Written by Raymond Lee, Founder, Careerminds

Outplacement services were once considered a perk reserved for executive layoffs. But in recent years, corporations have rapidly expanded the model to help transitioning employees at all levels.

There are several reasons:

1) As outplacement has gone virtual, it’s proven cost effective for employers and attractive for employees;
2) Leading service providers are setting the bar for employer branding;
3) The recession made layoffs a common experience for many members of the workforce.

Outplacement has always been considered a perk, but now, as the Wall Street Journal notes, it’s an expected perk. In fact, according to a recent survey we conducted, more than 70% of companies offer assistance to displaced employees.

The New Normal

Of course, we’ve all been affected in one way or another by the severe economic recession in recent years. Those tough times have forced leaders to conduct business differently. Companies that survived have learned how to run effectively with a leaner workforce. And now, across-the-board, we see a surge in companies that approach staffing based on on strategic alignment with industry needs.

Instead of reacting to the ebb and flow of internal operating cycles, companies are anticipating talent requirements across their industries, and mapping to those benchmarks. Now, even though the economy is making a strong comeback, it seems workforce alignment is here to stay. In fact, we expect it to play a key role in the ongoing business practice of managing layoffs.

Skipping The Layoff Scramble

However, even with smart planning and a focus on industry trends, companies typically find themselves scrambling for solutions and guidance when they experience shifts in demand. This is common, even when reductions in force (RIFs) are small. Having been in this industry for a long time, I’ve seen first-hand the panic that accompanies any kind of RIF.

As the scale of a layoff expands, so do the risks. Unfortunately, all too often, HR departments don’t establish a relationship with outplacement specialists until the panic has set in and the scrambling has begun. That kind of environment is ripe for poor management choices. It’s certainly no time to pick a provider.

Outplacement Risk — And Easy Insurance

The reality is, no one knows they need outplacement services until they need outplacement services. Conducting a RIF is inherently risky. It makes sense to work with a reliable, prepared outplacement partner. And although most companies realize that they need expert guidance to manage layoffs, most typically avoid engaging with outplacement until the need is urgent.

Rather than waiting to start your research during the pressure of “the scramble,” it’s wise to begin long before the need arises (if it ever does). You have nothing to lose by establishing a trusted relationship with a reputable firm. Think of it as an insurance policy — one that no company can afford to ignore. As the recent economic crisis demonstrated, market demand can be volatile, and in a downturn, the high cost of staffing can have a devastating impact on business performance. It’s important to be prepared, just in case.

Quickly choosing a firm at the top of Google search results, or picking a low-price bidder is a recipe for a mismatch. These might be great companies with viable services, but there’s more to choosing an outplacement provider than that. Does the firm have coaches who understand your industry’s talent requirements? Can it demonstrate a proven history of business relationships and placements in your sector? How easily can global or decentralized employees gain access to services?

Also consider the pricing and services structure. Some outplacement providers charge for each type of service delivered, while others base fees on the duration of an engagement. It’s important to research the average time-to-place for your industry, and consider this along with other decision criteria.

Why It Pays To Think Ahead

These are just a few of major factors in choosing the right outplacement company. But they illustrate my point. Waiting until you’re in the thick of layoffs is a sure bet that you’ll sign-on with an outplacement company that isn’t right for your business. Even a small investment in preparation can help you avoid costly missteps.

Whenever a RIF occurs, your company’s hard-earned employer brand is on the line. If you haven’t already considered potential outplacement scenarios and requirements, it will be too late to compensate. Start doing your homework now. Establish a relationship with a provider. Ask tough questions. Consider them one of your organization’s ongoing HR advisors. You’ll sleep better at night — and you may also gain insights that will help your department operate more effectively — even if you never lay off another employee.

(About the Author: Raymond Lee launched Careerminds in 2008 as a virtual outplacement company. He brings over 18 years human resource leadership, career consulting, and outplacement experience to Careerminds. The concept of virtual outplacement was developed by Raymond after experiencing years of traditional outplacement in a variety of HR roles. Over his career, he planned and executed several large-scale layoffs, and in his last role set up a costly in-house brick and mortar outplacement center for displaced employees to access.)

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