It is as predictable—and as depressing—as death and taxes. Whenever there is a significant downturn in the economy, there is a corresponding flood of firms from the far reaches of the human capital industry, all of them scrambling to grab a piece of what they believe to be an outplacement gold rush.
It is true that economic downturns, particularly deep and sustained ones, do prompt layoffs as a response to precipitous losses in revenue.
But at a moment like that, contracting with a human capital firm with no prior experience in outplacement is simply not a well-advised option for an organization facing an economic crisis.
That certainly doesn’t stop some firms with expertise in other areas of human capital—talent management, recruitment, leadership development, coaching—from trying to quickly set up shop in an area of human capital that appears to represent growth opportunities.
These opportunists do not, however, really understand how career transition fits into the continuum of human capital strategies. And their lack of knowledge and expertise can have disastrous consequences.
Professional, well planned and smoothly executed, outplacement is, first and foremost, the hallmark of a caring organization. It is a process that reflects a paramount reality: employees, even those who are no longer needed, are still valued and should be treated with the same care and respect as when they were hired. Properly executed, it can be a lifeline for redundant workers, and an important pillar in an organization’s employer brand.
In short, outplacement that meets high standards can be a win-win for both individual and organization.
When managed poorly, however, there is no limit to the damage it can do to all involved.
The true cost of a career transition gone wrong
In April 2020, electric scooter rental company Bird—which had been valued at more than US $2 billion prior to the pandemic, earned harsh reviews for its decision to lay off more than 400 employees, nearly one-third of its workforce. As cities began to impose shelter-in-place orders, the company’s revenues were devastated.
In what could only be described as a pandemic-era experience, the employees found out the bad news via Zoom conference call where an unfamiliar woman’s voice without any video delivered a very brief, very succinct message that they had been laid off. Employees found out that they were being locked out of Slack and company email during the Zoom call.
The company’s CEO did send out a longer email to the affected employees later in the day, but the decision to announce the layoffs via mass video conference instantly became news around the world, with social media chatter suggesting that many former customers would reconsider their decision to use Bird again once pandemic restrictions were eased.
Career transition is more than just another transaction
It is unclear whether Bird retained a partner to help them with these layoffs, but it’s highly unlikely. The tell-tale sign is the fact that Bird treated the layoffs as just another business transaction, which is the central flaw in the approach used by speculators trying to get into the outplacement business.
Inexperienced career transition firms typically operate on an assumption that employers just want to get rid of people as quickly as possible and don’t really care how it’s done. This shows up in the limited support they provide. There is an underlying belief that every affected individual is exactly the same and only requires a small settlement, some help writing a resumé, and directions to a job board. These firms assess the success of their service based on how quickly they can move someone out of the organization and into the job market, all of them loudly promoting the same “time to landing” figures but falling short when it comes to meaningful results.
No muss, no fuss, and certainly no real insights into the dynamics of the current job market.
There are several obvious fallacies in this approach that can be spotted before signing up with the wrong firm.
4 questions to ask when choosing an outplacement provider
Professional, qualified outplacement providers have a proven and easily identified record of success. They have worked with all types and sizes of companies. They also offer a broad range of solutions and services to address the unique needs that exist at different levels of an organization. A proven career transition expert not only knows how to support line-level employees through outplacement, but also offers boutique solutions for the C-Suite.
Ask these four questions before selecting a provider:
1. Do they propose alternatives to layoffs? There are many instances where layoffs simply cannot be avoided. However, experienced career transition firms will make it clear that outplacement support is only one option in an array of workforce management strategies. These career transition firms will make sure other cost-effective options—such as retraining, reskilling and redeployment—have been fully explored before people are let go.
2. Are they only focused on getting your people out the door or do they really care about their future? Experienced career transition firms know that when layoffs are unavoidable, success is not measured purely in how quickly an individual can be moved into any new job. Some people won’t have a similar job to go to in another organization. Those people need more than a course on resumé writing and interviewing techniques. They need an experienced firm to identify career pathways—which may involve reskilling or upskilling—to not only find their next job, but arguably a better job.
3. Are they able to connect your former employees with real job leads, or just pointing them towards a job board? The best outplacement partners are those who can connect your people with known talent managers who are interviewing and hiring talented people in real time to fill open jobs. Most of the best open positions are never posted on job boards. Access and insight into the hidden jobs market is a specialized talent that most of the pretender firms simply do not possess.
4. Do they want to talk about the future of your workforce? Companies with the best employer brands know the real challenge today is how to future-proof their workforces to minimize the need to undertake layoffs. You can only do that by figuring out whether you have the right people in the right jobs now, and what kinds of skills you will need going forward. Unfortunately, layoffs are an unavoidable reality during economic downturns. But legitimate career transition firms can help you build a workforce of the future by helping them acquire new skills so they can absorb downturns and market shifts without having to resort to the costly fire-and-hire cycle.
As with any great business challenge, layoffs present both a burden and an opportunity. Having to lay off employees—sometimes large numbers of employees—can be a disruptive experience both for individual and organization. But out of that disruption, opportunities can emerge.
A great outplacement partner understands that if you are forced to lay off some of your people, it’s only because all other options have been exhausted. When the layoffs occur, an experienced career transition firm will make sure that your people are not just moved out, but that they are given the support to truly succeed in what is undoubtedly an uncertain job market. And in doing so, the partner firm will provide a strategy to protect your reputation as a viable destination for top talent.
And most importantly of all, a trusted career transition partner will ensure that going forward, you will be able to build a workforce that can evolve to meet the challenges of a most uncertain future.