The ONS the Office of National Statistics in the UK reported an estimated unemployment rate of 4.9%, 1.2 percentage points higher than a year earlier and 0.7 percentage points higher than the previous quarter. According to market experts, this is just the beginning. The economy is basically on life support through the 200 billion-plus spent by the government so far, which has alleviated a lot of the pain. However, this level of support is not sustainable, and that as the generosity of these programs like furlough decrease over the coming year, unemployment is set to increase to between 2.5 million and 3.5 million on a best worst-case scenario. Subsequently, many people will either go on to universal credit or seek new job opportunities. What does this mean for employers who need to make staff redundant?
Outplacement is a term for career transition support that companies give to their departing employees. It is a form of assistance provided by respectable firms to redundant employees in finding new employment, either as a benefit provided by the employer directly or through a specialist service. With that in mind, below are a few of the benefits of outplacement support.
- Protecting productivity
The first benefit is protecting productivity. On average, in a normal scenario, the UK suffers from a 340-billion-pound loss every year in employee disengagement. That could be in, lost training and recruitment costs, sick days, productivity, creativity and innovation. When you add a redundancy situation to it, the employee morale gets affected and more losses are incurred.
Offering the outplacement support in any form or shape will affirm HR's commitment to the retained employees, not only to the departing employees because retained employees will model the situation in case they are made redundant in the future.
- Return on investment
The ROI was measured by closely tracking productivity and performance among remaining employees following a layoff and comparing them to prior layoff scenarios in the absence of support. If you take a scenario where outplacement support was given, versus another scenario where outplacement support has not been given, a study in the Journal of Economy and Society has revealed that the return on investment for outplacement support is higher in the first case.
- Brand Perception
Why is brand perception so critically important, both internally and externally? People don't want to buy products from companies who have a bad reputation for treating employees. Now more than ever before, job seekers tend to research the company before accepting any offers. They do their research about their company, its reputation on websites Glassdoor and review how the culture is and how HR treats employees.A CEO or an HR director and a CFO, cannot only think about this immediate crisis. They need to think about that company in five years’ time when the cycle comes around again.
- Preventing loss of talent
If the brand and the culture are affected badly, the existing talent that is staying will also feel threatened and might leave to a competitor or to another supplier. Consequently, the position of the firm in the markets might change. Some companies are now providing outplacement support as part of a benefit in the recruitment package. This reflects the company’s investment in its employees’ professional development, physical, emotional, and financial well-being, and indicates a desirable company culture.
- Avoidance of legal battles
Outplacement support increases the speed of transition. Individuals tend to find work 50% quicker if offered outplacement and the whole legal battle area is reduced.
There has never been a better time to reconsider outplacement support for your staff. A combination of simple, effective results focused on high quality and value to candidates is a great way to enhance your brand reputation, prevent loss of talent and avoid legal battles.
Linda Ghusayni is a Director at Transition Peak Limited. Transition Peak is an online career coaching and training portal that helps corporations look after their departing staff. Training material can be bought as a package or as individual modules. Learn more about Transition Peak and the team here. For the latest career advice. Sign up to their newsletter here. Connect on LinkedIn here