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What is outplacement?

Outplacement is any service that helps an employee who leaves to get a new job or move on to a new career. Access to professional reclassification services is offered by some employers as a social advantage for their staff. Outplacement services can be beneficial for all parties in monetary, professional and emotional terms and, most often, ensure a peaceful end to a working relationship.

Key points to remember

  • Outplacement is a service that helps a dismissed employee make the transition to a new job, which can include CV writing, job hunting and job coaching.
  • Outplacement can have benefits and costs for employers and employees, as part of the total cost of compensating a company’s workforce.
  • Outplacement can reduce stress and turbulence for employees in transition and reduce risk to the employer.

Understanding outplacement

No one likes being fired or fired or sharing information with someone else, but going beyond severance pay by providing outplacement services can help both parties through an often difficult transition.

Sometimes the services are offered internally by the company that lets an employee go; others hire a third party when necessary to keep spending low or when tensions or awkwardness are particularly high. Outplacement services were traditionally provided in an outplacement business so that the former employee could have access to the office tools (such as a telephone and a computer) that he or she needed to write resumes and letters from motivation and find a new job. Many employees today have home offices and may only need to visit an outplacement company for career advice, if at all, because advice can also be done over the phone.

Whatever the case, the services remain the same: resume writing and cover letter, coaching, market analysis, development of maintenance skills, salary negotiation and other services designed to give a former employee the best opportunity to find another job as quickly as possible.

Benefits of outplacement services

From an employee’s perspective, outplacement certainly alleviates the emotional burden associated with job loss. It is often quite overwhelming to find pink panties on your desk. Professional redeployment services can often help relieve feelings of insecurity, embarrassment, anger or fear of the unknown, which makes job hunting much more difficult.

On the other hand, employees should recognize that employer paid outplacement services will ultimately be factored into the employer’s total labor cost. This means that any money the employer pays for outplacement could be offset by reducing total compensation by other means.

From an employer’s point of view, the provision of outplacement services can show that the company really cares about the person as a human being and could do a lot to thwart any revenge. Insurers who provide insurance against the risk of unfair dismissal lawsuits look favorably on companies that have a solid outplacement plan, as this can reduce the risk of costly legal problems. Compassionate outplacement can also reduce the risk of workplace violence and active shooter situations.

It is also a way to maintain an ongoing relationship with an employee. This is especially important if it is a layoff due to downsizing and not poor performance or bad behavior, or if the person leaves on their own volition. It is in the best interest of a company to encourage and support if it plans to re-hire the person at a later date.

The other aspect of providing outplacement services that bodes well for businesses is to save money on unemployment claims. Although companies do not pay a supplement when a former employee files an approved claim, the annual tax rate they pay to the state for unemployment can be affected.

This is because this rate is determined by the number of claims that former employees make in a year. For example, according to Chron.com, “a business with a $ 1 million payroll business can save over $ 70,000 a year by avoiding jobless claims.”

On the cost side, employers should take into account the normal and expected turnover rate of their workforce. Frequent or large layoffs can significantly increase the cost of providing outplacement services. Employers must plan ahead and budget for the expected cost of outplacement as part of their total labor cost.

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