Outplacement Industry Forecast 2nd Half 2009

June 24, 2009
In November 2008 we prepared an in-depth research review of the outplacement market resulting in The Insala Outplacement Industry Forecast for 2009. As this research was well received, and world economies are continuing to struggle, we are providing an updated Outplacement Industry Forecast – 2nd Half 2009. Read on to access the most recent, aggregated data on:
  • Continued outplacement industry growth – dramatic statistics
  • Outplacement – increasingly a standard offering; seen as adding value
  • Updated layoff projections and workers’ fears of job loss
  • Which employees are most affected by layoffs and who receives outplacement
  • Powerful technology solutions

The outplacement industry is continuing to see monumental growth. Below is a listing of outplacement providers reporting significant increases in business:
  • 100% increase in outplacement business this past year (Career Momentum Inc, Madison, WI)
  • 75% increase in career transition work in 2008 (Ayers Group, New York City, NY)
  • 72% increase in users of online outplacement program during 1st quarter 2009 (Insala, Dallas, TX)
  • 65% rise in outplacement revenue since the start of 2009 (Adecco, Switzerland)
  • 50% increase in business across the outplacement industry (Drake Beam Morin, New York, NY)
  • 39% increase in profit during fall 2008 (Right Management , Philadelphia, PA)
  • 35% increase in demand for outplacement, without advertising the service (Hartley People, Waterford, Ireland)

Companies have adopted outplacement as a standard benefit in their severance packages as reported by two prominent surveys: OUTPLACEMENT – SEEN AS VALUE-ADDING

It is no wonder outplacement has become a standard offering. It has been credited with improvements in employee morale, motivation, productivity, retention, and employer reputation as reported below:
  • 86% of surveyed organizations reported outplacement support provides value for money (HDA Outplacement Survey).
  • 66% of surveyed employers feel outplacement support improves morale, motivation and productivity during times of change (The Value of Outplacement, Reed Consulting)
  • 65% of surveyed employers agree that providing outplacement support for exiting staff helps retain remaining staff (The Value of Outplacement, Reed Consulting).

Many companies worldwide are continuing to project layoffs:
  • 30% of companies surveyed plan layoffs in 2009, as compared to 12% in 2008 (International Public Management Association for Human Resources, Fifth Annual Public Sector Employment Outlook Survey, January 2009).
  • 50% of employers surveyed from 23rd March to 6th April 2009 stated that they were either considering or were certain to make redundancies in the next 6 months (British Chambers of Commerce Monthly Business Survey, April 2009).
  • 51% of U.K. companies surveyed have already made or expect to make reductions in the headcount before summer 2009 (Ipsos MORI, Skills Shortages in Recession, November 2008).
  • 26% of employers have contingency plans to make new or further redundancies in the next 12 months in addition to those already planned (CIPD/KPMG Labour Market Outlook Redundancy Special at the end of 2008).
  • 25% of white-collar small businesses surveyed plan a reduction in force by June 2009 (TriNet Recession Practices Survey, March 2009).
  • Unemployment has increased by almost 33% since the economic downturn in the spring of 2008 according to the TUC. It is the same rate as 1979 when the 1980s downturn began.

The dramatic research below, from 5 different surveys conducted in the past year, shows the percentages of workers in various countries who are concerned about losing their jobs. With the projected layoffs reported above, it is no wonder.
  • 55% of Russians (Synovate Global Survey, yearend 2008)
  • 42% of Brazilians (Synovate Global Survey, yearend 2008)
  • 39% of Bulgarians (Synovate Global Survey, yearend 2008)
  • 69% of Americans (Addeco USA, Workplace Insights Survey, yearend 2008)
  • 51% of British (Career Energy, U.K., February 2009)
  • 65% of Middle Easterners (Job Situation in Recession, Bayt.com, April 2009)
  • 23% of Canadians (Workplace Blues Survey, Harris-Decima/Everest College, yearend 2008)

According to recent research, women and people over 50 seem to be most affected by the recent waves of layoffs:
  • The female redundancy rate has risen by 2.3% since last year, almost double the rate for men (Women and Recession, Trades Union Congress, January 2009).
  • 28% aged over 50 feared their age would see them forced out of jobs if their employer decided to reduce headcount due to the economic downturn (Recession threat to older workers and retirement plans, Age Concern, May 2009).
  • Job losses have fallen most heavily on the lowest paid employees according to TUC).

With more and more companies offering outplacement to their exiting employees, the services vary depending on the employee’s organizational level as show by the research below:
  • 69% of organizations offer outplacement services to executives compared to 57% for professional/technical employees and 49% for clerical/ technician workers (Mercer U.S. Severance and Strategy Survey, April 2009).
  • More than 75% of surveyed organizations provide different program structures depending on the employee's level within the organization (2008 HDA Outplacement Survey).
Lee Hecht Harrison’s 2008-2009 Severance & Separation Practices Benchmark Study reported the following:
  • 67% of companies offer outplacement services to all officers and executives
  • 65% of companies offer outplacement services to all executives
  • 55% of companies offer outplacement services to all exempt employees

As more companies offer outplacement services to their employees, the size and shape of those services are changing. As outplacement has become a necessary cost of “doing good business,” companies are looking for cheaper ways to access the service. Below are some general trends:
  • Shorter program lengths
  • Virtual programs - decreasing need for physical office space
  • Increased use of technology – career transition technology portals
  • Personalized Transition– Employees and companies have been pushing for “non-cookie-cutter” support. New service models are evolving which share the following characteristics:
    1. A move toward equal partnerships between former employees and employers
    2. Socially responsible and compassionate behavior
    3. Greater choices when it comes to outplacement delivery methods, including increased use of technology
    4. More emphasis on personalized one-on-one career guidance
    5. Access to tools to develop critical skills
    6. Special content matched to careers
    7. Tailoring services to employees in areas that matter most to them
    8. Increased accountability – employees want to remain continuously connected until successful outcomes are reached

The research is clear – the opportunities are increasing for outplacement providers. The critical factors converging to create this climate of growth are:
  • Massive layoffs continue to be projected
  • Outplacement becoming a standard company offering
  • Outplacement seen as adding value for the money
The outplacement firms which stand to gain the most will be the ones that adjust to the changing demands in the market. Personalized transition support coupled with technology tools will be key.

Do you currently have these components solidly in place? Are they available in an easily accessible and efficient manner, enabling you to increase the amount of business you can handle? Are you poised to quickly take on more clients? If not, consider boosting your services with Insala’s cost-effective, easily accessible online career transition program, EmploymentTalk™ that provides numerous resources to help support employees in transition. It successfully provides the majority of components employers are looking for, including world class assessment instruments, a powerful automated tool for CV/Resume development, and excellent content on interview skills, resume development and more – all accessible 24/7 in a secure and confidential environment.

And, along with the growth underway in the outplacement industry, we have experienced a 72% increase in new users of our EmploymentTalk™ outplacement software in the first quarter of 2009 (for further information, read the press release). If you currently don’t have online services, or the ones you have aren’t meeting your needs, request a live demo to learn more.

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