What is outplacement? Everything you need to know about the people involved, the benefits and the costs

Outplacement is “career reorientation and job search consultancy”. The aim of this consultancy is to support employees affected by staff reduction in their search for a new job and thus to avoid unemployment. In a mostly comprehensive consultation, competencies and strengths are identified, the next career step is defined, convincing applications as well as job interviews are prepared. Outplacement consultancy is much more than “job application training,” because career alternatives to the previous job can also be developed.

Outplacement is a consulting service financed by the employer for employees who leave the company due to redundancy or a termination agreement.

Why is there outplacement?

If a company is downsizing or the management wants to part with particular employees, outplacement supports the affected staff in their professional reorientation and job search. The goal of an outplacement consultation is to support employees in continuing employment as soon as possible – but in a different company. In most cases, “a new permanent position” is the consulting goal, but sometimes self-employment is as well.

Departing employees benefit from the application strategies developed together with our outplacement specialists.

The reasons why companies have to reduce their staff and lay off employees can be manifold, e.g.:

  • Company takeovers
  • Relocation of jobs to other sites
  • Sales difficulties
  • Insolvencies
  • Rationalization

How does outplacement work?

The idea behind the service: Especially staff with a long service record often lack awareness of their own strengths and competencies as well as up-to-date knowledge on the subject of job applications and job searches.

Within the framework of outplacement consulting, employees who (have to) leave their employer are systematically prepared for the upcoming reorientation and intensively accompanied during the actual job search. They have, so to speak, an application expert, a motivator and a coach at their side.

An outplacement consultation can include the following services:

  • Individual consultations with an experienced outplacement professional
  • Seminars and workshops (also virtually as webinars)
  • Personality diagnostics
  • Creation of social media profile
  • Video training job interviews
  • Job reference
  • Employment contract
  • Coaching during the probationary period

What are the benefits of outplacement?

Employees benefit from outplacement consultancy in the following ways:

  • Clarity and certainty regarding their professional competencies, strengths and interests
  • Shortened application phase and better chances on the job market
  • Motivation and structured approach during the phase of professional reorientation and job search
  • Long-term increase in attractiveness as an applicant and employee
  • Contribution to securing one’s livelihood – especially in an economically strained situation
  • Job guarantee depending on the outplacement program

 

The following advantages result for employers:

  • Avoidance of long-term legal disputes
  • Avoidance of redundancies due to higher acceptance of termination agreements
  • Cost savings through shortening of remaining contract terms
  • Positive effect on morale and productivity of employees remaining in the company (“survivors”)
  • Avoidance of negative employee evaluations in employer evaluation portals (e.g. kununu, glassdoor)
  • Positive impact on employer branding and corporate image

What is the difference between success rate / placement rate of outplacement?

The term “placement rate” is not particularly accurate, since outplacement consultants are not RECRUITERS, but rather equip their clients for the application process and accompany and actively support them in the implementation. We therefore prefer to speak of “success rate”.

Basically, the duration of a reorientation varies. It depends on the one hand on the outplacement participants themselves (education, work experience, age, objectives and motivation, and time commitment for the job search) but also on external factors (regional labour market situation, industry trends and general economic situation).

There are very different outplacement programs, varying in duration and intensity of consultation. It is obvious that an 8-hour consulting program cannot achieve the same results as a 6-month program.

According to a market study, two thirds of outplacement clients start a new job after six months at the latest.

What outplacement programs are there?

Basically, a distinction can be made between individual outplacement and group outplacement. In individual outplacement, outplacement clients are advised individually in one-on-one meetings. Depending on the outplacement provider, workshops can also be used as an option. A market study shows that a good half of all outplacement clients are accompanied in individual consultations.

In individual outplacement, a distinction can be made between hourly and monthly programs. Monthly programs run for a period of three, six or twelve months. During the duration of the program, the client can usually access the consultant as needed.

In individual programs unlimited in time, sometimes called guarantee programs, clients are consulted until they reach the agreed-upon goal. This may be full preparation for the job application process, signing a new employment contract, or successfully completing the probationary period.

Individual programs have the advantage that they can be tailored to the client’s individual needs, both in terms of content and time.

Group outplacement is used when a company makes a major staff reduction. A group outplacement can consist of individual workshops or a combination of workshops and individual meetings.

Who gets outplacement consultancy?

Outplacement is not aimed at a specific group of employees. In principle, everyone can benefit from this consultancy – regardless of education, hierarchical level, income level and length of service.

In practice, however, employers and employee representatives (works council/staff council) determine which employee group is offered outplacement consultancy and to what extent. There are often gradations according to hierarchical level, age or length of service.

However, outplacement consulting can also be used in individual separation situations. For example, if the requirements profile of a position and the competence profile of an employee no longer match, or if there has been a change in management or strategy.

A market study shows that the average age of an outplacement client is 49.

In general, the requirements for participation in outplacement consulting can be summarized as follows:

  • Redundancy or acceptance of a termination agreement
  • Employer finances the outplacement consultancy – either as part of the severance package or as a separate budget
  • Willingness of the person concerned to be supported in the job search and reorientation process
  • A “healthy” personality, no substance abuse, etc.

What does outplacement consulting cost?

Since there are very different programs, the costs vary accordingly. According to a market study, the costs for an unlimited consulting program among the outplacement market leaders range from 18 to 22% of the client’s last gross annual salary. The average cost of a 12-month outplacement program ranges from €15,000 to €18,000.

Correspondingly, consulting programs with a defined number of hours are less expensive.

The outplacement professionals of Outplacement-Consultings.de work 100% independently of large consulting firms. That provides on the one hand for a stronger focus on the individual situation and objectives of their clients, on the other hand it also affects their consulting fee. For example, some consultants offer monthly programs starting at 5,000€.

The invoice recipient is usually the client’s sponsor (usually their former employer).

The phases of an outplacement consultation

Anyone who reads up on outplacement quickly realizes that there is no ONE outplacement model. Some consultants divide their consulting into phases, others use step models. Basically, professional outplacement consulting should include the following:

  1. An initial analysis and assessment of the outplacement clients’ professional and private situation. This includes their experience and qualifications, strengths and successes, as well as personal values and interests.
  2. This is followed by a “look into the future”: What ideas and wishes does the client have? What general conditions promote or hinder the job search? What opportunities does the current job market offer? In short: What kind of job or responsibility is the client looking for?
  3. The development of a suitable application strategy follows. This includes the creation of meaningful application materials (resumé, cover letter, brief profile, social media profile).
  4. Active implementation of the application strategy on the job market: Preparation for telephone and video interviews as well as personal interviews; effective use of job fairs, recruitment agencies/personnel consultancies.
  5. In the last phase, the outplacement client is supported in salary negotiations and the conclusion of a new employment contract. Depending on the outplacement program, this is followed by preparation for and support during the probationary period.

What qualifications, skills and expertise should an outplacement consultant have?

A service, especially in the consulting field, is as good as the person who performs it. This leads straight to the critical examination and definition of the criteria that are important for this specific service. A precisely defined suitability profile for outplacement consultants cannot not found in the literature. This applies analogously to the missing requirement profile for management consultants.

Both terms are not legally protected, and there is no defined vocational training.

An academic education can be seen as a prerequisite for outplacement consulting. It is secondary whether the consultant has a degree in law, economics, psychology or the humanities.

An academic background is usually required as the majority of candidates have graduated themselves and appreciate an interlocutor who is their equal in terms of education.

In addition to a high level of interest in politics, economics and social affairs, a broad general knowledge is just as essential as sound professional experience, i.e., numerous years of practical work in companies in as many different industries as possible and management experience in a variety of positions are ideal. This is highly appreciated by many candidates as they want a consultant who is also seen as competent in many respects.

It is not uncommon for political and economic contexts to be addressed during the consulting sessions, which might have a significant impact on the reorientation. The consultant should always be up to date and able to offer reasonable suggestions. Likewise, an activity as a manager, recruiter or HR consultant, even if only for a short time, is appreciated, i.e., the consultant has also got to know “the other side” once.

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