Is outplacement dying?

Job cuts spiked in January, with huge layoffs for several retailers. Time will tell whether outplacement was worth the cost for them, but is it really worth it for you?

With job cuts up nearly 50% for the month of January 2014 over January 2013, many companies will be considering outplacement, particularly those in retail. Huge layoffs at Sears, Macy’s, JC Penney and Target are fueling income for several outplacement companies, but how effective is outplacement in reality?

According to a global survey by Right Management: 
  • 69% of companies offer outplacement to department heads, managers and supervisors that are involuntarily separated
  • 35% of private corporations globally offer money in lieu of outplacement services
  • In the 12 months following a downsizing, 34% of companies that bought outplacement reported productivity increases versus 28% of non-buyers
  • Unwanted turnover decreased for 17% of buyers versus 14% of non-buyers
  • Sick days decreased for 28% of buyers, compared with 18% of non-buyers
  • Employee satisfaction increased for 38% of buyers versus 14% of non-buyers
However, when HC contacted the firm, Right Management declined to identify examples of successful outplacement clients, nor could it reveal whether outplacement was trending upwards or downwards.

Sandra McCartt, a Texas-based recruiter, predicted a downturn in the number of companies providing the services.

“I think we're seeing less and less of outplacement,” she said. “It has not been very effective through the recession, because if there weren't jobs to go to, all of the outplacement in the world doesn't help.”

For employees who have been working in the same workplace for decades, outplacement could be useful, McCartt said. But for others who have been active job seekers more recently, they may not need the services. She cited an example of an engineer with a Ph.D. who milked the benefits of outplacement when he could have gotten a job without it. “He could have cared less (sic), but when it got close to the end of his severance package, then he got serious about the job,” she said.

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