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Outplacement Myths

Friday, February 1, 2008 - 11:06

The outplacement industry has developed since the wave of downsizings in the '80s and '90s. Edwin Trevor-Roberts seeks to dispel a few myths about the practice.

The outplacement industry was born in the 1980s as a response to the downsizing wave that swept through the Australian economy. It is estimated that two-thirds of retrenched employees in today's labour market are provided with some form of career transition or outplacement assistance. Yet many managers do not fully understand what outplacement is, how it works, or how to measure their return on investment (ROI). Here are explorations of five of the most common outplacement myths.

Myth #1: Outplacement is about finding a person a job

Losing one's job is one of the top five most stressful events that can occur in a person's life. It affects us personally, it challenges our sense of self, our identity. Yet everyone reacts differently. For some it is a time of difficulty, for others an opportunity for long-overdue change. Regardless, it is a personal experience and it is this internal change that is the most profound part of a successful transition from one job to the next. The actual outcome, such as a new job or starting a business, is simply the end result of a successful transition process. The outcome, however, is the most visible part of a career transition and so receives the most attention.

Managers who offer outplacement support to their staff tend to focus on the outcome of people finding a job. This is understandable as arguably the least enjoyable task of managing is telling someone that there is no longer a job for them. Our natural instinct is to want to provide them with another job to fill the gap. This perspective, while admirable, oversimplifies the complex effect that losing a job has on an individual. It is not simply a matter of finding another job. In many regards, that is the easy part. The difficulty is adapting one's identity to assimilate and cope with the job loss and author a future career chapter. This is the most critical component of an outplacement program.

The next most important part of the program for an individual is identifying their preferred career direction. This involves career exploration and using a decision-making framework within which to integrate the complexity of career and life planning.

Finally comes the actual job search itself. Creating a job-search campaign flows from the first two stages. By this stage the person knows the direction in which they want to head in their career, and how this is a continuation of their experience to date. The search, whether it be for a full-time job, a portfolio career, starting a business or any of the myriad options, is intrinsically motivational and is ultimately successful.

Myth #2: Outplacement has not evolved since the 1980s

When outplacement was born in the late 1980s, the sluggish labour market meant that the major concern was finding people new jobs. This became the central focus of outplacement programs. From a broader perspective, the career field itself was still immersed in the "person/job" fit paradigm that dominated theory and practice, i.e., a person's career was a logical connection between their skills and interests and the opportunities available in the market. The outplacement industry followed suit.

The career field, however, has changed significantly over the past two decades. A rewarding career in today's society is one that has been constructed by a person to reflect a sense of personal meaning and satisfaction. A successful career also involves capitalising on organisational structures and changes. Outplacement must help individuals construct a career that is intrinsically motivating. This involves providing a holistic framework within which people can make decisions about what a career means for them, and translate this into opportunities within the market. Assisting people to design a life structure is the greatest value of outplacement support.

Myth #3: Recruitment and outplacement go hand in hand

Recruitment and outplacement are based on diametrically opposing philosophies and market structures. As mentioned previously, outplacement in today's environment is centrally concerned with assisting people adjust to the change in their employment situation, deal with the complexity of career decisions, and translate their preferred career direction into an appropriate position. At the core, career consultants are person centred. Their concern first and foremost is about the individual and their successful transition through their change.

The recruitment industry, on the other hand, is based on finding the best possible person for a particular role. Their focus is on solving their client's "problem", that is, getting the right person for a job vacancy. This is an outcome-centred perspective. Recruitment companies play a critical role in the economy, yet for those that also offer outplacement they do so with a very different orientation. Their focus is on getting a person a job, a perspective that flows naturally from recruiting. As mentioned previously, such a focus on the destination misses the journey that people go through during redundancy. Assisting people through this journey requires a different set of organisational capabilities than those usually attributable to recruitment companies. In fact, one of the greatest challenges of career consultants is to slow down individuals from starting their job search before they have clearly identified their preferred career direction and completed all the necessary preparation.

Myth #4: Outplacement is an expensive expense

It is difficult to calculate the ROI on outplacement. This is because outplacement is a complex service that involves the interaction of many different stakeholders with benefits that are often intangible. Nonetheless, consider the following effects:

  • Employee productivity and morale. Providing outplacement support sends a strong message to remaining employees. Most people realise that difficult management decisions have to be made, which may result in positions being made redundant.
    The common theme from speaking with thousands of people who have gone through being retrenched is that their major issue with the company is not what happened, but how it was done. Providing support sends a strong message to existing staff that the organisation does care about its people. This helps to reduce future turnover, the "am I next?" syndrome and helps to maintain people's commitment and productivity.
  • War for talent. Being an employer of choice is the goal of many organisations as they attempt to build a brand to attract new staff and retain existing staff. The way redundancies are handled sends a strong message to the marketplace that this is, or is not, a great place to work.
  • Customer goodwill. The business and general media is replete with negative stories of organisations who have poorly handled a situation or not looked after their staff. Large-scale redundancies are often the target as they have such a significant impact on people's lives. Such negative press hurts an organisation's reputation in the eyes of their customers with subsequent flow-on effects to sales. A case in point was the decision by Radioshack in the US to make over 400 staff redundant by email. The negative publicity was venomous.
  • Legal costs. Research done by the University of New South Wales found that the average cost of dismissal ranged from 10.3 per cent–35.3 per cent of annual wage cost depending on whether the dismissal was contested or not. Providing outplacement support has been found to reduce the incidence of legal action.

With more than 60 per cent of Australian organisations providing outplacement support, the question is not whether outplacement is an expense, but if an organisation can afford not to provide it?

Myth #5: Outplacement support is only needed in a slow economy

As discussed above, outplacement is about helping people adapt to their changed circumstances, identify their preferred career direction and assisting them to find an appropriate role. Support is needed through this process regardless of the economic conditions.

The only difference is the availability of jobs and the time required to find a new job. In a tight labour market such as what Australia is experiencing at present, employers are struggling to find enough people. From the individual's perspective, however, they still have to identify what work they want to do and then find an organisation with a suitable opening. A tight labour market also provides unique challenges for individuals. The issue is not "will I find a job?" but "which job will I take?". Guiding people through this decision-making process so that they make as effective a decision as possible, rather than simply choosing the first offer that comes along, becomes a critical part of effective career counselling.

Effective outplacement programs require highly qualified career consultants experienced in a range of techniques and approaches drawn from counselling, coaching and psychology, to name a few. They need a broad range of experiences from which to draw on to assist people. Above all they need a genuine desire to want to help people navigate the complexity of life and career planning.