The redundancy / retrenchment of an employee can be emotionally challenging for all parties involved, especially for the individual who finds themselves without the security of a job and the stress of unexpected loss of income.

The repercussions of a poorly handled redundancy / retrenchment can reverberate through your business with long term effects including starving your business of future opportunities and stifling productivity.

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Outplacement is defined as, “The provision of assistance to redundant employees in finding new employment, either as a benefit provided by the employer directly or through a specialist service.” (Oxford Languages).

Outplacement has a number of benefits >>

Protection of Your Businesses Reputation

First and foremost, a poorly handled redundancy/retrenchment of an employee may cause them to suffer financial and emotional hardship and seek understanding and empathy by talking with co-workers and colleagues within the business, your customers and others within the industry. Stories or rumours of the business mistreating their employees – rightly or wrongly – can gain traction and damage the reputation of a business especially on websites like Glassdoor.com. The way outgoing employees are treated sets the tone for the ones still employed and contributes to the culture of the business overall.

Preserves Future Opportunities

Business owners must be mindful that the role/s and or the person/s that have been retrenched or made redundant may become a necessity in the future. Those employees who have been let go now may prove to be the best candidate in the future but will feel hesitant to be re-employed if they felt mistreated. Failing to support such employee/s in their time of ‘need’ may deprive the business of hiring the most suitable person in the future. These employees are ‘known’ and familiar with the business and its culture, as well as possess an understanding of how things work; knowledge which may prove invaluable in the future. 59% of redundant employees who receive outplacement support are supportive of their previous employers. Furthermore, a staggering 73% would return for the right role compared to 37% who would not if not been offered any outplacement support.

Subtler Repercussions on the Business

When most businesses assess the cost of making an employee redundant, they often only take into consideration the direct costs, such as severance payments and legal fees. However, few businesses consider the indirect costs that often arise, such as higher rates of staff absenteeism, increased turnover and low staff morale due to a co-worker redundancy. This overall loss of staff satisfaction damages the business’s workplace relations and leads to a drop in the bottom line. Businesses must not only focus on the welfare of the employee being made redundant but also provide support for the remaining staff, in an effort to ensure productivity isn’t adversely affected and that they manage the narrative.

Allows for a Focus on Employee Welfare

Using a third party to manage the redundant staff member’s transition ensures the welfare of the redundant employee is the focus. A neutral party can help to diffuse tension and manage the outgoing employees emotions and expectations in a positive and unbiased way. This can help to position the business in a more positive light in the eyes of their remaining employees and outsiders. Furthermore, using professional outplacement has the added benefit of reducing the stress and time on the Human Resources team who may not have the resources or capabilities to deal with the issue/s that can arise. Using a professional outplacement provider not only supports the individual through their transition but can assist the whole Team and/or Manager.

Here at Career Crossroads International, we specifically pride ourselves on our holistic approach to this process, enabling the affected employee/s the ability to come to terms, focus and quickly move on from the past to the future.

Reduced Litigation Risk

The fear that plagues many businesses is that of litigation. As demonstrated by the aforementioned statistics, the risk of such action is minimised through the use of an executive outplacement provider. When employees feel their welfare is being looked after by someone who is a professional, who can assist them and are empathetic to their situation the risk to the business is minimised.

Using a third party to handle the outplacement process allows you to focus on the needs of your business which may be heightened during this time and minimises the stress of possible repercussions from a disgruntled ex-employee.

Career Crossroads International offers support to all parties through our Executive Outplacement/Career Transition Program/s. We offer a boutique service and our programs are built with the individuals’ needs at the forefront. We don’t offer group workshops, hot desks or ask people to follow a template. What we do is build a bespoke program with a number of strategies based on the individual’s needs and wants. For job seekers, we proactively take them to market and offer introductions to firms at the right level, to the right people to enhance their network and job opportunities. Through our program/s we aim to highlight and emphasise the value the employee can bring and validate their worth to future employers at a time when these things are being questioned by the individual. Our approach is based on scientific research and 10+ years of experience and many hundreds of hours providing coaching and career advice to executives.

Redundancy/retrenchment are a fact of life but if executed correctly with the right support an individual can both quickly change their mindset and move their career forward while having minimal if any hard feelings of their past employer/manager.

Learn more about our executive outplacement services here>