The Benefits of Outplacement Services for Companies and Employees in Canada

July 08, 2024 by Rafael Spuldar

Offboarding is always hard. When layoffs happen, emotions run high among both dismissed employees and the surviving staff, stress hits managers and HR professionals, rumours dominate watercooler chats, and uncertainty becomes the norm.

It doesn’t need to be like that. As difficult as those situations are, the organization as a whole – and HR in particular – needs to reassure people that they’ll be treated fairly and supported to start the next chapter in their careers as soon as possible. That means adopting outplacement services in your offboarding strategy and severance packages.

In this article, we’ll discuss the benefits of outplacement for your organization and how it relates to the realities of the job market in Canada. That includes:

  • Learning what outplacement is and why companies use it
  • Discovering the benefits of outplacement for employees and companies
  • Considering the scenarios when outplacement can be the wrong decision

What is outplacement?

Outplacement is a support service that companies provide to help dismissed employees transition to new jobs. Those services help people to quickly find opportunities matching their skills and career goals, making the offboarding process more manageable and less stressful for the company and its employees.

Organizations typically use outplacement services during layoffs; those services include expert career counselling, resume writing assistance, interview coaching, access to job search resources, and more. Also, with the technology advancements we see every day, modern outplacement firms like Careerminds leverage innovation and state-of-the-art solutions to help workers and businesses all around the globe with efficiency and security.

Why do businesses offer outplacement services?

Few events are more stressful in the workplace than a layoff. While HR and the remaining staff might be left dealing with insecurity and low morale, laid-off employees can feel discouraged or anxious when they are let go, hurting their prospects of finding a new job quickly.

Statistical Insight:

There are approximately 1.4 million unemployed people in Canada.
Source: Labour Force Survey, Statistics Canada, May 2024.

 

Besides, employees could feel let down if the company provides no support after those unforeseen dismissals, even with rights such as severance pay and unemployment insurance protected by Canadian law. So, as much as HR doesn’t want to leave people unassisted, the complexity of a layoff could leave that impression and hurt the organization’s reputation.

That’s why companies must acknowledge a layoff’s multifaceted nature, plan all steps thoroughly from start to finish, and include outplacement at its end. By resorting to outplacement, companies will, on the one hand, provide a smoother pathway for workers to find a new role and, on the other, prevent damage to their reputation and productivity.

What are the benefits of outplacement for employees?

Now that you have a better idea of what outplacement is and how companies can leverage it, let’s see in more detail the benefits of outplacement as part of your talent strategy. First, let’s examine its benefits for the employees impacted by a layoff in your company.

Landing a new job faster

Finding a job by yourself can be more than daunting. Some workers could spend months without finding a new work opportunity, let alone one that suits their skills and expertise. 

Statistical Insight:

Unemployed Canadians look for work for 18.1 weeks on average before finding a job.

Source: Statistics Canada, May 2024.

 

However, when companies offer outplacement services after layoffs, employees are supported by experts who help them to improve their resumes, leverage their networks, learn interview skills, and better use job search platforms. Consequently, the individual gets more contacts from recruiters, lands more interviews, and the waiting time for a new job is considerably shorter.

If you’re wondering how efficient an outplacement service can be, take Careerminds as an example. It uses the latest technology in virtual training and a personalized approach to career coaching to cater to the needs of both workers and the company. As a result, our participants get new and better jobs in just 11.5 weeks – about 38% faster than the average in Canada. Even more impressively, Careerminds boasts a placement rate of 95%.

Mitigating negative emotions

Layoffs can stir up a wide range of emotions for those affected. Those who are let go experience all kinds of feelings, like sadness, anger, and fear, and they can express this through social media posts, messages to their old colleagues, and other interactions. In their turn, those who remain will feel the layoff’s impact, fearing they might be dismissed the next time or worried about how their departing coworkers will manage their careers.

By making outplacement services available to laid-off employees, your company will help cool things down across the board. This will send the message that any impacted employees will have your support to land a new job as fast as possible, improving the mood inside the teams and reducing the risk of potentially harmful external repercussions.

Feeling supported and valued

No one is 100% safe from being impacted by a layoff, whatever the size of the company or the employee’s level of expertise. However, when outplacement is part of an offboarding strategy, most people will feel part of an employee-centric culture, feeling secure and valued.

So, even with the possibility of a layoff, using outplacement services will make employees feel more supported by the organization, more proud to be a part of it, and more motivated to do their best work or to become ambassadors of your brand.

Receiving tailored support

The outplacement strategy for each participant should depend on their level of seniority and experience in their former job. For example, the approach to laid-off executives will be different from that of most entry-level employees. This customized method will make the job search much more efficient, and each person will, once again, feel valued and taken care of. 

The best outplacement firms know how to customize their services, based on the affected employee’s role and level. In the case of Careerminds, for example, its 1:1 coaching sessions, its presence in various markets globally, and its wide range of solutions for all talent levels ensure every participant’s goals and needs are addressed individually.

What are the benefits of outplacement for companies?

We’ve just seen the main benefits of outplacement for employees, but how does it play for the organizations that provide it? Actually, those services do even more for companies than for individuals – although people must be front and centre in your strategy. Let’s see the advantages of outplacement services for companies strategizing a layoff.

Preserving reputation and values

Layoffs and other workforce reductions happen all the time, for various reasons. However, when those events occur, their repercussions on people’s lives can be severe, whatever their scale and motivations. If you add social media and other online platforms to the equation (like job review sites such as Glassdoor), amplifying word of mouth and giving shape to people’s potentially bitter feelings, your company’s reputation will be at risk.

So, HR must ensure that a comprehensive offboarding plan is in place when planning a layoff, so that the dismissed employees are treated respectfully. One way of doing that is to include outplacement services in the severance package. This way, you’re sending the message that you support and care about employees, both those who were let go and those who stayed.

By doing that, your company will also demonstrate, internally and externally, that the core values behind its corporate culture are not just for show, increasing its respectability and reputation among workers and its community. The proof is that Careerminds clients score 16.5% higher on Glassdoor reviews.

Increasing productivity and retention

As a consequence of the previous benefit, workers who witness their employer’s dedication to assisting laid-off colleagues through outplacement are more likely to feel valued and secure. This enhances overall job satisfaction, loyalty, and morale, leading to higher retention rates.

Moreover, this positive work environment encourages employees to be more engaged and motivated, leading to better performance and an easier path toward business goals. Statistics show that employee satisfaction correlates with productivity and profitability.

Statistical Insight:

Highly engaged teams are 14% more productive and 23% more profitable.

Source: Gallup, State of the Global Workplace: 2022 Report.

 

Besides that, job seekers tend to prioritise companies with strong ethical practices. Therefore, the company’s reputation for caring about its staff can attract high-quality talent in the future.

Defusing tension and stress

Everyone knows stress can affect the people involved in a layoff – not only the dismissed workers, but also members of the HR team and remaining managers, who must notify the outgoing employees and deal with high emotions and tension among the remaining staff.

However, when your company provides outplacement, HR can feel relieved that experts will assist laid-off employees with moving to the next chapter in their careers. As we mentioned before, your surviving employees will notice the benefits of outplacement. Tensions will be lower and people will feel reassured about being treated with care and respect if a layoff ever impacts them.

Reducing the risk of legal action

Canadian law protects employees’ rights to file complaints or even pursue civil action if they feel their dismissal was wrongful or the company didn’t comply with its financial obligations. Whether their complaint is fair or not, going to court or defending itself with the Labour program can damage the company financially or reputationally. Also, seeing former staff suing the company might encourage other workers to do so, if they’re laid off in the future.

The organization might feel safer when outplacement services are available to laid-off employees. If the severance package includes this kind of support, the dismissed employees are likely to be more satisfied, so their relationship with their former company will be more peaceful, and, as a consequence, the risk of termination lawsuits will be mitigated.

Saving costs through a solid partnership

Although they can be traumatic experiences, layoffs are commonplace in the business world. For that reason, your organization must be 100% ready when the time comes to strategize and execute one. So, be sure you’re choosing the right outplacement firm as your partner, since they’ll need to provide you with knowledge and expertise to conduct the process efficiently.

You should also consider the difference outplacement can make to your bottom line. For example, the sooner outgoing employees find new work, the lower their unemployment costs will be. Besides, including outplacement in severance packages can serve as a bargaining tool when negotiating compensations so that you can offer less costly benefits to terminated employees.

That’s why hiring a modern outplacement partner with unlimited virtual outplacement support – like Careerminds, which won’t charge you retainer fees, by the way – means helping your employees find new work sooner and saving you even more money.

What are the disadvantages of outplacement?

There’s no question that the benefits of outplacement far surpass its disadvantages. However, it doesn’t hurt to be on the safe side and understand the scenarios in which that might not be the best option. Let’s look at the most common reasons outplacement is not the way to go.

Spending money unnecessarily

This is the most common disadvantage of offering outplacement services, especially when you pick an old-fashioned partner that is not in line with the current best practices and innovations in this area. Those firms will charge you retainer fees or restrict their offerings, negatively impacting the efforts of your former employees to find their next meaningful jobs.

You won’t have any of that with modern, tech-driven outplacement firms like Careerminds. We won’t charge you retainer fees or use term limits in our services. We’ll offer unlimited services and support for your participating employees “until placement” – meaning until they land their new job.

Reinforcing your competitors with former staff

As we know now, using outplacement services means enabling employees to get back to work faster and, in many cases, placing experienced, knowledgeable people in other companies. In other words, you’ll be providing the competition with talent you built and fostered yourself. 

For sure, this situation might depend on the terms and conditions of the dismissed worker’s employment and severance agreements. However, even if they’re free to move wherever they want, the benefits of relying on a reliable outplacement firm to reduce your workforce smoothly while meeting your business goals easily surpass the issues this event might bring.

The benefits of outplacement: key takeaways

As we’ve seen in this article, offboarding is undoubtedly one of the most stressful episodes in an employee’s lifecycle. But by providing the dismissed individual with a comprehensive, effective outplacement service, you’ll be taking a giant step toward a peaceful, less damaging layoff.

Outplacement is a great element in any organization’s talent strategy. Your surviving staff will be reassured they’ll be taken care of if something happens to them, reducing stress levels across the board and reinforcing your company’s values about treating staff with a human approach. In the process, you’ll likely see higher engagement and retention levels and more productivity.

Your impacted employees will have a smoother career transition, preserving your company’s reputation and preventing future legal problems with wrongful dismissal suits. As your image as a business will be preserved, hiring new talent in the future will be easier since job seekers will respect your brand and do their best to join your organization.

All those benefits of outplacement must be in your mind when you search for the right partner. As we’ve also seen, trusting the wrong firm can bring undesired consequences, such as spending more money than needed on outplacement. You’ll be happy to know that, by switching to Careerminds, companies typically save 50-70% compared to their current outplacement providers. Those savings, of course, can be reinvested to develop and engage top talent, for example.

Want to learn more about the benefits of outplacement with Careerminds? Let’s chat! Click below to book a chat with one of our experts and discuss your organization’s outplacement needs.

Rafael Spuldar

Rafael Spuldar

In need of outplacement assistance?

At Careerminds, we care about people first. That’s why we offer personalized talent management solutions for every level at lower costs, globally.

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