Outplacement Resources and Research

What is outplacement?

The term outplacement was coined more than 30 years ago by the founder of a Chicago based career consultancy. With the increased rates of downsizing, rightsizing, redundancies and layoffs, during the 1980s and 1990s, businesses increasingly found a need for some form of assistance in reducing the trauma of redundancy for both departing employees and those who remain. Indeed, research shows that losing one’s job is one of the most stressful experiences a person can face other than death and divorce.

Wikipedia says Outplacement is the support service provided by responsible organisations keen to support individuals who are exiting the business (voluntarily or involuntarily) – to help former employees transition to new jobs and help them re-orient themselves in the job market. An outplacement consulting firm usually provides the outplacement services which are paid for by the former employer and are achieved usually through practical advice, training materials and workshops. Some companies may offer psychological support.

Outplacement is either delivered through individual one-on-one sessions or in a group format. Topics include career guidance, job search skills, targeting the job market, resume writing, interview preparation, developing networks, and negotiation.

Consultants support individuals seeking a new job, and also those looking to start a new business, retire, or structure a portfolio of activities. Programs have time limits, ranging from a few weeks to more extended periods, such as 12 months and are offered at all levels of the organisation.

Outplacement provides former employees structure and guidance towards their new career option, and preserves the morale of those who remain in the Company who see that colleagues are given the necessary support when they leave the company.

What you must do

  1. Planning

Start to think about who you need to consult with, advise and involve – inside and outside your organisation. Once you know your timescales and how you want to handle any retrenchments you can plan for involving external people (such as lawyers and outplacement consultants) and internal people (such as payroll, HR and line managers).

Planning what changes you need to make and establishing the business case for these changes is essential. There are many activities a business can consider before they make redundancies to potentially mitigate the need (for example, finding other suitable internal roles for employees).

If, in the end, redundancies are still required it is critical to have a fair process to manage who is selected. Ask an Industrial Relations Specialist to work with you step by step throughout the planning process if you haven’t done this before or if you need some backup. Contact Outplacement Adelaide if you would like a local contact for an Industrial Relations specialist who understands redundancies.

See the Link at “Useful links and Events” to the Fair Work Ombudsman’s website for useful information that you can download – such as a Notice and Redundancy Calculator and the Small Business Fair Dismissal Code and Checklist

  1. Talk to Centrelink / the Department of Human Services if you plan to dismiss 15 or more employees.

Centrelink says “You need to give us written notice if you plan to dismiss 15 or more of your employees. The Fair Work Act 2009 requires you to notify us as soon as possible after making the decision and before dismissing any employees.”

Even if you plan to dismiss less than 15 employees it can be helpful to contact Centrelink and ask them if they will provide information or a speaker for your employees, so they know how redundancy payments will affect their ability to claim Centrelink benefits. This is something many people who receive larger payouts are unaware of so this can be a real help. Centrelink can also clarify when people should contact Centrelink, what they need to provide to Centrelink and how soon they can claim any Centrelink benefit.

To check what you need to provide to Centrelink and to obtain the correct form to give notice to Centrelink, click on the Centrelink link in the Useful Links and Events section of this website. This will let you download the most current form and let you know how to contact the right section of Centrelink.

  1. Check this is a genuine redundancy.

Start by looking at the Fair Work Ombudsman’s website (see the link in “Useful Links and Events”). You will find information there to help you determine if this is a genuine redundancy. It is always worth talking through your plans with an Industrial Relations specialist or/and an Employment Lawyer before you make any final decisions, especially if you haven’t planned and managed redundancies before. If you don’t know who to ask call Outplacement Adelaide for some local options.

  1. Consultation

All awards and registered agreements have a consultation process for when there are major changes to the workplace, such as redundancies. When to start consultation, how long it should be, and what exact information to include, are all questions an Industrial Relations specialist can help you with.

The consultation process sets out the things an employer needs to do when they decide to make changes to the business that are likely to result in redundancies. This has to be done as soon as possible after the decision has been made to make these changes.

Consultation requirements include:

  • notifying the employees who may be affected by the proposed changes
  • providing the employees with information about these changes and their expected effects
  • discussing steps taken to avoid and minimise negative effects on the employees
  • considering employees ideas or suggestions about the changes.

Make sure you read your awards very carefully to ensure you consult appropriately.

Useful redundancy links and local redundancy seminars and events

Please contact an employment lawyer if you have any legal questions. The authors of this website are not legal experts. Nothing in this website constitutes legal advice.

Employers considering retrenching workers will want to be familiar with the Fair Work Act 2009 which lets employers know their obligations. For example, it requires employers, planning to retrench 15 or more workers, to notify Centrelink in writing as soon as possible after making a redundancy decision and before dismissing any employees.

For redundancy information for employers from Centrelink / the Department of Human Services, click here. This page will let you know your employer obligations with regard to notifying Centrelink about redundancies, it will give you the employer form you need to complete and details of how to contact Centrelink. You can also get information about organising financial information sessions from Centrelink, for your retrenched workers.

Go to the Fair Work Ombudsman’s website for useful legal information on redundancy pay and entitlements. Click here. This page will tell you how much you need to pay retrenched workers; it provides the Notice and Redundancy Pay Calculator for you to download and provides details on when redundancy pay doesn’t need to be paid. You can also check redundancy entitlements for different awards here.

Click here to see information from the Legal Services Commission of SA about redundancy pay and redundancy notice periods under the National Employment Standards (for circumstances where there is no award, contract or agreement which provides for greater entitlements for employees).

Click here for information about redundancy entitlements when a business is sold or goes into receivership.

Did you know the government provides a Fair Entitlements Guarantee for employees of a business that has gone into liquidation? More details can be found here.

If you ever are faced with an unfair dismissal claim, you may have as little as 7 days (e.g. in the Fair Work Commission) in which to respond in writing. It is therefore imperative that you take steps immediately; if you are going to get advice from a lawyer then it’s best to get on the phone or email straight away. If you don’t know a lawyer to call ask The Law Society for recommendations of lawyers who specialise in redundancy cases. You can call them on 8229 0200 or send an online query here.

Local Outplacement and Industrial Relations Help in Adelaide

We will be adding more contact details to this section of the website soon. In the meantime call 8322 8455 if you need to find outplacement, industrial relations help or legal contacts in Adelaide. We can provide some local contacts who can help you prepare for redundancies.

To find out more about local outplacement services, contact HR Development at Work, click here.

If your workforce is affected by the transitioning automotive industry in Adelaide, click here.

Join the Outplacement Adelaide facebook page here.

How effective is outplacement help in helping retrenched workers to find new employment?

See the Research section of this website for links to outplacement research from Australia and across the world.

Redundancy and Outplacement Seminars for Managers and Events for Retrenched Workers.

Send us an email if you would like us to notify you directly of free “Preparing for Redundancy” seminars. These free seminars are for HR Managers, State Managers and Business Managers preparing their organisation for redundancies.

We will also announce Redundancy Seminars for Managers on the Outplacement Adelaide facebook page. Please like the Outplacement Adelaide facebook page to keep up to date.

Redundancy and Outplacement Seminars for Managers cover:

  • Alternatives to redundancy to consider
  • The legal aspects to take into account when planning redundancies
  • Your employer obligations with regard to consulting employees or their representatives
  • Legal case studies
  • The benefits of outplacement support

To stay up to date, please like the Outplacement Adelaide face book page too.

What to look for when choosing an employment lawyer

Remember the best time to consult a lawyer – indisputably – is before a problem even arises. Prevention is better than litigation!

Look for a lawyer you can trust – with expertise in the legal aspects of redundancy. Ideally, you will know a lawyer you can trust from having dealt with them previously. If not, is there a trusted friend or colleague who can recommend a lawyer to you? If you know a lawyer you can trust, even one who does not have expertise to meet your need, ask them if they are in a position to refer you to several lawyers who have expertise in the area (better than picking a name out of the yellow pages at random!).

The Law Society can also help. They will give you names of 3 lawyers who practice in an area of law you specify. You can call them on 8229 0200 or send an online query here.

Always ask about legal fees at an early stage. Most lawyers can quote you an hourly rate; some will even give you a fixed quote for a particular stage of work (e.g. charging a certain amount for filing a Defence to an Unfair Dismissal Claim).

Lawyers are often told, “I want this so watertight that I will never be sued”. Unfortunately that is just not possible. It is all too easy for a claim to be brought against you. All a lawyer can do – and it can be worth a lot – is to advise you and possibly set up documents and procedures so that, if a claim is made against you, the chances of its success are minimal. You cannot eliminate the risk, but you can minimise it.

What to look for when choosing an outplacement provider

Look for an experienced outplacement provider who can provide testimonials from satisfied clients. Your outplacement provider should be tailoring what they offer to match your needs and should discuss with you:

  • Pre-announcement support for you and your managers
  • Onsite, on the day, support for managers delivering the news
  • Onsite, on the day, support for the people directly affected by retrenchment/redundancy
  • Individual programs (they should advise you about an appropriate length of program and should be able to offer something to fit your budget if it’s tight)
  • Group workshops

The best outplacement programs provide ongoing support (as opposed to merely a 4 week or 8 week program), as it is often the case that, when the individual has not been able to find a new job after a number of weeks, that’s when they need the most help. Of course, these programs are more expensive than a 4 week or 8 week program (see the section on our website on outplacement program prices for a guide to the range of prices you can pay).

deally you want to use a company that tracks the re-employment success rate of the people they help, to help evaluate their services.

Selecting an Outplacement Consultant or Provider

What background should I look for in my outplacement consultant?

  • There is no one background or set of qualifications that makes someone a great outplacement consultant. You will find psychologists, recruiters, human resource consultants and management consultants providing outplacement services.
  • The best thing to do is to meet with them and suss out:
    • Are they personable, flexible, experienced and able to provide all the knowledge and support your people need?
    • Ask them how they handle:
      • Psychological distress in retrenched workers.
      • Requests for the consultant to travel to the retrenched workers location for meetings.
      • Retrenched workers who are unfamiliar with computers.
      • Anything else that is important to you and your retrenched workers
  • Ask them who have they worked for in the past and how soon their previous outplacement clients found employment.

Do memberships matter when choosing an outplacement provider? Should I look for a member of a particular organisation, or a particular qualification in my outplacement consultant?

Memberships and qualifications don’t guarantee a successful match to your retrenched workers.

If your outplacement consultant has qualifications in human resources, psychology, or career development – or is a membership of the Australian Human Resources Institute, Career Development Association or the Australian Psychological Society, for example – that can be an indication they have relevant training. More relevant is finding an outplacement consultant who has the right expertise in outplacement and the right attitude – an outplacement consultant who can demonstrate successful results with past retrenched workers.

Memberships are an indication of expertise but it doesn’t guarantee a person’s key area of expertise is in the provision of quality outplacement services.

Ask potential outplacement consultants – who have you provided outplacement services for before? what will you provide for our retrenched workers and our managers? and what employment results have your past clients had?

What outplacement services might you want included from your outplacement consultant?

When you compare outplacement service providers – use this checklist to assess who offers exactly what you need.

Outplacement expertise

Do you want your outplacement consultant to have helped many retrenched workers to successfully find employment, previously? Ask who they have helped and what results they get. How long does it take their clients to find work, typically? Does your outplacement consultant have references or testimonials so you can be sure they are experienced and will provide a great service?

Psychological expertise

Do you want your outplacement consultant to help retrenched individuals to manage the emotional aspects of retrenchment/redundancy? Does your outplacement consultant take time to build a positive mindset in retrenched workers they are helping? Outplacement is far more than helping someone write a resume, it’s important that your provider can provide support to help people cope with the shock and build their resilience. A positive mindset is key to finding future employment. Ask your provider if they have the tools and techniques to build wellbeing.

Change management workshops.

Do you want your managers to know how to effectively manage reactions from staff, during a time of change and transition? Workshops for managers and staff can help encourage staff retention and assist people to manage their emotions, and the emotions of their team effectively. Does your outplacement company provide the option of workshops for managers and staff remaining in the organisation?

Information about Centrelink.

You may appreciate help in knowing if and when to contact Centrelink – and whether and how to involve them. Does your outplacement consultant know when you need to liaise with Centrelink, can they help you contact Centrelink?

Services at a variety of locations.

Does your outplacement consultant offer face to face appointments near to the home location of your retrenched workers? You want your people to use the outplacement service you pay for, so, if your workers are immediately leaving your work site, seek out an outplacement company that will arrange individual appointments near to where your retrenched workers live. Many retrenched workers are reluctant to travel into the city and pay for parking to visit an outplacement consultant and so may stop using the service.

Help to maintain the company image

Will your outplacement consultant help maintain your organisation’s reputation? You want your outplacement consultant to provide reassurance to retrenched workers that the redundancy was legitimate and genuine, thus helping avoid legal claims against your company that can take up time and create bad feeling. You want an outplacement company that emphasises to your retrenched workers the need to maintain good working relationships with your company.

Fair fees

Does your outplacement consultant guarantee not to charge a fee for individuals who do not take up the program at all? (If the outplacement service was just for one person then there may be a call out fee for the on the day onsite support provided, if the individual program does not go ahead).

Does your outplacement consultant reduce fees for retrenched workers who find a new job within 1 month (if they are on a 3 month program, for example).

Flexibility

Does your outplacement consultant run a flexible program where breaks, with no loss of service, can be taken by the retrenched worker for holiday leave or sick leave? (If you have paid for a 2 month program, for example, can your retrenched worker take a break, with no loss of days, if they decide to have a 2 week holiday in the middle?)

Note: Ideally you don’t want retrenched workers to delay the start of their program (you want to make sure they have emotional support at the start, someone to keep an eye on them, and someone to talk to if they have any questions such as “was this a genuine redundancy?”); but it helps if your outplacement provider is flexible with regards to holiday leave in the middle of a long program.

Links to other sources of help for retrenched workers

Is your outplacement consultant knowledgeable about local programs to help retrenched workers? Will they provide links to free or low cost local programs and services such as: training programs; the Automotive Transition Program; or advice on setting up a small business?

Assist with alternative pathways.

Is your outplacement consultant equipped to manage retrenched workers who want help to explore alternative pathways such as: starting up a small business; finding training to change careers and transitioning into retirement?

Does the outplacement company provide a comprehensive outplacement manual or workbook for each person they work with, containing examples of resumes and cover letters and useful information to back up what is covered in workshops and individual meetings with the outplacement consultant?

Is big necessarily better when choosing an outplacement consulting firm?

There are different types of outplacement consultancy. Big isn’t necessarily better.

In Adelaide there are big firms and “one man band” consultants, there are also ex-recruiters and “resume builders” who have moved into the outplacement space. Whether you choose a big firm or a “one man band” – you could find the same outplacement consultant delivers the service, because big firms sometimes use local self-employed consultants as contractors to supplement their in-house outplacement services.

If you are hiring a very large outplacement company – check:

  • Do they have rigid processes or contracts?
    • Do they charge you based on the number of workers retrenched rather than on the actual take-up of the service?
    • Do they insist clients meet them at their offices, or will they travel to the retrenched workers suburb?
    • Who will be working with your retrenched workers? Is it the person you have been liaising with?
    • Do they use contracted associate consultants? If so, who are they and what experience do they have?
    • Are they responsive to your requests for information? Will they tailor information and packages to suit your needs?
    • Are they quick to set-up an agreement with you and flexible with regard to the date they need to be on your site?

What if I am retrenching many workers and need a big outplacement team?

Self-employed consultants are often well-networked and can draw together an experienced team when needed for larger assignments. Ask your provider how many outplacement consultants will be working with your people, who they are and what expertise and experience they have.

Who is a really good outplacement service provider in Adelaide?

Ask other managers in Adelaide which outplacement consulting firm they used, who they were happy with and what price they paid. You can also look at the websites of outplacement consultants to see if they have testimonials from happy clients. Remember, many companies want to keep it a secret that they have retrenched staff so some consultants may not have many testimonials but they will probably be happy to provide references, if asked.

What’s important in choosing an outplacement consultant?

The key to a successful outplacement program is a flexible, tailored service delivered by a personable, knowledgeable, expert, outplacement consultant. If you have time, ask to meet the outplacement consultants(s) who will work with your retrenched workers, in advance of choosing a provider – so you can assess them.

Big firms may offer extras such as an on-line system or psychological testing. These tend not to be preferred by outplaced workers so may be of limited benefit.

Retrenched workers like face to face help and plenty of additional access to their consultant via phone and email, to provide individual assistance, feedback and advice on resumes and applications.

Big firms usually have their own contracts and standard terms and conditions. Read their long contracts carefully and ensure you get the service you want (for example, ensure you are not paying a price per retrenched worker, even for individuals who never see the outplacement consultant and never obtain the outplacement manual).

What does outplacement in Adelaide cost?

Bigger firms tend to be pricier for the same services. It’s wise to ask for a quote and check what it includes. Don’t buy an outplacement service based merely on price, though, as the cheapest services on offer may be from those with less experience and less expertise.

Check what the price includes. Does it include onsite, on the day, support, for example?

Onsite on the day outplacement support

Usually an outplacement consultant will include contact with you and the manager delivering the news, and on the day onsite support for the manager and the individual directly affected, as part of their package.

This onsite support typically includes:

  • briefing and debriefing the manager before and after they give the news of retrenchment / redundancies to workers;
  • meeting the affected retrenched workers immediately after they have been given the news that their position is being considered for redundancy, or has been, made redundant.

At this first onsite meeting with the retrenched worker, the outplacement consultant will be able to:

  • briefly assess the retrenched workers emotional state and ability to drive home
  • check that they have understood the message given to them
  • answer questions
  • recommend what they do for the rest of the day (typically go home and share the news with a friend or family member)
  • liaise with the workplace with regard to things like collecting personal belongings and getting home safely
  • provide the retrenched worker with brief information about who they are and how the outplacement service will support them
  • make an appointment to call them later and/or to meet with them the following day

Typically outplacement services comprise:

  • Group workshops
  • Individual Programs

or a combination of the two.

Individual programs are the most common form of outplacement service as they provide the most tailored support.

What can I do if I am retrenching many workers and have a small budget?

If you need to keep outplacement costs down, one option is to provide some group workshops and some individual outplacement face to face meetings with an outplacement consultant. If you have a large group of people whose positions are about to be retrenched, and you are happy for them to meet together for group workshops, this can be the most cost effective way to provide outplacement support.

This approach works well only when:

  • You are happy that it will be productive for the retrenched workers to meet as a group (i.e. there is little tension, anger and resistance amongst the group)
  • The group will be working out their notice so it’s easy for them to come together for a workshop at one place
  • The group are likely to share the same goals (e.g. will be seeking future employment)

The combined workshop and individual sessions approach provides input to many retrenched workers all at once plus some individual help to address individual issues (tailoring resumes, career change etc). It can be an option for those organisations with a small budget who still wish to provide some help to their retrenched workers.

Outplacement workshop prices in Adelaide (2018)

Typically you can expect to pay around $2750 per day for outplacement workshop design and delivery by an experienced outplacement consultant (pro-rata this figure at 60% for half day workshops).

Outplacement program prices in Adelaide (2018)

Individual programs are costed by the number of weeks or months that they last (and this is determined by you, the client). Typically a 4 week program will cost $2,500 in Adelaide, per person. (This is the program many organisations offer junior or mid-level retrenched workers with tenure under ten years).

A three month program (typically offered to retrenched executives, retrenched workers over 50, and others who may need longer support or support for career change assistance) is likely to cost between $4800 and $7000, per person, in Adelaide. An unlimited or one year outplacement program in Adelaide can cost from $12,000 (with an individual experienced outplacement consultant) to $19,800, or more, with a large outplacement firm.

Ex-recruiters or resume builders turned “outplacement consultant” will often charge significantly less than these prices, but may not offer the required range of help and the depth of expertise.

What’s included in a typical individual outplacement support program?

A good outplacement program is tailored to the needs of each individual. It should offer all of these as options:

  • Advice and tips for the manager(s) delivering the news onsite
  • Onsite, on the day, support for managers and individuals directly affected by the redundancies.
  • Face to face individual help for the retrenched worker – on everything from staying optimistic, managing your mindset, choosing a career direction, resume writing, finding the hidden (unadvertised) jobs and interview skills.
  • Examples of cover letters and resumes, plus individual coaching and help to write an excellent resume and covering letter tailored for each position
  • Interview skills practice sessions and feedback (covering the “does your face fit” interview and the competency interview using the SOAR technique)
  • Retirement planning assistance (look for an outplacement consultant with some knowledge about this, for example, one who is certified to run the Age Management Program)
  • Advice about when and how to approach Centrelink
  • Self-marketing and networking skills
  • Help to find other useful resources (training, free programs, local services, etc)
  • Job search skills (including the use of recruitment agencies, the benefits of networking and the effective use of online tools to find jobs)
  • Self-employment – guidance about the first steps in considering self-employment and the resources available to help.
  • Portfolio careers advice – helping retrenched workers to manage their career in a way that fits their dreams and lifestyle 

Should I offer retrenched workers the choice of an outplacement program or cash?

In short – No! Outplacement programs help protect the organisation from unwanted consequences and show that you care. (However, discuss with your outplacement consultant if there may be individual exceptions such as for retrenched workers who you know are very happy to be retrenched and want to retire).

The redundancy payout that you give to retrenched workers is totally separate to any outplacement support you offer. The redundancy payout will be determined by legal requirements and the contract your workers have with you. If you need help calculating redundancy pay entitlements look for the link to the Fair Work Ombudsman’s website – redundancy pay and entitlements calculator – in “Useful Links and Events” on this website)

An outplacement program should be offered to all retrenched workers because it benefits both your workplace and the retrenched workers.

Outplacement is of enormous help to retrenched workers, not least because it helps them manage the emotional shock of their position being made redundant. (They are thus less likely to react negatively or threaten legal action).

Retrenched workers would be tempted to take a cash offer instead (if it were offered) because they won’t understand the benefits of the outplacement program in helping them find work more quickly. The benefit to the organisation of having each worker take up the outplacement program is that you know they have emotional support and encouragement to move forward effectively. You are less likely, then, to see workers that you want to retain reacting negatively to “what has happened to their colleagues” as they will see their ex-colleagues are being supported.

Retrenched workers with outplacement support are also more likely to feel supported and less likely to feel hard done by. They are going to be reminded, by the outplacement consultant, of the need to maintain an effective relationship with the company, not least for the purpose of references. They will also have an external person to encourage them to understand that this was a genuine redundancy (the position was no longer needed although they were valued) and that the retrenchment was not personal.

The outplacement program is invaluable…but retrenched workers don’t know it. Make the best decision for the welfare of your organisation and the individuals who are being retrenched – offer an outplacement service.

How to brief your outplacement provider

Call a few outplacement providers as soon as you are able and ask if they are available to help when you need help. Request a quote or meeting. To get helpful quotes, it helps if you can outline:

  • The number of workers you may retrench
  • Whether you would like:
    • an individual service for the retrenched workers and, if so, how many weeks of outplacement support you’d like to provide; or
    • group workshops; or
    • a combination of both.
  • Any budget restrictions
  • When this might happen (ie when the employees will be given the news and when the outplacement services will be needed). Emphasise these are provisional dates and may change!
  • Outline the site(s) where the workers to be retrenched are located / the sites you’d like the outplacement consultants to attend when they provide on the day site support.
  • If possible, provide the home suburb / general regions (North Adelaide, South Adelaide) of the workers to be retrenched – so the outplacement provider can let you know if they will travel to those suburbs/areas to provide the individual outplacement meetings, or if they expect the retrenched workers to attend appointments in their city office.
  • Whether the retrenched workers will be asked to leave the organisation’s premises on the day they receive the news, or whether they will work out their notice.
  • It’s also helpful if you can explain the reactions that you anticipate from retrenched workers and other staff. This gives your outplacement consultants a chance to advise and discuss with you the benefits of different approaches (workshops for managers, individual programs for retrenched workers, etc.)

Remember – you will be choosing the date to announce the news to staff to suit your processes and the availability of your managers. It helps if you can keep the outplacement consultant(s) in the loop about the likely date (and changes to that date), to ensure they can be available onsite to support your managers and retrenched workers on that day. This onsite support is very beneficial for managers (particularly those who have not been involved in delivering the news of redundancy before) and for retrenched workers.

Research into the Effectiveness of Outplacement Services

We present below a few links to global research about outplacement and the relative effectiveness of outplacement programs.

Australian Research

Gribble, LC& Miller, P 2009, ‘Employees in outplacement services, do they really get the help they need?’, Australian Journal of Career Development, vol. 18, no. 3, pp. 18-28. Published version available from: http://www.acer.edu.au/ajcd/

Read this Australian Research here.

ABSTRACT – Outplacement is often provided by organisations to people when they are retrenched but little is understood about the processes of outplacement, or how retrenchee’s experience it. Further, those who are retrenched are often not researched as they no longer belong to the organisation that pays for the outplacement and the outplacement agencies’ focus is to assist them to find new employment. This paper investigates retrenchee’s experiences with outplacement and finds that their experiences are not always positive and the focus of the experience is on finding new work. While they are offered services other than job seeking skills, these services may not provide what they seek. It concludes by recommending that services be tailored to focus on individual needs based on personal assessment conducted between the retrenchee and outplacement provider.

Research from the US

Issues in Civilian Outplacement Strategies (1996)

A summary of key findings from “Unemployment and Outplacement: Evidence and Insights from an Organizational Psychology Perspective,” Connie R. Wanberg and Leaetta M. Hough and “Reemployment: Labor Market Barriers and Solutions,” by Duane E. Leigh.

Summary of Effectiveness

It seems evident that outplacement consulting has the potential to be beneficial to both organizations and individuals. The contracting organization receives professional advice on planning and communicating information about their layoffs, and unemployed individuals receive emotional support and assistance with financial, career, and job-seeking issues. Outplacement purports to reduce the impact of unemployment on the individual, speed the process of reemployment, and decrease the likelihood of lawsuits targeting the downsizing organization. Yet the critical reader may wonder to what extent outplacement services have been evaluated regarding their ability to adequately achieve such outcomes.

Summary and Policy Implications

This paper provides an overview of major policy proposals put forward to assist the reemployment of displaced workers, subject to the limitation that the proposals discussed have been or are currently being evaluated. Broadly speaking, these proposals fall into one of two categories: policies to speed up reemployment and policies to replenish lost earnings potential. Self-employment programs, which do not fit comfortably under either heading, are also considered, but the available evidence suggests that relatively few displaced workers are interested in pursuing such programs.

Expediting Reemployment

Among policies intended primarily to expedite reemployment, a great deal of evidence is available on the effectiveness of job search assistance services; and more evidence is forthcoming as net income estimates become available from state profiling programs. This evidence consistently shows that these services are effective in speeding up reemployment. Given their low cost, they are also typically found to be cost-effective. Early intervention with job search assistance is a basic level of services that should be made widely available to displaced workers.

The existing evidence is less favorable for relocation assistance and reemployment bonuses. A reluctance of displaced workers to relocate geographically is found to limit the usefulness of relocation assistance. Early evidence from a reemployment bonus program in Illinois indicated considerable promise that bonuses effectively speed up reemployment by offsetting the incentive of unemployment insurance claimants to delay serious job search until the end of their eligibility. Three subsequent experiments suggest, however, that reemployment bonus plans are no more effective than job search assistance programs, but at much higher cost.

Earnings subsidies have also received recent attention as a policy option that meets the dual objectives of encouraging an earlier return toBottom of Form employment and directing assistance to the displaced workers experiencing the largest earnings losses. The Canadian government is currently implementing an earnings subsidy experiment from which net impact estimates will soon be available. This experiment should help to resolve uncertainties about the labor market effectiveness and cost of earnings subsidy programs.

Replenishing Earnings Potential

Displaced workers found to be in need of skill upgrading in order to compete effectively for jobs in growing industries are usually referred to either classroom training or firm-based training programs. Since the employer shares in the costs, firm-based programs offer the advantage of providing training that will actually be utilized on the job. A large body of evidence using nonexperimental data indicates that there is a substantial labor market payoff to company-provided training. A similar result, but for a very small number of on-the-job training recipients, is also reported for the wage subsidy implemented as part of the New Jersey Unemployment Insurance Reemployment Demonstration.

The major problem with wage subsidy schemes is not that the on-the-job training they encourage is ineffective, but that it is difficult to interest employers in hiring targeted workers. For example, Bishop and Montgomery (1986) report that employer participation rates are extremely low for four targeted wage subsidy programs in operation in the United States through 1980. Rather than the carrot of a wage subsidy, other nations, namely, France and Australia, have experimented with a stick approach of requiring employers to make training expenditures equal to a percentage of their payrolls or to be subject to a payroll training tax (see Leigh, 1995). This approach has been discussed but not implemented in this country.

Results from the displaced worker demonstrations are more mixed for classroom skill training programs. Only the follow-up study of the New Jersey unemployment insurance demonstration focusing specifically on individuals who actually received classroom training services (as distinct from the random sample of all eligible individuals offered it) yields evidence of a positive effect of classroom training above that of job search assistance only. It is worth noting that the short-term, low-cost training provided in New Jersey was designed to upgrade workers’ existing skills rather than to furnish training for a new occupation. In contrast, participants in the Trade Adjustment Assistance program received longer-term training intended to equip them to enter a new occupation or industry. Evaluation results for the program are positive in the sense that the longer-term investments in classroom training allowed the earnings of the trainBottom of Form

ees to reach the level of earnings of a comparison group of displaced workers, most of whom may be presumed to be industry and occupation stayers. (Displaced workers reemployed in the same occupation and industry typically experience smaller earnings losses than occupation and industry switchers.)

On the basis of this evidence, it seems prudent to conclude that classroom training should be limited to carefully selected workers who can be matched with training curricula tailored to their backgrounds and the needs of local employers. A training voucher program appears to be an appropriate policy for allowing selected individuals to exercise freedom of choice in choosing a training curriculum while effectively utilizing the nation’s extensive system of postsecondary educational institutions. Evaluation results will be available in the near future for a voucher-based training program implemented in New Jersey.

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Wikipedia also recommends the following research articles:

References[edit]

  1. Doherty, Noeleen (1998). “The role of outplacement in redundancy management”. Personnel Review. 27(4). p. 343.
  2. Littler, Craig R. (2003). Understanding the HR Strategies of the 1990s. University of Queensland Business School Seminar Series.
  3. Lewison, J. (2002). “From Fired to Hired”. Journal of Accountancy. 193(6): 43.
  4. Dvorak, Phred; Lublin, Joann S (August 20, 2009). “Outplacement Firms Struggle to Do Job”. Wall Street Journal. Dow Jones & Company, Inc. Retrieved January 21, 2016.

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