Does outplacement need a makeover? Enter ‘outskilling’

When companies let workers go, they might offer them severance pay, or continue their healthcare coverage for a certain period of time.

Historically, some employers have also partnered with outplacement services to help these workers land a new job. But such benefits are no longer sufficient in the AI age, one learning and development (L&D) executive recently told HR Brew.

With traditional outplacement services, “it’s not clear whether the person is getting the support they need on the other side, and even when they do offer some type of skilling, it’s very low-fidelity access,” Bijal Shah, CEO of L&D platform Guild, said.

Employers in Guild’s network are looking to reenvision support for laid-off workers with a type of support that Shah described as “outskilling.” This might look like spending between $2,000 to $3,000 for each employee so they can continue to take courses on Guild for two to three years after they’ve left the company.

Guild is currently offering or actively exploring offering these types of benefits with nearly a dozen employers, philanthropic, and public sector organizations, the company said via email.

The goal is that continued access to such resources may help employees “get the credentials or skilling that they need in order to take on that next opportunity,” Shah said.

Getting ahead of AI. US-based employers had announced more than 440,000 job cuts as of June, according to outplacement firm Challenger, Gray, & Christmas. AI was the top reason cited for these layoffs, ahead of market/economic conditions, closing, or restructuring.

In recent layoff announcements, some major employers detailed career support they were offering to affected workers. Laid-off Amazon employees would receive outplacement services as part of their transition support, SVP of people Beth Galetti said in a Jan. 28 announcement detailing 16,000 job cuts. And Meta offered laid-off employees three months of access to outplacement firm LHH, according to an email reviewed by Business Insider in May.

But continued access to L&D resources doesn’t appear to be a widespread benefit for laid-off workers yet. Shah said that while Guild hopes to share more details about outskilling programs soon, the employers it’s working with are reluctant to speak publicly about such benefits for the moment.

Ideally, companies should equip workers with relevant skills before they turn to layoffs, some experts argue; Microsoft said on July 6 that while it’s eliminating 2.1% of its global workforce, it’s also redeployed more than 4,000 employees into new roles over the past year. EVP and Chief People Officer Amy Coleman added, “we will continue to do everything we can to create opportunities for our people, reduce the need for job eliminations where possible, and responsibly support those affected with care and respect.”

If managers have a long-term view of how an employee’s job might change due to AI, they should “be transparent and communicate that to employees early and often,” LJ Justice, a director analyst with consulting firm Gartner, said. Justice said they often talk about a “two-way deal” with clients, in which employers promise job security on the condition that their employees build new skills.

“Not only does that help you with whatever ambitions that you have long term, but it resolves a lot of the fear, a lot of the anxiety, a lot of the mistrust that happens as a result of mandating the use of a tool that feels scary at this time,” Justice said.

Justice noted that employers share the same talent pools, and predicted that more companies may soon “find that they have a responsibility to make a good faith investment in employability,” whether that takes the form of job shadowing, internal gigs, project marketplaces, rotations, apprenticeships, or reskilling.

“If we’re remembering that at a macro level, we share a talent ecosystem, we’ve got to be able to to make something work within that, where the answer is not, ‘good luck,’” they said of companies’ treatment of laid-off workers.

The ROI of outskilling. There appears to be a desire among workers to continue developing their skills after they’ve left jobs, Sam Caucci, founder and CEO of the skilling platform 1Huddle, which focuses heavily on frontline and hourly employees, said. He estimates that about one-third of workers that had access to 1Huddle continue to use it after they’ve left.

“​​A big part of the platform for us today is out-of-work workers that are still engaging in learning, and still engaging in skill paths, or trying to find what their next job is,” he said.

Shah said she believes employers that invest in outgoing talent could see a positive impact not only on their brand, but also their ability to recruit boomerang employees.

In the longer-term, investing in programs that help employees land on their feet could have economic impacts benefiting a business’s bottom line, she suggested.

“It’s very clear that if you start to have populations of people who are wildly unemployed in specific geographies, they’re not going to go shop at your local retailer, they’re not going to go buy goods from a specific company…it’s actually quite tangible back to the revenue line item,” she said.