solution. There is also some flexibility in terms of cost – you can either allow laid-off employees to choose between severance packages and outplacement services or simply offer both as a ‘bundle’ deal. Additionally, outplacement programs can be organized in a group setting, ensuring that cost savings can be made while still keeping everyone satisfied.

added career support for outgoing employees during transition

Employers don't like downsizing, and no employee enjoys being on the receiving end of a termination letter. However, during uncertain economic times, layoffs are necessary. That's why outplacement and career transition support are crucial for HR managers and laid-off workers. Providing support and guidance to assist laid-off workers in closing a door and opening another, some of the typical offerings of career transition support include:

• directional assessment: the first step to kicking off a job hunt for a laid-off worker is conducting a directional assessment to develop their vision and focus on their goals. When they have an objective and direction for their career, they can match their skills to the market demands. Directional assessment assists terminated employees in evaluating their skills, roles, and job opportunities in the market. It also forms a basis for helping them build a strong resume, pitch, and LinkedIn profile.
• empowering laid-off workers: losing a job is a demoralizing and emotional process, and employees need the motivation to move to the next step of their careers. Outplacement services direct their next steps by giving them tools that define their passions. Empowerment speeds up their career transition, and they can get a job within a short period.
• career coaching: outplacement services should include career coaching, especially for workers who have been out of the job market for a while. A certified career coach can help them catch up on the latest career trends and structure their time in career transitions. Career coaching is also valuable for executives with challenging transitions or employees switching to other industries. Time-consuming career transitions require progressive outplacement solutions.
• networking advice: outplacement services can provide a platform for networking and guide laid-off workers. Career coaches provide effective networking strategies to boost job search and interview preparation. Outplacement providers also act as a sounding board for laid-off workers to vent their concerns and receive positive reinforcement to help them focus on moving forward.

preserving company culture with support for ‘survivors’

In a competitive hiring market, companies should maintain a good company culture to attract and maintain talents. Including outplacement services in the benefits package improves your competitiveness and provides value to workers. 

Outplacement services are also useful in repairing the negative effects of the reduction in the workforce. One or two employee departures trigger employee turnover due to low morale and lack of job security.

Studies show that 74 percent of surviving workers show declined productivity while 61 percent lose faith in the company's prospects. Providing career transition support to the terminated workforce eases anxiety among survivors and builds loyalty. Workers are less likely to seek greener pastures if they see you do right by other employees. Besides, when their colleagues transition faster to new roles, the survivors will resume their normal routine faster.

Changing layoff practices like providing advance notice and communicating reasons for the reduction in the workforce also boosts security for survivors. Advance notice allows terminated employees to take advantage of the outplacement services and search for jobs when they are still marketable. You should also communicate the economic challenges facing the company that led to the layoffs and maintain clarity on the company's future.

mitigating potential legal risks

Layoffs and termination often lead to legal battles, from claims of unfair and unbalanced severance packages to wrongful termination. For a company already facing tough economic times, the legal expenses and claims settlement can lead to further financial problems and a drain of time and resources for your HR team. If you have an exit plan for terminated workers, you can minimize the legal risk to the company.

Offering outplacement services leads to faster career transitions. That means your workers will likely secure new jobs before exiting the company. If employees move to the next job from the termination, depending on where you are located, you might not need to pay a severance package.

When employees are getting active support and are focused on their next career move, they are unlikely to engage you in legal battles over an unpaid or unfair severance package. Wrongful termination lawsuits are also unlikely if your employees successfully transition to new opportunities quickly with the help of your outplacement support.

prepare for inevitable economic shifts

With the market's cyclical nature, companies should brace themselves for changes in the economic outlook. You shouldn't be surprised by the recession and other economic downturns. While it is impossible to predict economic shifts, HR managers should always be prepared. Preparation for the inevitable reduction in the workforce is crucial since layoffs occur during recession and expansion.

Unfortunately, many HR managers discover layoff plans far too late to develop a successful career transition plan. Once the reduction in the workforce is set in motion, addressing the need for an employee assistance program is challenging if you don't have an outplacement service in place.

Selecting and investing in an outplacement provider should be performed before an imminent reduction in the workforce so timings and communications to employees can be properly considered. Early preparation saves you from legal concerns and costly mistakes but – arguably more importantly in terms of reputation – gives you time to agree on a suitable cascade of communications and appropriate messaging.

randstad risesmart as your strategic business partner

Randstad RiseSmart outplacement services provide a comprehensive career transition solution for laid-off workers. Notable third parties, including The Everest Group, consider RiseSmart a leader in the field of outplacement and career transitions. Solutions available include personalized resume review, interview preparation, and one-to-one coaching. Your employees will receive customized career transition options and a suite of tech tools to aid their job search.

Find out how to handle layoffs in a compassionate way by checking out our guide on planning and managing redundancies.