Outplacement Found Its Place During Downturn

The economic downturn, which many experts now think is on the upswing, gave rise to an increasing number of companies taking an interest in outplacement.

Outplacement has become a sure-fire way (no pun intended) for employers and employees alike to have the best possible experience during the downsizing process. It not only helps displaced employees amp up their skills and find their next job, but it also helps employers maintain a good image of their company and its practices.

Last March, Lee Hecht Harrison released the "Severance & Separation Practices Benchmark Study," a report that found employers were paying increased attention to outplacement and severance for departing employees. The report was based on a study of 1,072 HR executives.

"There is a strong correlation between how a company treats departing employees and its ability to attract and retain top talent now and in the future, particularly when the economy rebounds," Barbara Barra, executive vice president of operations for LHH, said. "Providing a socially responsible and compassionate career transition service is more than the right thing to do, it's the smart thing to do."

The study found that 65 percent of companies maintained their severance policies and 19 percent made their policies "more generous." In addition, 53 percent of companies offered outplacement services to all officers and senior executives, while 55 percent offered outplacement to all exempt employees.

The report further noted that 28 percent of employers had compared the cost of terminating employees with the cost of employing them somewhere else in the firm, and ultimately chose to redeploy them. Companies also are increasingly using redeployment in order to improve retention, keep highly-trained employees and reduce turnover costs.

When asked about their "philosophy" regarding outplacement 82 percent of employers said assistance should be provided through technology and in-person resources, while 17 percent said in-person meetings, seminars and coaching should be used, and only 1 percent said they would only use technology.

Another interesting point - only 54 percent of employers offered workers older than 55 the chance to reduce their work hours. And only 31 percent of companies had "change of control" policies detailing advance agreements with employees about what compensation and benefits would be in the event of a merger or other such situation.