Outplacement: The New Opportunity For Recruiters

July 06, 2009
Have you considered expanding into the outplacement market? This research-based article provides factual data from the most current prominent studies – outlining a compelling business opportunity for recruiters. Learn statistics about:
  • outplacement industry growth/recruitment industry decline
  • outplacement - now a standard offering; seen as adding value
  • layoff projections and worker’s fears of job loss
  • which employees are most affected by layoffs and who receives outplacement
  • powerful technology solutions
You have contacts, interpersonal skills, knowledge of job functions and industries - the perfect skill set for an outplacement provider. Make a fact-based decision to not only survive, but excel in these challenging times. Read on...

OUTPLACEMENT INDUSTRY BOOMING

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)
RECRUITMENT INDUSTRY HURTING

There is no question that the recruiting industry has undergone a serious decline. Consider the following data from the Recruitment Industry Benchmark (RIB) in May 2009:
  • 5 years' growth has been wiped off recruitment firms' permanent revenues, as turnover has dropped by 2.3 bn in 12 months
  • Recruiters’ permanent revenue fell by 53.2% compared with the previous year, reverting back to 2004 levels
It is likely you are living your own set of depressing statistics. The following headlines tell the story: OUTPLACEMENT – NOW A STANDARD OFFERING

As the recruiting market continues to spiral downward, the outplacement market offers security. Companies have adopted outplacement as a standard benefit in their severance packages as reported by two prominent surveys:
  • 81% of surveyed organizations that have experienced recent restructuring offered outplacement support to employees (2008 HDA Outplacement Survey)
  • 71.4% of employers surveyed provided outplacement or other support services to workers losing their jobs (IRS survey, 2009).
OUTPLACEMENT – SEEN AS ADDING VALUE

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 organisations reported outplacement support provides value for money (2008 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)
  • 78% of surveyed employers feel that providing outplacement could improve the organization’s reputation (The Value of Outplacement, Reed Consulting)
  • 55% of surveyed employers believe that outplacement can help the organization be seen as an employer of choice (The Value of Outplacement, Reed Consulting)
MORE LAYOFFS/REDUNDANCIES LOOMING

It is the perfect time to enter the outplacement market – it is not too late. Many companies worldwide are continuing to project layoffs:
  • 30% percent of companies surveyed plan layoffs in 2009; in 2008 that number was 12% (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).
GLOBALLY WORKERS FEAR LOSING THEIR JOBS

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.
  • Synovate Global Survey, yearend 2008 - 55% of Russians, 42% of Brazilians, 39% of Bulgarians, 24% of Americans
  • Addeco USA, Workplace Insights Survey, yearend 2008 - 69% of Americans
  • Career Energy, U.K., February 2009 - 51% of British
  • Job Situation in the Recession, Bayt.com, April 2009 - 65% of Middle Easterners
  • Workplace Blues Survey, Harris-Decima/Everest College, yearend 2008 - 23% of Canadians
WHICH EMPLOYEES ARE MOST AFFECTED BY LAYOFFS/REDUNDANCIES?

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)
WHICH EMPLOYEES RECEIVE OUTPLACEMENT SERVICES?

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)
MARKET DEMANDING CHANGES IN OUTPLACEMENT SERVICE DELIVERY

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 - Many outplacement firms have been forced to offer shorter programs. For example, in the 1980s, a mid-level manager may have routinely received 6 months of outplacement support, while now the same manager might receive 1-2 months of support.

  • Decreased usage of office space – More and more outplaced individuals are choosing to perform career transition activities from home instead of utilizing office space provided by the outplacement firm. Consequently many firms are downsizing their physical office space and offering virtual career transition programs
  • Increased use of technology – More and more outplaced individuals are using technology to support their career transition. Consequently most firms are offering technology portals which can be accessed from home.
  • 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
POWERFUL OUTPLACEMENT TECHNOLOGY SOLUTIONS TO SUPPLEMENT YOUR RECRUITING BUSINESS

The research is clear – opportunities are increasing in the outplacement space, and you are poised to take advantage of them. Recruiting firms who stand the most to gain are those who adjust to the changing demands in the marketplace.

 

Within 30 days, you can be offering outplacement services supported by Insala’s world-class, cost-effective, easily accessible EmploymentTalk™ online career transition program. Instantaneously provide numerous resources to help support employees in transition, including world class assessment instruments, a powerful automated tool for CV/Resume development and excellent resources on interview skills, resume development, a Global Career Research Engine and more – all accessible 24/7 in a secure and confidential environment – branded to your business.

Related News: New Users of Outplacement Technology Spike in Q1, Says Insala


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