Here’s Why Your Company Should Invest in Outplacement Services


No one likes layoffs — not the HR staff and managers tasked with breaking the news, and certainly not the employees being terminated. It may not be possible to completely take the sting out of laying someone off — it’s a huge loss of not just financial stability, but also social structure and a sense of purpose and stability. For lots of people, a job or career is an important part of their identity.

So, there probably isn’t a severance package large enough to make up for the loss of a job. But, regardless, you should make sure to give outplacement assistance — or at least offer the option — to outgoing employees, along with severance pay, COBRA health insurance, and so forth. It can help them find new jobs faster, which means they’re focused on moving forward and taking the next step, not on badmouthing the company. Outplacement services help terminated employees feel respected and valued, and it can help keep morale up among those who escaped the downsizing.

Get Former Employees into New Jobs and Off of Unemployment

Offering outplacement assistance to terminated employees can minimize the amount of time they need to spend on unemployment, which can save your company money. You’re also less likely to face wrongful termination suits, because employees who receive outplacement assistance tend to be more satisfied with their experience at their former company — just getting outplacement assistance can help them feel better about getting fired, enough that they’re not inclined to sue.

And they might not have time to sue, anyway — they’ll be focused on finding that next job, with help from the career counselor. Employees often need a little support to get back on the job market and land a new position after a layoff, and not just because their confidence has taken a hit (although that can be a factor). Many of the employees you intend to let go may have been with the company for years — some especially longtime employees may not even know how finding a new job works these days.

Outplacement assistance can help terminated employees understand that pounding the pavement and shaking hands isn’t the best strategy anymore. Employees can get help brushing up their resumes, flexing their interview skills, fleshing out their online job profiles, and drafting their cover letters. They can even get help identifying new skills to learn and accessing the resources they need to learn them. Employees can even get networking advice, counseling to navigate a career change, or insights that can help them take a step up after they leave your company.

Save Money — And Your Reputation

It might seem counterintuitive, but spending the extra money to make outplacement services a part of your severance packages can actually save your company money. You’ll be paying fewer unemployment claims, for one, because terminated employees should be moving quickly into new positions. And, as mentioned above, you’ll save money on wrongful termination lawsuits.

But perhaps the biggest benefit is to your company reputation. Layoffs can really put your brand name through the wringer, especially if you have to lay off a lot of people at once. Sometimes, you just can’t help it — no matter how carefully a company is managed, hard times happen. But that doesn’t mean you want to downsize or that your managers and HR staff enjoy laying people off.

Quite the opposite. It can be just as hard to fire someone as it is to be fired. Employees can have all kinds of emotional reactions when let go, and the managers doing the firing can feel emotional about it, too. At least, when outplacement assistance is on the table, the employees being terminated have something to latch onto — a plan, as it were. The employees doing the firing can also feel better, knowing that their colleague has access to resources that can help. And those who remain behind will feel better about the whole enterprise, too — maybe their jobs are in jeopardy and maybe not, but they’ll at least see that the company is trying to smooth the transition and they’ll feel more secure knowing that outplacement services will be there for them, should they be needed.

Investing in outplacement services for your newly terminated employees might cost your company some extra money in severance, but it could save you a ton in the long run. You’ll protect your reputation even in the midst of layoffs, keep your remaining employees happy, and maintain morale through the difficult transition that is downsizing — and that’s worth every penny.


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