In a dynamic work environment where corporate restructurings and personnel changes are common, outplacement services are becoming increasingly important. Companies that need to downsize face the challenge of treating their employees fairly and supportively while protecting their reputation and corporate culture. In this post, we will take a detailed look at how outplacement works in practice, supported by concrete examples such as the case of Airbnb.
What is Outplacement?
Outplacement is a service that companies offer to their laid-off employees to help them transition to a new professional position. This support can include career counseling, help with creating resumes, preparation for job interviews, psychological support, and much more. The goal is to support affected employees quickly and effectively in finding new employment. If you want to learn more about why outplacement is important, the costs involved, and practical tips on the subject, we recommend this short blog post.
Outplacement Practical Example: Airbnb
A vivid example of the use of outplacement in practice is the case of Airbnb in 2020. Due to the global COVID-19 pandemic, the company was forced to lay off a significant portion of its workforce. Airbnb co-founder and CEO Brian Chesky explained in an open letter to employees how the company made this difficult decision and what measures were taken to support the affected employees.
Airbnb reduced its workforce by about 25%, affecting nearly 1,800 employees. To help the affected employees, Airbnb offered a range of outplacement services, including:
- Severance Packages: All affected employees received a severance package that included at least 14 weeks of base pay, plus an additional week for each year of employment at Airbnb.
- Stock Options: Employees with less than a year at the company still received their stock options, allowing all affected employees to remain shareholders.
- Health Insurance: In the US, Airbnb covered health insurance costs for 12 months. In other countries, insurance costs were covered until the end of 2020.
- Job Placement: Airbnb set up a publicly accessible alumni talent directory to help affected employees with their job search. Part of the internal recruiting team was transformed into an alumni placement team to support the affected employees.
- Career Counseling: Airbnb offered four months of career counseling through a company specializing in career transition and job placement.
How Does Outplacement Work in Practice?
The practical implementation of outplacement services can vary depending on the company and the individual needs of the affected employees. Here are some essential steps that companies typically take to successfully implement outplacement services:
- Selecting the Right Provider: Companies should thoroughly research and select a provider that can meet the needs of both the company and the affected employees. It is important to choose a provider that offers tailored solutions and has a proven track record. Feel free to check out our modern and digital outplacement offering.
- Transparent Communication: Clear and open communication is crucial to gaining employees’ trust. Companies should transparently communicate the upcoming changes and the support offered through outplacement.
- Individual Customization: Outplacement services should be tailored to the individual needs of the affected employees. This can be achieved through individual counseling sessions, customized training programs, and specialized job search support.
- Ongoing Evaluation: Companies should regularly review the success of outplacement services and make adjustments as needed. This can be done through feedback from affected employees and by monitoring job placement success rates.
Benefits of Outplacement
Outplacement services offer numerous benefits for both the affected employees and the company:
- Protecting Company Reputation: How a company handles layoffs can significantly impact its image. By offering outplacement services, a company demonstrates responsibility and care for its employees, which can strengthen the trust and loyalty of the remaining workforce and potential future employees.
- Minimizing Legal Risks: Outplacement can help minimize the risk of legal disputes. By offering support to affected employees, the likelihood of them taking legal action due to feelings of unfairness or misunderstanding is reduced.
- Cost Savings: Effective outplacement services can shorten the duration of unemployment for affected employees, thus reducing the costs of unemployment benefits and potential severance payments.
- Employee Morale and Productivity: Respectful treatment of laid-off employees sends a strong signal to the remaining workforce, positively impacting their morale and productivity. It shows that the company values and supports its employees even in difficult times.
- Sustainable Corporate Culture: Outplacement contributes to a positive corporate culture by demonstrating that the company takes its responsibility towards employees seriously. This can lead to higher employee retention and a stronger employer brand in the long term.
Implementing Outplacement Services
Before companies introduce outplacement services, they should consider some key points:
- Selecting the Right Provider: Companies should thoroughly research and choose a provider that can meet the specific needs of the company and the affected employees.
- Communication: It is important to inform employees transparently about the upcoming changes and the support offered through outplacement.
- Customization of Services: Outplacement services should be tailored to the individual needs of the affected employees.
- Evaluation of Services: Companies should regularly review the success of outplacement services and make adjustments as needed.
Conclusion: Outplacement – A Practical Example
Outplacement is a valuable investment in the future of both the employees and the company. It shows that a company takes responsibility even in difficult times and treats the people who contributed to its success with respect and support. In a constantly changing work environment, outplacement not only provides support for transitioning to new professional positions but also serves as a social cushion during layoffs, positively impacting the company’s reputation. It helps minimize legal risks and reduce costs by shortening the duration of unemployment. Respectful treatment of laid-off employees boosts the morale and productivity of the remaining workforce and fosters a positive corporate culture.
By carefully selecting the right provider and customizing the services, outplacement can be an effective and sustainable solution for companies of all sizes and industries.
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