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Article from Train Magazine, August 1999
Outplacement – Option or Necessity?
Outplacement was ‘founded’ by an American, James Challenger, who incidentally was terminated from his job. He found out, by chance, that there was money to be made from providing resume-writing services and job search assistance to people who had also lost their jobs. He then went on to establish one of the largest outplacement businesses in the U.S. today.
Unlike search companies, outplacement firms are paid for their services by the outplacing company and not the hiring company. In its original form, outplacement support is provided to terminated employees to assist them in their career transition. In other words, outplacement provides support at three levels: emotional (on coping with job loss), infrastructural (provision of interim office and secretarial support) and job search guidance and assistance. This concept has not changed much today.
How It Works
The typical outplacement process involves several sequential activities. Skills listing and identification of the next preferred station in life are the initial steps. Psychometric tools may be used in these phases. Not everyone desires to return to the corporate world and some may decide to venture out on their own. Many an entrepreneur was born that way.
In the event that job search is the preferred direction, a systematic analysis is done to uncover potential industries that could be keen to hire the particular types of experience and skills possessed by the job seeker. Potential hiring companies are then identified and a series of phone calls or letters dispatched to the appropriate party in those companies. Thus, related marketing documents such as the resume and cover letters are developed. Interviewing skills are sharpened and the intricacies of networking shared with the outplaced candidate.
Where the setting up of a new business is to be explored, another set of tools aimed at helping the individual determine whether he has what it takes to go it alone are used. These could be as fundamental as checking the bank account to see how long one can last without a regular income but the same monthly commitments and bills. Or whether the candidate has the necessary inclination to sales and marketing. Networking and talking to people who have gone the same route will also be arranged. Lastly, talking to professionals such as accountants and bankers could also guide the potential entrepreneur into making the decision to go ahead or revert for a livelihood in the corporate world.
Why Outplacement, or the Lack of It?
Compared to the U.S. and Europe, the provision of outplacement support to terminated employees is relatively new to companies in Asia. A handful of professional outplacement firms can mainly be found in Singapore, Hong Kong and Japan. In this context, ‘professional’ simply refers to companies that provide the service as their core business to only corporate clients.
The fact that there are over 300 search/employment agencies compared to only about five outplacement firms in Singapore confirms that the outplacement market has plenty of room for development. Also, unlike in Asia, outplacement firms in the west tend to have many offices and branches within the same country and beyond. This stems from the fact that most Asian countries are small in physical size compared to the U.S. or U.K.
Possibly, the principal reason why relatively few Asian-owned firms provide outplacement benefits is that there are no regulations requiring them to do so. Peripheral reasons could be the high costs of providing such a benefit. The issue of costs puzzles some because more and more local firms are using the services of headhunters to locate talent. Comparatively, we are talking about 30 per cent of annual cash as the fee for headhunters vs. 15 per cent of the outplacement firm.
Another reason could be that, compared to headhunting, outplacement is a relatively new concept. It was only during the recent Asian economic crisis that outplacement firms received media publicity in Singapore, and more people got to hear about it for the first time, and understand its concept and usefulness.
Multinationals with their headquarters in the U.S. or Europe are generally the ones that believe in and provide outplacement support to departing employees. It is important to clarify here that outplaced employees do not equate ‘bad’ workers. Usually, the cause for their losing their jobs is due to economic or business reasons. Other factors could be mergers and acquisitions where duplication of jobs usually result, and changes in senior management terms.
Besides wanting to minimize the prospects of a legal suit against wrongful dismissal or discrimination, MNCs do want to help these people in easing their way out of the company and move on smoothly to their next challenge. Preserving the company’s image and reputation as a premier employer is another common reason.
New Trends
Here in Asia, there has been an increase in the number of employers seeking outplacement support for relatively junior-level employees. This is encouraging, especially when this group of people can sometimes be in greater need of assistance than their more well-networked and connected senior-level colleagues.
The economic crisis has resulted in a dearth of jobs in the labour market as companies are either downsizing or freezing headcount. Hence, the norm is for outplacing companies to opt for longer-term support programmes where outplacement companies work with candidates until such time that their new challenges are secured. However, these ‘unlimited supported’ programmes cost much more than the shorter one- to three-month types.
There is a growing trend for well-informed and forward-looking employers to invest in outplacement support for departing employees, in addition to the severance package. This is especially so in companies where key decision makers have had prior exposure to western management styles and practices. Not wanting to be labelled an uncaring employer could be another motivating factor. When the economy bounces back and hiring of talent resumes, it is imperative that they remain capable of attracting them, especially so when we are relative resources-scarce and human capital count as the key resource for corporate growth and prosperity. The outplacement firms that will eventually do well and stand above the crowd are the ones that specialize, and provide the service as a core business activity. Employment agencies that claim capability when all they do is try to find jobs for the jobless, and end up getting paid by both the outplacing company and the new employer, will not be around for long. These are the ones that are currently soiling the professional market with their cut-throat pricing – not to mention the unfortunate candidates that are sent their way by companies wanting to spend as little as possible – since they still derive their main source of revenue from the placement business. Some even go to the extent of merely providing office space and the use of communication tools, ie. Phones and faxes.
Preparing for Your Next Move
It is important for terminated employees to remember that they are one among thousands of people who, at one time or another, have found themselves without a job. Losing a job can be a blessing in disguise. Often, we need a jarring shove out of our comfort zones, those places in life and work that we can easily nestle into and never attempt to leave. You don’t find out the stuff you’re made of when you stay with the familiar. Even if no outplacement support has been provided by the former employer, terminated employees should bear these in mind while preparing for their next move:
1. Try not to panic.
Panic causes us to lose perspective and put us in the wrong frame of mind for making decisions and taking appropriate actions.
2. Do a reality check.
Remind yourself that losing a job doesn’t mean you‘ve lost your abilities or talents. Look out for new opportunities in even the most unlikely scenarios – don’t limit yourself.
3. Guard against depression.
Depression injects us with an attitude of defeatism and denial. With that frame of mind, it is almost impossible to spot and utilize a good opportunity when it comes along.
4. Stay physically healthy.
You are more vulnerable to illness when absorbed by pessimistic thoughts about your future or bitterness about the past.
5. Avoid bitterness and backbiting.
Don’t give in to the temptation to berate your former employer or anyone else you believe is at fault. This kind of behaviour only damages your reputation and makes you look petty.
6. Don’t jump at the wrong job too soon.
Don’t jump before you know where you will land, or you might find yourself in the same position as before, with more anger and fear, and less money than before.
7. Don’t slow down you job search just because you have a few possible opportunities.
Until you‘re sure the position has been offered to you, keep on searching. Go on as many interviews as possible because you never know when you might find something even better, or make contacts for future jobs.
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