Outplacement services are sometimes perceived to be a luxury or unnecessary expense. Neither of these perceptions is accurate.
Instead of being an expense, effective outplacement services can actually save a company considerably by minimizing expenses and preserving a valuable reputation. Outplacement services should be a natural extension of the commitment that companies and organizations make to their employees in return for the dedicated commitment expected from employees.
Here are several of the components of the business case for job placement services.
The Cost of Unemployment Benefits
The longer terminated employees are receiving unemployment benefits, the more that future unemployment expenses will cost a company or organization.
For many individuals, unemployment can last from a few weeks to well over a year. Companies and organizations reducing their workforce can save significantly in future unemployment costs (which would likely affect the company for several years) if the majority of their workers find new employment quickly. But to do so, employees must be given the required tools to engage in an effective job search so that they will have the best opportunity possible of landing a new job quickly.
Adverse Social Media
Today, employees have numerous opportunities available for taking out their frustration and anger with a company that does not treat them well in the termination process. They can post negative reviews about the company’s products or services. They can go public on blogs or social media about the way they were treated. These posts can spread like wildfire through social media, and once spread, there is little that a company or organization can do to prevent or minimize adverse publicity.
Compounding matters, search engines such as Google index this information. When an Internet search is done for a company, in addition to the company website showing up in the search results, often review websites and blog postings are also featured. As a result, negative information can remain accessible long after a termination event has occurred.
Litigation & Retaliatory Lawsuits
As Human Resources and executive leadership well know, the cost of litigation is high. Even when insurance is available, premiums will likely increase. Legal expenses are costly, and the time and distraction required by executives is another significant cost. The reality of wrongful termination lawsuits is that the moment a suit is filed, the company or organization has already lost – the only question is how much it will lose.
In a Reduction in Force, if even one lawsuit can be prevented through effective outplacement services and showing that the company cares, the entire cost of a program in most cases is usually cost-justified. Minimizing this risk is thus usually well worth any added expense.
Low Morale Among Remaining Workers
Most workers understand that layoffs are sometimes necessary. What workers expect is that if a workforce reduction is required, they will be treated fairly by the company, in part in recognition for their dedicated service. They want the company to be as dedicated to helping them move forward in their career as they have been in helping the company achieve success.
It’s important to recognize that current workers will continue to speak and interact with workers who are being terminated. Ideally, terminated workers will have positive comments about the company and the outplacement services that are being provided so that they feel that they are being treated fairly.
When this is not the case, remaining workers can see the writing on the wall as to how they will be treated if they are terminated. If treatment is not good, they may view layoffs as not only a sign about the company’s financial position, but also that the company does not care/cannot afford to treat people well. A workforce reduction then can cause remaining employees to consider whether it is worth the risk of staying with the company if one day they too may simply be shown the door without any outplacement assistance.
We Help Companies and Organizations Take Action to Help Minimize Adverse Results
While there can be no guarantee that adverse consequences will not arise in a workforce reduction, actively helping employees transition to a new job, treating them with respect and dignity, and showing true caring and compassion will usually help minimize the risk associated with potential adverse consequences. Employees will likely have a much better attitude about the work reduction than if they were simply led to the door and told to leave.
Through effective outplacement services, we help accelerate the job search process for workers affected by a reduction in force. Call us to learn more about our services.