10 Reasons why Outplacement is Essential during the Credit Crunch

The Credit Crunch means that predictions are gloomy for the year ahead.  Organisations are re-structuring, cutting staff numbers and reducing their recruitment activity.  While job uncertainty is at the highest it has been for some time, the job market is also becoming tougher and more competitive.
Managing staff exits is perhaps one of the most challenging activities faced by HR Managers and the line management team.  Handled carefully, an organisation and its staff can emerge from redundancy programmes in good shape.  Handled badly, it can simply be a PR relations disaster with lasting ramifications.  If you are considering outplacement for your staff, or are trying to persuade your organisation to provide it for you, then here are 10 good reasons why it can be a good idea.

1.    Time-efficiency

Staffs who have been made redundant usually want support in making their career transition.  HR and line managers may want to help but simply have other time priorities.  This leaves both sides dissatisfied and stressed.  Outplacement plugs the gap.  It frees up HR and Managers to focus on the business while the individuals can access the help they need.

2.    Staff Retention and Motivation

The decision on who stays and who goes may have been made.   However, change is unsettling for everyone.  Individuals, who the organisation wants to stay, can easily be tempted to look for another job, especially if they feel that the leavers have been poorly treated. Offering outplacement services is a visible sign to leavers and non-leavers alike that the organisation is trying to do its best to be supportive to its staff at a difficult time.  This reassurance can help engender trust with the staff who are remaining and keep them psychologically engaged and motivated to work for the organisation.

3.    PR

Individuals disaffected by changes can make things difficult including bad-mouthing individuals or the company in general, even sabotage or aggression.  .   It can also lose you customers.  How would you feel about doing business with a company where its current or ex-staff are critical of how it treats its people?

4.     Looking after the Decision-Makers

Staff exits can have an emotional toll on those responsible for making and implementing the decisions on who goes and who stays.  Outplacement provision can go some way to assuaging the guilt and accompanying stress that can be felt by the decision-makers.

5.    Managing Anxiety

Outplacement support provides a safe place for individuals to express and manage their anxieties. It helps them focus on how they can channel their energies into building their future, rather than destroying the past.  Without this safe place, their anxiety can seriously weigh down themselves and others.

6.    Future Recruitment

It is highly likely that you will be recruiting again before long.  Your reputation as an employer will go before you.  Treat people well and they will be happy to come back, hopefully with more skills and experience than when they left.  Treat them not so well and they are likely to warn off everyone they know.  This could be extremely problematic if you are looking to recruit skills in high demand or competing with other employers in the same area.

7.    Legal Costs

When people feel that they have been treated fairly on exit, there is far less likely to be legal proceedings.  This perception is all important.  Even where process has been duly followed, an aggrieved employee can take up considerable time, energy and money in legal costs because of this perception.  It's much easier for an objective, third party to help an angry employee move on to the future than for the company to do so.  Outplacement can help them manage a difficult personal transition and reduce the “fight” reflex.
 
8.    Costs

Expenditure in outplacement is recouped by savings in legal costs and the time spent managing any conflicts.  Management time in supporting the leavers is saved.  The productivity and motivation of staff working their notice and those who are remaining with the organisation, are maintained at required levels. Whereas a badly handled exit programme can lose potential customers, affect business relationships and damage the organisational brand.

9.    Ethically

Where staff have been with you for some time, they are unlikely to be up to speed with the job market and how it works.  They have mortgages, bills to pay etc and many will need to earn as soon as possible.  Outplacement can make sure that they have the skills, knowledge and resources to find their next role quickly and so minimise financial hardship.  If you were in the situation of losing your job, isn’t this how you would want to be treated?
 
10.    Statistics

When organisations were asked about outplacement in a 2006 Reed Consulting Survey, the response was:
78% felt it improved the organisation’s reputation

87% believed it eased the pressure on managers

65% believed it improved staff morale, motivation and productivity

Hopefully the Credit Crunch will be a temporary blip.  However, for those who lose their job during this time, the job market will be a tough place to be. 

When the emphasis is on cost-cutting, smart organisations realise that a relatively small investment in outplacement, makes sound business sense.