Outplacement Firms Impact Remaining Employees
Whether or not laid off employees are offered services from outplacement firms (Click here) can make a difference to the workers left behind.
“Global Trends in Separation Practices,” a 2009 study from DBM and the Human Capital Institute, found that separation benefits provided by a company to terminated employees will impact the morale of any remaining workers.
The study, which included more than 1,200 business leaders from 45 countries, shows that a company’s decisions regarding separating employees - including severance pay, outplacement support and other continuing benefits - can create ripple effects throughout the entire company long after the departing employees have left the organization.
In addition, whether or not a company provides these services to departing employees can even affect its brand and public image. Other key findings include:
- Companies consider separation practices as part of an overall strategy to preserve and strengthen the relationship between the organization and its disparate constituents.
- Most organizations provide severance to at least some of their employees with almost half offering severance to all of their employees, including part-time employees.
- Most organizations with 100 or more employees provide outplacement to some terminating employees.
“In today’s marketplace, organizations recognize that support for departing employees is a requirement of business rather than an option,” Robert Gasparini, CEO and chairman of DBM, said. “Separation policies are now viewed as integral to business strategy, helping to safeguard the company brand and reinforce relationships with employees, consumers and stockholders.”
Of the respondents with at least 100 employees, 75 percent provided outplacement services to some terminated employees. The biggest motivation for providing services is corporate values, cited by 76 percent of companies, with only 10 percent citing labor relations or legal considerations.
About 63 percent of companies claim an employee’s level within the organization is the biggest factor in determining the services offered, followed by years of service at 39 percent. About 58 percent of companies increase outplacement services under certain circumstances, such as mergers, acquisitions and facility closings.
Throughout the world, 90 percent of HR professionals say the most valued features of outplacement include support, coaching and guidance from consultants; self-marketing materials; skill building and coaching; job leads and networking connections; and access to online resources.
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