Employee Benefits: Outplacement Service for Departing Workers

Guidelines for Coordinating Employee Layoffs With Outplacement Service

Employee Layoff
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Nearly every organization is faced with making employee cuts or downsizing at some point. This can be a painful decision, but one that needs to be made to preserve the future of operations and protect the jobs of remaining employees. A responsible company offers a wide range of employee benefits, including outplacement services for departing workers. 

What Is an Outplacement Service?

In the mid-1980s and 1990s, layoffs and downsizing was a common occurrence among businesses. Then again, with the 2007-2011 recession, layoffs and complete division shutdowns brought about more problems for employers. New laws were put into place to assist employees with gaining advance notice about layoffs and accessing community resources for job retraining and placement support. 

Many companies decided to be proactive and partner with outplacement services to help smooth things over and make departures less stressful. A company highlighted in Forbes for example, helps large firms like Warner Bros. prevent wrongful termination lawsuits, workplace disruption, and more. 

An outplacement service is an agency that provides specialized career support to employees who are leaving a job through no fault of their own. Generally, this is a service that a company offers as an employee benefit when a layoff is about to happen. The company contracts with an outplacement service to provide these services at no cost to departing employees. The outplacement service is usually a recruitment firm that has experience and solutions to help employees re-establish a job as soon as possible, through placement with a network of other companies and career-related services.


What Do Outplacement Services Do for Employees Leaving?

Once it’s determined that outplacement services are required, the contracted agency provides a variety of benefits and on-demand services to affected employees. These services can include, but are not limited to:

  • Resume and cover letter development and writing
  • Career assessments and personality tests 
  • Interview scheduling and preparation 
  • Professional networking and community help
  • Career guidance sessions and coaching
  • Matching skills with area employers
  • Access to career-retraining and education
  • Employee benefit information and support

Why Offer Outplacement Services to Employees?

Whether the layoff is small or an entire section of a company is being eliminated, it’s important to avoid letting employees feel abandoned or lost in the process. From the time they receive notice that their employment relationship is being severed by the company, employees can begin to panic. They wonder where their next paycheck will come from, how they will be able to continue receiving employee benefits like health care and retirement savings, and what to expect in the following weeks and even months.


At the very least, companies should look at outplacement services as a lifeline extended to employees to help them make a seamless transition to a new career without all the stressors commonly experienced without this support. 

Handling a Layoff the Right Way Using an Outplacement Service

There are very specific requirements in terms of handling a reduction in the workforce (RIF) and using an outplacement service. By taking the following steps, an organization can prevent costly lawsuits and avoid the negative impact on operations. 

Important note: Assemble a layoff committee and HR lead to act as the decision-making team and point of contact for departing employees and follow-up with outplacement services. 

Step 1: Make Carefully Determined Employee Selections 

Once your organization has decided to reduce its workforce based on a business decision it's time to make employee termination selections. It's important that whatever criteria is used to decide what are employees are to be let go are not covered under specific protected classifications. For example, never choose terminations based on age, gender, national origin, health, or marriage/parental status. Watch out for making decisions purely based on salary earned or position within the company. In most cases, each department needs to be looked at and evaluated to determine available skills, knowledge, and value to the company.

Step 2: Send Out Required Notification Under the WARN Act 

In addition to a standard employee termination letter, the Worker Adjustment and Retraining Notification (WARN) Act was put into place to provide affected employees with companies of 100 or more employees with at least 60 calendar days of notice in advance of a mass layoff event. Smaller companies often do this as well with a mini-WARN notice. In the notification, and employers must advise employees if the termination will be permanent or temporary, the expected separation date, and if the employee may be recalled or eligible for future employment opportunities.

The written WARN notification must be sent out in advance and area community employment agencies can be sent a copy as well to support job placement of departing employees. 

Step 3: Review Employee Benefits for Older Workers 

Many times older workers are eligible for Medicare and therefore it's critical for employers to review not only regular employee benefits but also those for older employees. The Older Workers Benefit Protection Act prevents age discrimination in terminations. Employers are required to give workers over the age of 40 additional time to decide if they would like to pursue and take advantage of age related benefits or a more generous separation package.

Step 4: Advise All of Severance Pay and Benefit Options

As soon as possible employers must provide detailed information for terminated employees as to what to expect concerning severance pay, bonuses, and employee benefit options. This includes information about how employees can continue to receive group health coverage under COBRA coverage. It can also be a good idea to give employees the option to terminate early for a lower severance pay provided another employment opportunity is offered before the final termination date. This can be coordinated between the outplacement service and the employer.

Step 5: Refer Selected Employees to the Outplacement Service

All employees who are to be terminated should also receive written information and instructions on how to access the contracted outplacement service vendor. This includes contact information as well as instructions on how to access any online services. Managers should make sure that all impacted employees make an immediate appointment with the outplacement service to provide résumé and updated skills. The outplacement service can then match individuals up to careers within their network.

Step 6: Conduct the Layoff Sessions Privately and in Small Sections  

It is important that all employees feel supported and respected during this transition. A lay off can be traumatic for people because it is a change that involves the financial security of an employee. Finding out that one is to be let go from a career can be very upsetting. The outplacement service can be instrumental in supporting private and small waves of terminations. In this way, employees Will experience things in a more positive and hopeful way.

Step 7: Notify the Remaining Workforce of Layoffs and Restructuring

Once the bulk of the layoffs have occurred it's important to notify the entire company of the status. The restructuring and reassignment of the employees left behind needs to take place. Outplacement services will continue to work with terminated employees, but they can also provide support for realigning employee descriptions and tasks with the new objectives of the organization. In the future, some of the terminated employees maybe eligible to return and the outplacement service can help by bringing people back on in strategic roles.

Choosing the Best Outplacement Services

When designing what outplacement service will work best for your company, there are some criteria to determine a good fit. While every organization is different there are some factors that can make for a more positive and productive relationship with an outplacement provider. 

Adaptability: an outplacement service must be adaptable to meet the needs of each organization. Do not expect a one-size-fits-all solution. Choose a provider with multiple levels of support that can be customized to your company. Choose flexible and scalable solutions that can grow with your organization over time.

Seamless: using an outplacement service must be a seamless experience from start to finish for all your employees. It must be simple to access and live support from caring people should be in place. Virtual outplacement can be a good option for companies that have offices in multiple regions.

Complaint: make sure that your outplacement service complies with all local and state laws. This helps to reduce any risk to your organization. For example, it can be very difficult to deal with a wrongful termination lawsuit if all the laws are not carefully followed and documented. 

Networked: when employees find out that they are being terminated it is often met with much fear. However, a well known outplacement service can sooth fears find a kidding how large their network is in terms of finding a new job. For an agency that is well-connected and is actively involved and community outreach.

In any layoff situation, employees who are either on the chopping block or those who will be left behind need to hear from leadership. An outplacement service can help leaders craft a message to dispel potential fears. No one needs to be left to their own devices during this transition. There is help and support available for employees and the companies they work.

Outplacement services can be a valuable benefit to offer employees during any layoff or business restructuring. Since many employees turn to social networks and company review websites to share their experience with the world, if they have a positive experience during a layoff vs. a negative one; they are more apt to create a better image for the company they are leaving. This investment in helping departing employees with their future career needs is not only a good will effort, but it’s one that can help build a solid industry reputation that can lead to better employee relationships.