From Layoff to Liftoff: How Outplacement Firms Help Employees Bounce Back
Introduction:
Outplacement services have experienced a surge in demand as many Indian companies undergo workforce reductions. Startups, as well as companies in the IT, IT services, and retail sectors, are recognizing the need to assist retrenched staff during these challenging times. Outplacement services not only help individuals find new employment opportunities but also offer guidance in resume writing, interview coaching, and social media networking.
The Rise in Employee Transition Seekers:
Adecco, a prominent HR services company with an outplacement unit called LHH, reports a significant increase in employees seeking career transition this year compared to the previous year. The executive of Adecco highlights that a majority of their clients, ranging from international organizations to Indian firms, come from the IT and ITeS sectors, forming a diverse client base.
Cyclical Nature of Outplacement Services:
Outplacement services were introduced in India following the global financial crisis, but their demand largely depends on the job market. During hiring frenzies, such as in 2001 and parts of 2002, companies did not utilize these services. However, in times of funding crises and macro-economic slowdowns, the demand for outplacement surged, driven by thousands of layoffs in startups, IT, ITeS, and FMCG companies.
Success and Benefits of Outplacement Services:
Right Management India Pvt. Ltd, the consulting arm of recruitment firm ManpowerGroup, has witnessed a doubling of revenues from outplacement services in the past year. President Hardeep Singh emphasizes that within 90 days, candidates secure new jobs after being laid off, and only a small fraction (20%) need to accept lower salaries. Additionally, clients, particularly in the IT, ITeS, and startup sectors, seek assistance in handling employee retrenchments and training managers in offering compassionate support.
Age Bias and Recruitment Implications:
Hardeep Singh notes that in some cases, a candidate’s age can affect their chances of finding new employment, as companies often prefer younger employees. This highlights the need for outplacement services to help older workers navigate this hurdle and overcome potential age bias in recruitment processes.
Cost-Effectiveness and Recruiters’ Advantage:
Specialized outplacement service companies charge clients fees ranging from ₹40,000 to several lakhs per candidate. Importantly, these fees are solely borne by the company conducting layoffs, relieving the hiring companies from incurring these costs. Consequently, recruiters benefit from readily available, industry-trained candidates who have received specific role-focused training from outplacement services.
Outplacement Demand and Job Market Trends:
Outplacement demand is inversely proportional to the job market. While 2022 experienced a boost in hiring, resulting in decreased demand for outplacement services, the year 2023, particularly in H2, exhibits a higher demand due to sector-specific recession fears and fluctuating hiring patterns. Sue Ann Vaz, executive director of ABC Consultants, confirms this trend and also emphasizes that outplacement services play a vital role in managing a company’s public image and mitigating potential social media backlashes.
Perception Management:
Given the criticality of maintaining a positive brand image in an age of social media, companies are increasingly turning to outplacement services for perception management. The potential for negative viral backlash on social media platforms creates high stakes for companies, making outplacement an essential tool for reputation safeguarding and crisis prevention.
Evolution of Motivations:
The motivation behind seeking outplacement services has evolved from merely offering support during the COVID-19 pandemic to the current focus on risk mitigation. Sue Ann Vaz asserts that companies now recognize the importance of implementing measures to minimize potential negative impacts during times of uncertainty.
In conclusion, as layoffs become more common in the current economic environment, outplacement services have emerged as a crucial support system for retrenched employees. Not only do these services assist individuals in finding new job opportunities, but they also offer guidance in skills enhancement and reputation management for companies. By recognizing the importance of outplacement services, companies can navigate workforce reductions while prioritizing the well-being and professional growth of their employees.
Disclaimer:
The material in this article was compiled using the most recent Acts, Rules, Circulars, Notifications, Provisions, Press Releases, and material applicable at the time. The completeness and correctness of the material ensured with due diligence. It is required of users of this material to consult the relevant, applicable legislation. The data given may change without prior notice and does not constitute professional advice. As a result, Estabizz Fintech disclaims all liability for the results of using such material.
