Layoffs hurt. Can outplacement services help?

Layoffs can be one of the most stressful events in an employee’s life. Such decisions are stressful for HR pros, too, even if they’re not impacted themselves.

“HR people didn’t get into HR to let go of folks,” Bob Goodwin, president of Career Club, told HR Brew. “It’s a crappy day for them, too.”

One way some companies seek to soften the blow of layoffs is by offering outplacement services to affected employees, with the aim of assisting them in their next job search. Goodwin’s company offers outplacement, as does The Muse, a career platform that launched an outplacement arm in June. Outplacement services can range from résumé reviews to networking to interview coaching.

Ultimately, the goal of outplacement is to place laid-off employees in new jobs, but it’s important not to overlook the emotional needs of these workers, too. Outplacement providers offered a few tips for HR pros considering investing in the service.

Think about why you’re investing in outplacement. When companies invest in outplacement, it can sometimes come off as merely checking a box, so that it’s able to say it did something good for laid-off workers, Goodwin said.

Employers may also offer outplacement as part of a severance deal, which can be seen as a move to reduce their liability, according to Sarah Johnston, an executive résumé writer and founder of Briefcase Coach. “They think that if they offer outplacement services, then perhaps they will maybe mitigate any issues that they may have with employees who feel disgruntled,” she said.

To avoid these perceptions, it’s worth thinking through and articulating your department’s decision to invest in them. Sometimes the decision comes down to living out your business’s values, Goodwin said. “If a company says, ‘People are our most important asset’...here’s where the rubber meets the road. Do you really mean this?”

Branding, and the well-being and morale of remaining employees, may play a part in the decision as well.

“It’s a moment when all eyes are on the company, internally and externally. And a lot of questions arise,” said Eloise Eonnet, director of Coach Connect, The Muse’s outplacement service. “Seeing your colleagues being supported as they leave the company really helps the employees who remain feel less of a blow and also really trust leadership more, which is really important in these big moments of transition.”

Doing due diligence. Outplacement is expected to be a $2 billion industry by 2025, and the size and scope of firms offering these services varies. Some of the bigger firms include LHH, Right Management, and Challenger, Gray, & Christmas.

Johnston estimated the cost of outplacement can range from $1,500 to $50,000 a head, with the latter likely going toward services for laid off C-suite executives. HR software firm ADP estimated that the cost of outplacement firms ranges from a few hundred dollars for basic services to upwards of $20,000 for executive services.

While smaller, boutique firms are not always well-positioned to handle a large layoff, Johnston recommended looking into these options if possible. “If you can at all go local and build relationships with local boutique outplacement, or even regional boutique outplacement, you’re more than likely going to get a really quality service because you’ve got people who are very invested in the community,” she said.

Johnston also recommended looking into credentials of outplacement firms’ employees to ensure they have high-level writing and recruitment experience. During economic downturns, firms might beef up their writing or outplacement staff at the expense of quality, she noted.

Look beyond job placement. Layoffs can be devastating, and employees may have to work through feelings of fear, shame, or anger before they’re ready to fully commit to finding a new job, Goodwin said.

He said his firm tries to address the mental wellness needs of laid-off workers through resources focused on emotional intelligence and community. This includes a weekly virtual coaching call with other members of Career Club, so that workers can network with other people who help them stay engaged, even as they weather rejections through the job search process.

Support for laid-off workers doesn’t have to be limited to outplacement, Johnston noted. Sharing lists with contact information of affected employees through sites like layoffs.fyi can go a long way in making their profiles visible to recruiters. Keeping lines of communication open between current and former employees can help lessen the emotional blow of a layoff, as well.

“Give your team permission to reach out, offer to help if you’re willing and able to,” Johnston said. “Remember, it’s humans who’ve been impacted by this.”