Is Outplacement Still Relevant?

Even in today’s prosperous business climate, the replacement of employees with redundant and/or obsolete skills with outside hires and reducing headcount in sweeping layoffs are strategies as prevalent in today’s workplace as they were in the early 1980’s and throughout the 1990’s. What’s different now is the need for organizations to maintain employee engagement and protect their company brand, both of which are essential to sustainability and growth.

Global competition, digital transformation and market disruption requires a bolder, more nimble talent strategy, where doing the right thing and ensuring a culture of trust and transparency is paramount.

For the most part, employees are no longer to their disposability. But how a company manages a layoff (in groups or individually) by minimizing the impact on those outplaced and on their remaining colleagues is a significant factor that drives employee engagement.

Providing outplacement services to those who have been impacted is a tangible display of corporate responsibility and a culture that values people. It is a compelling attribute that top talent seeks in joining and remaining with an employer. Knowing that there will be help assuages fears and improves productivity and innovation. And the survivors will be resilient post lay-offs and continue to grow and innovate.

Here is a look at how organizations should help separated employees and inspire those who remain to boost morale and focus for the entire company.

Inside the Organization

One serious cause of dropping productivity following a layoff is a pervasive sense of personal violation. Prior to a downsizing action, employees were tied to a shared sense of purpose and relevance to the company. Social connections were made, and individuals acted like meaningful contributors and part of a safe community. These are all positive aspects in the employee community; connecting employees to the company’s mission, vision, and values is a central premise of retention and development programs and gives individuals a sense of purpose beyond simply earning a paycheck.

The trouble lies in how the group processes a merger, reengineering effort, or other events that lead to downsizing. For those with a strong connection to the workplace community, powerful emotions such as guilt, anxiety, depression, fear, and anger can arise. These employees can become risk-averse and emotionally drained which can then lead to a loss of productivity.

There can also be a sense of betrayal among those remaining. Some may start to believe that the company’s social connections, brand, and mission are a sham. According to one survey of surviving workers of companies that encountered layoffs in the last six months, 69 percent said the quality of the company’s product or service has since slipped. Almost 90 percent said they are less likely to recommend the organization as a good place to work, and 61 percent said they believed their company’s prospects will worsen.

Failing to address these fears, anxieties, and bleak outlooks can be dangerous for any organization.

Helping the Separated

When reducing the workforce becomes inevitable, the most important thing for companies to do is to ensure the process is clear, controlled, and transparent. Inconsistencies and chaos will only feed into any negative emotions. The managers of those who have been chosen to leave should start by acknowledging the work and accomplishments of those individuals. Be consistent that the layoff is not personal the position, not the person, is being eliminated.

Then, straightforward and specific reasons for the necessity of the cuts should be given. People may not be happy with the circumstances, but if they can understand the why behind the moves, they are less likely to be fearful and anxious. Lastly, be sure that managers remain available for questions for as long as necessary, but don’t drag out the process unnecessarily. Some people will understandably want to leave quickly.

The Harvard Business Review also suggests supporting these employees as they find new solutions. Outplacement efforts that help people retain their standard of living, stability, family life, and self-esteem are also critical to the long-term prognosis of the company as well as the individual. Plus, making sure the separation is smooth and as painless as possible will also show those who remain that the company is concerned with everyone’s well-being and that even though downsizing must happen, those who are let go won’t be left out to dry.

Caring for the Those That Remain

In many cases, people feel uncomfortable airing emotions in the workplace, but the best way to help employees move forward is to facilitate an emotional release. Leaders must be willing to take a risk and open up with employees either in groups or one-on-one sessions to talk or to just listen as others vent their fears and frustrations. Remember that important social networks have been disrupted so leaders should be encouraged to increase communication and contact as those networks are rebuilt.

If some employees are still feeling angry, fearful, or depressed, keeping those feelings inside isn’t serving anyone. Encouragement to air these emotions should be given, even for those who cannot bring themselves to do it at work. Friends, spouses, clergy, or even a therapist can help people work through their guilt, or any other anxieties that remain.

To address the ongoing fear of additional layoffs, companies must be clear and set expectations and then stick to them. One study found that the fear of looming layoffs can be more disruptive than the actual process so consider a moratorium on future downsizing even if it’s only temporary as everyone regains their footing.

A Necessary Process

The depth of impact that downsizing has can be difficult to see until it’s over. However, there can be some positive outcomes that emerge from such changes. For those who remain, once they feel stable in their position again, a feeling of resiliency can develop as they take stock of their lives and careers and recapture their self-esteem.

For companies that are successful at creating a transparent process that although unpleasant, seems fair to the remaining employees, enjoying a restructured workforce that has been re-centered around goals and customer service can serve as a new anchor to keep things on an even keel as the new group heads into the future.

If you’re wondering whether your outplacement program positions your company and employees for success, or you would like to review and fine-tune your current design, please contact Mike Milsted at 262-786-9200 or via email at