Articles & Insights

WT in the Press: The business case for outplacement

Added - 22/04/2021

Author: Lynne Hardman, CEO of Working Transitions
Publication: HRNews 
You may also be interested in Outplacement and Managing Change

After a challenging year, change is inevitable. As of February 2021, atleast 4.7 million workers were on a furlough scheme. Not all of these workers will have jobs to return to as businesses try and adjust to a ‘new normal.’ Many businesses will be making these redundancies to cut costs.


Investing in outplacement support can therefore feel at odds with the organisational objective. It can feel especially difficult when budgets are being cut – according to the 2021 Gartner HR Budget and Staffing Survey, over one-third (34%) of HR leaders plan to decrease the HR function budgets this year. So, is there a business case for investing in outplacement, when budgets are low and future recruitment is likely?

The psychological contract

According the CIPR, the term ‘psychological contract’ refers to ‘individuals’ expectations, beliefs, ambitions and obligations, as perceived by the employer and the worker.’ The concept emerged in the early 1960s and, in addition to the actual employment contract, it is core to understanding the employment relationship.


Companies that provide outplacement support as part of their redundancy programme often find that it can lower the ‘emotional temperature’ across their organisation. By fully supporting exiting employees, businesses demonstrate both to them, and to those who remain, that despite the current challenging circumstances that they value employees and are committed to their wellbeing.

Individuals all react differently to change – some employees may be relatively unfazed but for others, particularly long serving employees, redundancy can initially appear catastrophic.

Typically, individuals faced with change undergo a rollercoaster of emotions – from anxiety to denial and fear. Providing outplacement support can help individuals navigate this range of emotions and face the future with renewed focus and positivity


Properly supporting employees as they move through outplacement demonstrates that, despite everything, their service is valued and that supporting them into their next role – or stage of life is important to you as an organisation. This tangible evidence that their employer cares and values all employees sends a powerful message to those who remain.


For those remaining, it can be reassuring to know that if they find themselves in a similar situation, they are likely to receive the same support and consideration.

Maintaining productivity

Downsizing a workforce must be handled with tact and care. University studies have found a clear correlation between companies making layoffs, those that don’t and those that end up filing for bankruptcy. The reason? The drop in morale and productivity the employees that get left behind.

Looking after retained employees is a key component of an outplacement programme. Well-timed support, with a reassuring and focused place for addressing worries, is absolutely crucial to keeping employees positive and engaged.


Change naturally makes people feel anxious and unsettled – leading them to explore the external marketplace. Providing good career transition support, especially if there are some redeployment opportunities, helps you to retain skilled employees that are critical to future business success.


Reputation protection


Last year we commissioned a survey of office workers to get insight into how they feel current and past employers had handled transition and change. Over half (52 per cent) of them felt that they had handled the initial stage of workplace transition, ‘Poorly’ or ‘Extremely Poorly’ with 48 per cent regarding the communication during this period as ‘Poor’ or ‘Very Poor’.


The human impact of workplace transition – particularly where there is no support provided – is often underestimated by employers but with the growth of social media and online review sites such as Glassdoor it should not be taken lightly – employer reputation is at stake. No wonder, 90 per cent of HR managers said there is a connection between offboarding and the number and severity of negative social media reviews.


When you have a strong employer brand, you attract great people, innovative ideas, and, ultimately more business for your organisation. It may seem counter intuitive but helping people to leave the organisation well can reinforce a good employer brand.


Outplacement is not a one size fits all purchase, to obtain maximum ROI it’s important to ensure that you provide truly flexible options that meet your organisational and employee needs. Everyone responds differently to change and that their needs and circumstances will vary. The approach must be flexible, tailored to meet the objectives of all stakeholders.


A well-structured outplacement programme can quickly deliver benefits to a large number of employees – regardless of geographical location – at a relatively low cost and is always worth the investment.

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