From Pink Slips to Productivity: The Business Case for Outplacement

November 20, 2008

By Sallie Bottorff, CEO of Human Resource Dynamics

Layoff, downsize, cut back — these are all just synonymous phrases for reduction in force, which isn’t a chore any employer or employee wants to face. But the fact of the matter is, the recent economic climate and rising operating costs sometimes means that streamlining operations might be in order so that your company can move forward.

A well-defined strategy that takes company objectives and long-term goals into consideration is the first step towards your company’s future success. Of course consider every cost-saving option before cutting back on employees, but if that measure is the final decision, it is vitally important to put a strategy in place to ensure that production can continue with a smaller staff. Most importantly, get to know the term outplacement, instead of just letting employees go. An outplacement strategy means your company prioritizes taking care of all of your employees (including those asked to leave).

At Human Resource Dynamics, we believe that regardless of the size of the company, outplacement is just good business sense. Our clients see gains in loyalty and productivity – along with fewer legal entanglements – by transitioning former employees’ talent and preparing them for the next step in their careers.

Consider this: disgruntled former employees who feel that they were left jobless and helpless have your company’s reputation in the palm of their hand. It makes bottom-line sense to equip them with the skills and resources they’ll need to land on their feet to leave them feeling as victimless as possible.

What’s more, your remaining employees will be paying close attention to how their colleagues are treated. If they feel their coworkers and friends were callously ousted, you could be facing serious production and morale issues. Your remaining employees might be hindered by the thought that their position could be next. An improperly handled downsizing can actually cost your company more in terms of productivity and reputation, completely undermining the restructuring’s purpose.

When we sit down with an employee to give him or her the difficult news — one-on-one, of course — every employee reacts differently. But once they realize that a cohesive outplacement effort will be made to help them get a job and equip them with new skills, most employees feel considerably less shaken.

Because former employees will continue to be ambassadors of your company, it’s vital to provide them with one-on-one guidance, résumé advice, and other useful resources such as an online career portal. Finally, personalized job coaching also helps employees in defining direction during this transitional period while pinpointing their own strengths and weaknesses.

While outplacement has a higher up-front cost than just passing out pink slips, studies show it decreases legal incidents and increases productivity. Satisfied employees, both past and present, strengthen your company’s foundation. Making use of outside outplacement professionals also ensures that your remaining employees trust and respect your in-house human resource professionals.

Your workforce is your company’s most valuable asset. Where would your business be without capable, talented employees? Even though outplacement is always a last resort, assuring employees every step of the way in times of transition will keep your company’s reputation intact.


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