Outplacement is a professional consulting service that helps organizations plan and implement individual terminations or reductions in their workforces so as to minimize disruptions and avoid legal liability, and counsels terminated employees in order to minimize the trauma of separation while orienting them towards seeking alternative employment or new careers.
The economic downturn of the 1980s, which continues in the 1990s, has been characterized by a virtual pandemic of job terminations reflecting the closing down of obsolescent or unprofitable units, plants and businesses, the elimination of redundancies created by mergers, takeovers, consolidations and reorganizations, and the trimming of staff to reduce operating costs and produce a “lean and mean” workforce. Although less striking than in private industry thanks to the protection of civil service regulations and political pressures, the same phenomenon has also been seen in government organizations struggling to cope with budget deficits and a philosophy that less government is desirable.
For the terminated employees, job loss is a potent stressor and source of trauma, especially when the manner of dismissal is sudden and brutal. It generates anger, anxiety and depression and may cause decompensation in persons with marginal adjustment to chronic mental illness. Rarely, the anger may express itself in sabotage or violence aimed at the supervisors and managers responsible for the termination. Sometimes, the violence is directed at spouses and family members.
The trauma of job loss has also been associated with physical ailments ranging from headaches, gastrointestinal disturbances and other functional complaints to stress-related disorders such as heart attacks, bleeding peptic ulcers and colitis.
In addition to the financial impact of loss of earnings and, in the United States, loss of employer-sponsored health insurance, job loss also affects the health and well-being of the families of the terminated employees.
Employees who are not terminated are also affected. Despite employers’ reassurances, there often is concern over the possibility of additional layoffs (threatened job loss has been found to be an even more potent stressor than actual loss of the job). In addition, there is the stress of adjusting to changes in work load and job content as relationships with co-workers are reshuffled. “Downsizing”, or reduction in the size of a workforce, may also be traumatic to the employer. It may take significant time and effort to smooth out the resultant organizational disruptions and achieve the desired productive efficiency. Valuable employees not scheduled for termination may leave for other, ostensibly more secure jobs and better-organized firms. There is also the potential of legal liability stemming from discharged employees’ allegations of breach of contract or unlawful discrimination.
Outplacement—A Preventive Approach
Outplacement is a professional service offered to prevent, or at least minimize, the trauma of staff reduction for terminated employees, those who remain and the employer.
Not all discharged employees require assistance. For some, the termination precipitates an opportunity to seek new work that might provide welcome relief from a job that had become stultifying and offered little hope of advancement. For most, however, professional counselling in working through the almost inevitable disappointment and anger of dismissed employees and help in finding new jobs can facilitate the restoration of their sense of self-worth and their well-being. Even those who accept the lure of the “golden handshake” (a package of enhanced severance and retirement benefits) and leave voluntarily may benefit from help in making the necessary readjustments.
It is generally agreed that outplacement services are most inexpensively provided by in-house staff. However, even a large organization with a competent and well-functioning staff may not have had much experience with the sensitive work of downsizing and may be too busy planning the restructuring of the organization following the exodus to attend to the niceties that may be involved. Even hardened executives often find it difficult to deal with their erstwhile co-workers. Furthermore, the departing employees are more likely to give credibility to advice from a “neutral” resource.
Accordingly, the vast majority of organizations find it expedient to contract with an outplacement consultant or consulting firm. This neutrality is reinforced by having all possible outplacement contacts located offsite in separate quarters occupied even temporarily by the consultant(s).
The outplacement process for terminated employees needs to be individualized depending on their attitudes, capabilities and circumstances, and the nature of the job market locally or in other regions. For non-exempt production workers and first-line supervisors, it involves an inventory of the worker’s skills and, where there is a market for them, assistance in placement. Where no suitable jobs exist, it involves assessment of the potential for retraining, referral for retraining, and assistance in marketing the new skills. An unfortunate complication that is difficult to overcome arises when the pay scales for the available new jobs do not measure up to the earnings of the former employment.
For employees in managerial and “creative” positions, the process generally involves a number of phases that are frequently overlapping. These phases are considered under the following heads.
Leaving the past employer.
The object is to help the candidate through the stages of reaction, understanding and acceptance of his or her predicament. Occasionally, this may require the intervention of a mental health professional.
This usually involves a reevaluation of the termination event. To earn the candidate’s confidence and assist in establishing a desirable rapport, the consultant generally reviews the circumstances of the termination and makes certain that the candidate understands them and, furthermore, has received all of the monetary and other benefits to which he or she may be entitled.
This phase concludes when the candidate is able to deal constructively with the immediate problems and responsibilities and is ready to start preparing for the future with a positive attitude. Ideally, some measure of reconciliation has been established with the past employer and the candidate is willing to accept whatever support may be offered. Such support may include temporary use of an office with a business address and telephone, supplemented by the services of a secretary who can provide typing and photocopying services, take messages, confirm appointments, etc. Most candidates function more effectively from an business-like office environment than from their own homes. Also, the consultant helps formulate a mutually satisfactory reason for the termination and arrange a mutually acceptable response to requests for references from potential employers.
Preparation for new employment.
This phase is intended to provide the focus and structure for positive thinking and action. It involves a start of the recovery of self-confidence (which continues throughout the process) by building a personal data base of the candidate’s skills, abilities, knowledge and experience, and learning to communicate it in clear, functional terms. Simultaneously, the candidate begins to identify and confirm suitable job objectives and to consider the nature of the jobs for which his or her background might be particularly suitable. Through it all, the candidate acquires the knack of accumulating and organizing information that will highlight the range and depth of his or her experience and level of competence.
Here, the candidate learns to develop a flexible tool that will present his or her objectives, qualifications, and background, arouse the interest of potential employers, help obtain interviews, and serve as an aid during job interviews. Rather than being restricted to a fixed format, the résumé is varied to “package” skills and experiences to make them most attractive for particular job opportunities.
Assessing job opportunities.
The consultant guides the candidate to an assessment of the availability of potential jobs that might be suitable. This includes a survey of different industries, the job market in different localities, opportunities for growth and advancement, and likely earning potential. Experience indicates that about 80% of job opportunities are “hidden,” that is, they are not readily apparent on the basis of industry designation or job title. Where appropriate, the assessment also includes an appraisal of the potential of self-employment.
This involves identifying and exploring existing and potential opportunities through direct approaches to potential employers and developing and making use of contacts and intermediaries. The campaign entails obtaining interviews with the “right” people on a right basis, and using letters both to obtain interviews and as a follow-up to interviews.
The consultant will, as part of enhancing the candidate’s job-hunting skills, improve his or her writing and interview techniques. Practice in letter writing is aimed at polishing a communication skill that is uniquely helpful in defining job opportunities, in identifying the “right” people and developing contacts with them, obtaining interviews with them and in following up on interviews. The candidate is further trained by interview coaching, which involves role playing and critiquing videotapes of practice interviews in order to maximize the effectiveness with which his or her personality, experience and desires are presented. The candidate’s chances of coming away from an interview, with, at least, an appointment for the next interview, if not an actual job offer, are by this means enhanced.
The consultant will help candidates overcome their dislike or even fear of discussing compensation in negotiating a potential position so that they can obtain the best compensation package possible under the existing circumstances, avoiding the possibility of over-selling or under-selling themselves or antagonizing the interviewer.
Within the limits of the consulting contract, regular contact with the candidate is maintained until a new position is maintained. This involves gathering and organizing information to track how the campaign is progressing and to ensure optimal use of time and effort. It will help the candidate to avoid errors of omission and provide a signal to correct errors of commission.
When a new position is obtained, the candidate notifies the consultant and the old employer as well as other prospective employers with whom he or she may have been negotiating.
Again, within the limits of the contract, the consultant maintains contact to assist the candidate’s adjustment to the new position to aid in overcoming any adverse factors and to encourage continuing career growth and development. Finally, at the close of the programme, the consultant provides the employer with an aggregate report of the results (personal and/or sensitive information is usually held confidential).
It is rare for the outplacement consultant to be involved in designating specifically which employees are to be separated and which will remain — that is a decision usually made by the organization’s top management, often in consultation with department heads and line supervisors and in the light of the structure envisioned for the revised organization. The consultant, however, does provide guidance on the planning, timing and staging of the downsizing process and on the communications with both those who will leave and those who will remain. Since the “grapevine” (i.e., rumors circulating in the workforce) is usually active, it is imperative that these communications be timely, complete and accurate. Proper communications will also help address potential allegations of discrimination. The consultant also often assists with public relations communications to the industry, customers and the community.
The extent of downsizing during the last decade, at least in the United States, has given impetus to development of a veritable industry of outplacement consultants and firms. A number of search firms devoted to identifying candidates for job vacancies have taken up outplacement as a side-line. A variety of semiprofessionals, including former personnel directors, have become outplacement counsellors.
Until recently, there was no formally adopted code of practice and ethical standards. However, in 1992, the International Association of Outplacement Professionals (IAOP) sponsored the creation of the Outplacement Institute, membership in which requires meeting a set of criteria based on educational background and personal experience, evidence of continuing participation in programs of personal and professional development, and a commitment to uphold and observe the published IAOP Standards for Ethical Practice.
Reduction in the size of a workforce is, at best, a trying experience for the employees being terminated or forced into retirement, and for those remaining and for the organization as a whole. It is invariably traumatic. Outplacement is a professional consulting service designed to prevent or minimize the potential adverse effects and promote the health and well-being of those involved.