Up in the Air with Outplacement Outsourcing

The Oscar nominated movie “Up in the Air”, with George Clooney as a high-end outplacement counselor, is a movie worth seeing. I certainly saw the cultural relevance in these days of extensive downsizing, but as a movie it left me, well, a bit up in the air.

Outplacement is a $4 billion market, and participant services typically include an assigned counselor, resume critiques, a variety of courses and workshops, self-assessment tools, access to job search resources and some level of one-on-one coaching. Actual job search assistance is usually not provided in basic packages. In major cities outplacement firms may still offer office space for classes, in-person coaching and even workspace and clerical assistance. Onsite services are also available for added fees. Although some companies do bring in outsiders – as is key to the movie – in my experience most companies have their own managers notify impacted employees and then route them to outplacement services.

I helped manage outplacement services when I was with AT&T and our in-house program transitioned to an outsourced service. We originally had several locations that included workspaces with phones and computers for job-seekers, classrooms, a resource library, onsite counselors, and group sessions for networking and peer support. And there was a time, not so long ago, when that level of support was needed. Now most people have Internet access and the amount of free online job search resources is astounding. In a Net savvy world, outsourcing needs to evolve to keep pace with changing needs.

Outplacements services have been migrating to the Web to reduce costs and allow more employers to continue to offer three to six months of support services for employees leaving under severance programs. A June 2009 study by the Institute for Corporate Productivity and the American Management Association showed that employers spent an average of $5,000 per participant, with a range from $7,518 for executives to $1,472 for hourly employees.

With unemployment still around 10 percent, there will be continued strong demand for effective and affordable outplacement services. And indeed outsourcing revenues have increased, with Right Management, a unit of Manpower Inc., up by 36 percent and Lee Hecht Harrison had up to a 57 percent increase in a recent quarter. Jumping in, ACS has just added an offering called ACS Transition Services – Powered by RiseSmart, to provide outplacement services.

The question is whether today’s outplacement services leave participants up in the air. Some participants complain about simplistic canned workshops, obvious advice and services that have not kept pace with the times. Others question whether the services are really more for assuaging employer guilt and avoiding lawsuits than for increasing and speeding placements for laid-off employees.  While there may well be room to improve, I personally saw how helpful outplacement services can be on an individual basis in terms of providing focus, structure and support during an uncertain time. We had many success stories at AT&T, both in seeing people refocus and find their way forward, and with those who found new jobs.

Realistically, no outplacement service can guarantee participants will quickly find a position equivalent to the one just lost, but there should be data that shows the services are effective and valued by participants to be worth any price point.

HRO providers that offer employers a cost effective outplacement service with high user satisfaction and evidence of job placement effectiveness will continue to find high demand and growth opportunities – and they won’t leave participants up in the air.

Linda Merritt, Research Director, HRO, NelsonHall

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2 Comments on “Up in the Air with Outplacement Outsourcing”

  1. Allen Hoon Says:

    I agree with you in encouraging employers to support surplused employees with outplacement services. Like you, I come from HR roots, and have witnessed the benefits to both the employer and employee.
    Most employees have never had to hunt for a job, and are ill equipped to do so in this market. Outplacement services provide employees with coaching, guidance, resources, tools and focus; and gets them back in the workforce faster.
    Employers reduce their risk of lawsuit (warranted or not), and it is an Employee Relations policy that has positive implications to the ‘survivors’ as well.
    Leave outplacement work to the professionals though. Firms like Right, DBM, and Challenger have spent decades refining their product and methods and developing staff resources with deep skills. Other than formation of strategic alliances with the specialist firms in the field, the current crop of HRO providers will be challenged to offer outplacement services as robust and well developed as those firms who focus on Outplacement only.

  2. The outplacement procedure to find a brand-new occupation consists of eleven subsequent steps one has to face up cautiously in order to acquire a (ideal)proper chance.

    I also learned as a senior consultant that people with a passion and perseverance always find a new job.

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