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Why Outplacement Matters in an Age of Disruption

We have the lowest unemployment in the past 48 years, yet General Motors announced that they need to lay off about 14,000 employees.

We continue to be in a technology boom, yet companies like Citrix, Qualcomm, Oracle, and Microsoft all have announced or are rumored to be considering layoffs.

The reason that layoffs are happening in one of the best economic climates we have had in years is that the rate of business disruption is accelerating, and smart leaders know that they have to change or face the consequences.

This is why I believe that outplacement services matter more than ever.

Organizations need to adapt and change to be in front of the disruptive market forces that could rattle their business model to the core.

The leaders at General Motor did not want to destroy the holidays and careers of 14,000 employees. These leaders recognized that they were behind the business curve when it comes to the continuing consumer preference for SUVs and a future where ride sharing may lessen the dependence on vehicle ownership.

General Motors could have played the nice employer kept the plants open – and risk an even more catastrophic future of even greater layoffs. They made the smart, but tough, decision.

Decisions like the one General Motors is doing are necessary. Organizations need to adapt or die. They need to objectively look at potential disruption that can impact their business model and take the proactive measures necessary for their long-term growth (and survival).

One important factor in all of this: What is the impact on the employees?

Employees are More Than Line Item Expenses

We want to treat our former colleagues with respect, dignity, and compassion. Workforce reductions or even performance-related departures are never easy. These layoffs involve people who are our friends, longtime associates, mentors, and collaborators.

While the business rationale for downsizing may involve cost reduction, consolidation, or business liquidation, we cannot separate the accounting/finance part of the decision from the personal impact that it has on the individuals involved.

We Want to Always be Building Networks, not Walls

I believe there is a major opportunity to display forward-thinking leadership by how an organization implements a workforce reduction. Providing outplacement assistance is recognition from management that while the decision is necessary, they recognize that their responsibility to the employees involved goes beyond their last official day of employment.

Displaced employees represent potential networking opportunities that can benefit the firm. They can be sources of new business, strategic alliances, potential talent that can be rehired, and ambassadors for the company.

Corporate outplacement services can help former employees find a new position faster than doing it on their own. Outplacement has also been proven to help candidates negotiate better compensation packages. The net result is that many outplacement candidates end up in a better place and can put their experience in a more positive light.

A great way to think of former employees is thinking of them as alumni. They can help companies with positive word of mouth. I recently listened to a great webinar by William Tincup, who said: “It’s your brand. You have to own what your former and current employers say about you. It is important to treat people as well when they leave as when we are recruiting them. The relationship is for the long term.”

A great example of this type of networking taking place today is within Silicon Valley. The culture that has developed within the Valley is one of collaboration and networking – where strategic alliances are routinely made with alumni of former companies.

This culture would grind to a halt if companies treated their employees poorly during their exit. What you would see would be more grudge/retribution behavior rather than working towards a mutual gain.

Employer Branding Matters

The robust economy that we are now in is a reminder to every leader that employer branding is essential for talent acquisition – reviews on Glassdoor.com that blast the company management will provide a big-time disincentive to potential hires. Being dismissive about what is said about your company online is taking the express lane to irrelevancy.

The consultants at my firm have worked with hundreds of people who were understanding and appreciative of the outplacement assistance that their firm provided them.

They correctly realized that their job loss was due to a business decision that was not related to their performance. The steps their former company took to help them get through their transition showed that the company knows how to do the right thing.

Summing it all up

It is a safe bet to predict that the pace of change and disruption will only accelerate. Business leaders will need to be agile in their decisions, and some of the actions they take may involve a workforce reduction.

I hope they do not let their employees fall through the cracks and that the employees receive the help they need to move on to their next opportunity.