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Outplacement as Part of Human Resources


14 July 2021

Stephanie Taylor

No organization wants to let go of its valued employees, and top employers understand the importance of supporting a successful career transition for impacted individuals following a layoff. Empathetic employers committed to embracing corporate values offer outplacement services to help departing employees land their next role. In this piece, we’ll share an overview of everything you need to know about outplacement and its benefits to organizations and employees.

What is outplacement?

Outplacement can be defined as professional care about dismissed employees, employees remaining in an organization, and managers responsible for dismissals. However, it primarily includes programs aiming at making forced leave easier for the affected employees and helping them gain success in the labor market.

The main objective of outplacement is to reduce adverse effects:

Concerning the fact that dismissals are perceived as unfavorable not only from the viewpoint of those dismissed but also from the viewpoint of remaining employees and the public, as they primarily evoke a negative state of a company, frequently even it’s winding up, there are many reasons for outplacement to happen in an organization:

Internal, towards leaving employees:

  • A positive signal to leaving employees (that we have done something more for them than, e.g., an acknowledgment of their work for us);
  • Help the most vulnerable group of dismissed employees falling under the 50+ group;
  • An increased chance of possible employment renewal (in case of changed conditions in an organization, resulting in enlarging the number of employees);
  • Customer retention (dismissed employees become clients, as they know the quality of products and services of their organization);
  • Maintaining positive contacts in case an employee leaves for a different company

Internal, towards remaining employees:

  • Motivation and stabilization of remaining employees (dismissals significantly affect performance and work ethics, and it is, therefore, necessary to focus on stabilizing the working atmosphere, as well as a form of a clear message of an organization on how it views its employees.
  • The organization thus clearly declares that it appreciates its employees and does not only get rid of them); reduced managers’ concerns about undealt dismissals (the outplacement process must prepare managers for a demanding task – how to handle notice deliveries).

External, towards all stakeholders:

  • Retention of customers and suppliers; part of the organization’s public relations; part of the social pillar of socially responsible entrepreneurship. All the reasons above have something in common – the positive future of an organization.

To focus on all outplacement requirements, it is necessary to focus on it comprehensively and perceive it as a process. Several authors have defined the outplacement process while they divide it into various steps. They most frequently include four- to eight-step methods, while most outplacement processes focus only on leaving employees, which is insufficient. We identify to the greatest extent with Hroník (2013), who comprehended the outplacement process comprehensively and divided it into four steps:

Step 1: Creation of outplacement project (who manages; what form it will have; specification of quality, speed, and price levels; retention plan; specification of selection criteria)

Step 2: Creation of outplacement communication plan (procedure and content of both internal and external communications, preparation of managers for a change, i.e., understanding, acceptance, adoption)

Step 3: Outplacement execution (program for critical employees, programs for those dismissed)

Step 4: Evaluation of executed outplacement (outplacement costs and effectiveness, proposals, modifications, and changes).

The first task of employees responsible for managing the outplacement process is to define what positions will be canceled and replaced and, subsequently, to define particular employees to be dismissed. Key positions following an organizational strategy are described first, with a subsequent definition of positions to be canceled and activities and knowledge necessary to transfer to other positions.

Subsequently, after it has been specified which employees will be affected by changes, it is necessary to select criteria based on which employees will be chosen. Based on such measures, organizations should be able to clearly define employees they are interested in and want to include in a retention program, as well as employees who have to leave.

It is also necessary to specify its form within the first step of outplacement, which typically directly depends on several dismissed employees and their position and financial resources reserved for outplacement. Instead, a group form of outplacement is applied to managers at lower levels and regular employees, especially when an organization dismisses a more significant number of employees. It would be financially unbearable to ensure individual outplacement for such employees, and individual outplacement is primarily intended for senior management. Based on the findings above, it is also necessary for the first step to determine a time interval of outplacement, i.e., to specify a time within which organizations will provide outplacement.

Short-term outplacement (up to three months, is usually applied for junior positions, and this interval is typically prolonged to six months for the middle classes. Long-term outplacement is primarily provided for nine and more months to top management and positions applicable with difficulties. Last but not least, within the first step of outplacement, it is necessary to define educational methods and their content. Educational methods most frequently applied include personal assessment, lectures, roleplaying, and e-learning. Personal SWOT analysis is most commonly carried out, and a development plan is often specified within the individual assessment.

It is necessary within all variables to focus on a so-called Magic triangle, while the quality of outplacement is most essential and should not be at the expense of price or time. Outplacement quality should always be in the first place, and the final cost of outplacement significantly depends on who will carry it out.

In the second step, it is necessary to focus on creating an outplacement communication plan. Crucial communication elements within outplacement include openness and timeliness, i.e., telling the truth openly, not concealing anything unless necessary for other strategic reasons, and speaking on time. It is the only way to prevent rumors, half-truths, and disinformation in and outside organizations. Internal communication, which needs to precede external communication, is most important within communication inwards. It requires a clear definition of the strategic objectives of an organization, communication of dismissals as a fact, and presenting to employees how not dismissing now would threaten employees and organizations in the future. It is also necessary within internal communication to prepare managers for contact with the dismissed and remaining employees. They must motivate the remaining employees to cope with their uncertainty and divide new responsibilities and tasks among them. Individual communication and approach also have to be correctly focused on key employees.

Communication outwards with other stakeholders is also essential, as they need to be informed to be aware of a new organizational strategy and not to feel under threat, respectively, to be able to quantify their threat and declare their values and importance for the given organization.

Outplacement execution itself is included in the third step of an outplacement project. It is a phase in which organizations should have prepared everything and can announce and initiate a change. It is essential to tell that a change is being created, the objectives of such a change, and that it includes dismissals. This step can be divided into two primary areas – program initiation for key employees and a program for dismissed employees. As the aforementioned implies, outplacement does not need to be focused on all employees in an organization. However, it needs to focus on two groups most threatened during dismissals, crucial and dismissed employees.

The last step of the outplacement process should be an evaluation of executed outplacement. Concerning the fact that the main objective of outplacement is a return on costs exerted by an organization, outplacement’s economic recovery needs to be measured. It is given by the fact that the organization’s image will not be tarnished, and the idea of a responsible employer will be built. Inwards, the economic return is measured by remaining employees so that it does not disturb relationships in any direction, but a fair approach is evaluated and appreciated. The given facts can be analyzed through different organizational climate research.

The fourth step of outplacement should result in proposals of its modification concerning the fact that on the grounds of found effectiveness and costs, we can incorporate changes that can be reflected in the future. Outplacement is, in fact only, hardly graspable by company management primarily since what we have not lost due to outplacement and what we could have lost applying a different procedure is only measurable with difficulties. Values declared and used by top managers are often the abstract line of focusing or not focusing on outplacement.

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