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Business Times
07 April 2015
COMMENTARY
Understanding the need for outplacement
By
Paul Heng
TO small and medium-sized enterprise (SME) owners, finding the right type and number of talent to hire can be a challenge. This applies to both skilled and unskilled workers. Considering that it is relatively easy to register a business in Singapore, it seems a shame that bosses are sometimes handicapped by the difficulty in finding the people to help them run the business.
At the other end of the spectrum, there are also challenges related to the "letting go" of employees. Most SMEs are likely to be growing, and therefore should be doing more hiring than firing, but there are situations where bosses have to bite the bullet and retrench employees, or terminate their services for various reasons.
Here are some typical situations:
• Changes in requirement of skills set;
• Costs management;
• Gap in the level of skills competency;
• Reached the apex of one's potential and are of limited value to the business;
• Misalignment of values;
• Lack of self-motivation;
• Unable to work well with others/adapt to immediate boss's working style/values, etc.
Technically, what the company needs to do is to exercise the break clause in individual employment contracts. In some cases, the company might not have a business need, or do not wish the employee to come into the office again. In such cases, the employee is paid a sum of money in lieu of the termination service.
In addition to fulfilling all contractual obligations, the boss may decide to also support the employee's career transition and hire the services of an outplacement consultant.
I have been in the outplacement industry for over 18 years. However, I am never surprised that there are people who do not fully understand what an outplacement consultant does. We are often mistaken as headhunters. We work with corporate clients who are moving employees out, whereas a headhunter is typically paid to find talent.
Here in Asia, the outplacement industry has reached a stage of maturity. However, there are only a handful of outplacement consultancy agencies, that is, those that offer outplacement support as their mainstay business, versus the hundreds of recruitment/headhunting firms.
As a concept, outplacement started from the US at least five decades ago. Someone saw a need in the market to provide resume-writing support to employees who have been made redundant or fired, giving birth to a new industry. The chief motivation for companies to provide outplacement support to departing employees then, was simply to mitigate the risks of being sued for wrongful dismissal, etc, and to ease the bosses' conscience.
In a nutshell, the typical outplacement consultant will provide both emotional (over job loss) and practical support to company-sponsored clients - individuals who have been outplaced by their employer. The practical support is typically in the areas of resume writing, interview skills, job search strategies, for example how to position one's profile, using LinkedIn and other social platforms, and job-search related support. I term this "giving clients the skills and knowledge to fish for another job".
This "fishing" support is still being provided by some outplacement agencies. Others tailor their programme delivery with a twist - the outplacement consultant in these agencies actually "go fishing with their clients". This means that they also function as a job-search coach - extending their personal network of contacts to their clients, and in the process, adding greater value to their clients' transition by uncovering more job leads.
Some search/recruitment agencies are playing this to their advantage, especially during a period of low recruitment activities. Overnight, these agencies add outplacement support to their business offerings. Typically, they can end up being paid by the corporate clients that are outplacing their employees, by flipping these outplaced individuals and placing them with hiring clients - hence receiving fees from both sets of clients.
Perfectly legitimate - the only downside is a potential conflict of interest whereby the recruiting arm of such agencies might not be fielding the "best-fit" candidates to their hiring clients. From the perspective of the outplaced individual, they may be missing out on job leads in the market place, especially if they themselves are not well-networked.
Some outplacement agencies have brought the concept to a higher plane - adding even greater value to career transitioning clients. In such firms, a typical outplacement programme would include, in addition to the emotional and practical support mentioned earlier, coaching in the following areas:
• Career planning - what each participant has done in the past, what they are doing today, and what might be possible options, moving forward;
• This would include a Plan B - what one does post-corporate life. This is not quite "retirement planning", but more akin to doing a different set of things that typically looks very different from what one does in the corporate world;
• Exploring the possibility of entrepreneurship.
Given that outplacement is not legally required, why do companies pay for such services for employees who are leaving? The answer is simply the desire to preserve their corporate image and branding. Singapore is really a small place, and most of what a business does (both good and bad) eventually gets around to others, both internal and external to the business.
If you have a business need to release employees from the payroll and wish to do more than just pay them off, for instance by providing professional outplacement support, your image and reputation as a caring company/boss will be known in the market place. Further down the road, when you have a need to hire again, people will tend to remember how you treated employees on the way out, and draw the (right) conclusion that you are a boss/company worth working with. In an economy where human capital is a key asset, this reputation counts for a lot in the war to attract talent.
The writer is the founder and managing director of NeXT Career Consulting Group
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