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Layoffs Looming? Protect Your Organization With Outplacement Services


Laying off employees is never easy; it’s financially difficult for the employees who are let go, and mentally draining for everyone involved. In most cases, layoffs mean visiting stress, fear, upset, and financial hardship upon workers you’ve trusted, admired, and grown to care about over the course of their time with your company. But, while layoffs may not always be avoidable, outplacement services can smooth the transition for your former employees by helping them find new jobs faster.

But outplacement services aren’t just good for employees; they benefit organizations, too. Providing high-quality outplacement services to your former employees inspires trust and loyalty in those who remain behind; reduces your chance of facing wrongful termination lawsuits; protects your company’s reputation; and lowers costs associated with downsizing.

Keep Remaining Employees Loyal

Downsizing has a way of making everyone in the office nervous – and for good reason, because people need their jobs. A big problem with downsizing is that it can increase employee turnover, as workers begin to second-guess their loyalty to the company and jump ship before the layoff ax can fall on their necks.

But offering outplacement services to those employees who have been let go actually increases the loyalty of those who remain. That’s because they can see the company is willing to stand by its employees till the bitter end, by helping them navigate the job search after they’ve been let go. Employees want to feel that the company cares for them, and they want to feel professionally and financially secure. When they see that the company is willing to offer outplacement services, they see that there’s a security net there to catch them in the event they, too, are let go.

Reduce Your Risk of a Lawsuit

According to a study from the Federal Reserve Bank of Chicago, the majority of employees who bring wrongful termination lawsuits against their former employers do so not because they need the money, but because they feel humiliated by the company’s treatment of them. Laid-off employees who receive outplacement services are more likely to feel respected and supported by the company, and will have less incentive to bring a lawsuit. The same is true of employees who get new jobs quickly after a layoff.

Cut Costs Associated With Downsizing

The point of downsizing is to save the company money in the long run, but in the short run, it can be expensive. The mere costs of increased turnover that often come with downsizing can be considerable. But, while outplacement services can cost an additional five to 10 percent of an employee’s salary, they can pay off.

For example, outplacement services could help a 1,000-employee company, laying off 100 people, save as much as $1.4 million in wrongful termination settlements and legal fees. Because they help ex-employees find new jobs faster, they significantly reduce your company’s severance costs, including the cost of health care for recently-terminated employees. Your company will save on unemployment taxes, because the more of these benefits your former employees collect, the higher your company’s unemployment tax bracket. Investing in outplacement can also lower costs associated with absenteeism, which can more than double after a downsizing.

Protect Your Company’s Reputation

Employees and ex-employees talk about your company, and what they say goes a long way towards forming your reputation. When ex-employees feel that they weren’t treated fairly during the downsizing process and remaining employees are skeptical about the company’s capacity for loyalty, your company’s reputation will suffer. That will mean you’ll have trouble attracting the best talent, because those candidates will go to companies that offer more long-term support in the form of better severance and outplacement services. Your organization will retain a positive brand image, and you may even be able to someday hire back some of the employees you’ve just had to let go.

Outplacement services are great for helping laid-off employees embark on the job search process, but offering robust outplacement help keeps your company running smoothly, too. It eases the minds of employees left behind, so they don’t go looking for jobs with the competition; it reduces severance costs, unemployment taxes, turnover, and other financial drains; and it keeps top talent interested in your company. Don’t burn your bridges – offer your soon-to-be-former employees the outplacement services they need and deserve.


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