DEFINITION of Outplacement

No one likes to be fired or laid off from a job or to deliver the news to someone else, but going above and beyond a severance package by providing outplacement services can help both parties through an often-rough transition.

Sometimes services are offered in-house by the company that’s letting an employee go; others hire a third-party when it's necessary to keep expenses lower or if tensions or awkwardness are particularly high.

Either way, the services remain the same: resume and cover letter writing, coaching, market analysis, fine-tuning interviewing skills, salary negotiation and other services designed to give an ex-employee the best opportunity for finding another job as quickly as possible.

BREAKING DOWN Outplacement

From an employee’s perspective, the outplacement certainly lightens the emotional load that comes with a job loss. It’s often overwhelming enough to find a pink slip on your desk. Outplacement services can often help with feelings of insecurity, embarrassment, anger or fear of the unknown, which make a job search that much more difficult.

Employers Benefit Too

From an employer’s perspective, providing outplacement services shows that the company truly cares about the person as a human being and could go a long way toward thwarting any revenge. It’s also a way to keep an ongoing relationship with an employee. That’s particularly important if it involves a layoff due to downsizing, not poor performance or behavior, or the person leaves on his or her own accord. It’s in a company’s best interest to be encouraging and supportive if it has an eye on possibly rehiring the person at a future time.

The other aspect of providing outplacement services that bodes well for companies is saving money on unemployment claims. While companies do not pay extra when a former employee files a claim that’s approved, the annual tax rate they pay to the state toward unemployment is affected.

That’s because that rate is determined by the number of claims past employees make in a year. For example, according to, “a business with a $1 million payroll business can save more than $70,000 a year by avoiding unemployment claims.”

Benefits of Outplacement Services

Outplacement services can be beneficial for all parties monetarily, professionally and emotionally and, more often than not, ensure a peaceful end to a working relationship.

Outplacement services were traditionally provided at an outplacement firm so that the former employee could have access to office tools (such as a phone and computer) that he or she needed in order to write resumes and cover letters and find new employment. Today, many employees have home offices and may only need to visit an outplacement firm for career counseling, if at all, since counseling may also be done over the phone.