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Outplacement Becomes a Coveted Benefit in Hard Times

March 1, 2009
Related Topics: Benefit Design and Communication, Featured Article, Compensation
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Bryan Mingle refers to the day that he lost his job as a copy editor at Nielsen Business Media as a "good layoff."

That’s not to say that Mingle, 50, wasn’t sad to be let go. But he is impressed with the way his former employer handled the situation.

On April 8 last year, his manager and an HR manager sat him down and told him that the company had to lay off eight people on the editorial staff due to a corporate restructuring. They explained he would receive a month’s severance pay. Then they did something Mingle didn’t expect. They brought him into a room where an outplacement expert from Lee Hecht Harrison was waiting for him to explain what his next steps could be in finding a new job.

"It really helped me stay positive," Mingle says.

As mass layoffs become more common, Nielsen is just one of the employers offering outplacement services to employees. Once thought of as a benefit for only top executives, today these services are mainstream, says Kevin Gagan, executive vice president in charge of strategy and practice development at Lee Hecht Harrison, a Woodcliff Lake, New Jersey-based provider of outplacement services.

These offerings, which range from online-only services to face-to-face coaching, can cost anywhere from $1,000 to several tens of thousands of dollars per employee. But it appears that many employers believe in the return on investment. A recent Lee Hecht Harrison study of 1,000 HR executives found that the top reason their companies use outplacement is to maintain positive relationships with employees.

There is a good business case behind this treatment of laid-off employees, says Tom Waldron, executive vice president of HR and brand at ING Americas, which laid off 750 employees in January.

"This is our brand," he says. "We believe these people will be our customers and that many of them will come back to work for us."

ING Americas offers all laid-off employees outplacement services through Right Management.

Offering outplacement is also key to keeping an organization’s remaining employees productive, experts say.

"It’s very hard to rally the troops when you have abused people who have been devoted to you," says Kate Wendleton, president of the Five O’Clock Club, a New York-based career coaching and outplacement provider. Wendleton says the number of employers that she helps with outplacement has doubled over the past year as the economy has worsened.

At the very least, offering outplacement services can help employers prevent potential wrongful termination lawsuits, experts say. "By offering employees the ability to get back on their feet, employers can minimize the adverse legal aspects of having to do a reduction in force," Gagan says.

Providing career transition services can also help with the employer’s brand when it comes to recruiting new talent, says Rich Doherty, vice president, client services at Right Management. "Even if employers are downsizing, they still need to attract people, and this shows they are a good employer."

A range of services
Typically, employers that offer outplacement have staff members from outplacement firms standing by when layoffs are being conducted. A few weeks before it did layoffs in January, ING Americas, which has 35,000 employees, told its workforce that a round of layoffs was coming. To help prepare managers, the company launched a webcast that offered tips on how to handle the layoffs, Waldron says.

"You never pat yourself on the back for doing a downsizing well, but I received so many e-mails from managers that said as unfortunate as the situation was, they felt trained and prepared."

In January, when ING let people go, staffers from Right Management were on site to meet with displaced workers, go over their severance arrangements and talk to them about the next steps. Laid-off employees have access to Web tools, one-on-one counseling, career assessments, résumé preparation and training in job searching and interviewing.

After being laid off from Nielsen, Mingle got similar support from Lee Hecht Harrison. He signed up for the service in June.

Mingle’s package covered three months of services, during which he got access to workshops and a job coach. "The Lee Hecht Harrison representative helped me position myself better," he says. He also had access to the company’s proprietary job database and still gets e-mails about job opportunities.

And although the three-month package has run out, Mingle still participates in a weekly job-search work team, where a group of laid-off employees meet to network, discuss interviews they have been on and provide moral support.

"The biggest benefit of the group is helping instill a positive attitude and perseverance," he says. The group, which meets in a Lee Hecht office in Irvine, California, near where Mingle lives, has accountability sheets for members to show how many hours a week they are spending on finding a job.

"It’s such a great benefit, and I haven’t paid a thing for it," Mingle says.

Lee Hecht’s Gagan says that the idea of the job-search work team is to help people approach the job search as though they were managing a project. "The more you work with a group of people, the more you are accountable to that group of people," he says.

Also as a result of the recession, career transition services for executives have begun to take a new form. Many employers that signed up for executive coaching and promised outplacement services for these employees (should that be necessary) now find themselves in a position where they don’t want to lay off executives, but they’ve eliminated the positions for which they were hired.

In these cases, some organizations are finding other roles for the executives to take on until the economy picks up, says William J. Morin, chairman and CEO of WJM Associates, a New York organizational consulting firm. For example, Morin says, he is currently working with one executive who has been demoted from a top marketing position to a staff role.

"But she hasn’t done anything wrong," he says. "The whole company is suffering and they want to hang on to her."

In these situations, WJM works with the executives to understand the situation and keep morale up, as well as urging them to continue developing their skills. "The business case is realizing that talent isn’t something you buy today and just get rid of it and then come back to it again two years from now," he says. "It’s just not that easy."

While employers might sincerely want their laid-off staffers to find jobs via the outplacement services they provide, many providers say that it’s getting harder and harder for those would-be workers to find positions in a market that sees almost daily announcements of layoffs in the thousands.

Mingle, for example, has now been unemployed for nine months. But he has had seven job interviews, and he stays in positive spirits. To this day, he has only nice things to say about Nielsen, his former employer.

"Even though they laid me off, I feel lucky to have had this benefit," he says.

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