Costly Outplacement Mistakes Can Hinder Downsizing Efforts
by William S. Frank, President/CEO of CareerLab®

Outplacement on Keyoard
Sooner or later, nearly every company faces layoffs: product lines change, the economy shifts, and people get into trouble politically. Although many companies use outplacement counseling to assist in downsizing and restructuring, some use it badly. Here are 15 common mistakes in outplacement and several ideas for correcting them.
  1. Surprising people
    This encompasses laying people off suddenly or unexpectedly when they've had good performance appraisals, or when they haven't had any warning. "Merry Christmas, you're fired." This hits hard, creates anger, and causes people to file lawsuits.

    TIP: Use written performance appraisals at all levels of your company, from entry-level to CEO, and don't allow managers to give "A" ratings to poor performers. Warn problem employees that their jobs could be eliminated.

  2. Not planning This scenario might include acting on too-short a time frame and asking consultants to provide instant service: "It's Monday. Can you be in Argentina for a 100-person layoff on Tuesday?"

    TIP: Bring consultants in as soon as possible to get the full benefit of their expertise.

  3. Offering "Pretend Outplacement" rather than "The Real McCoy"
    Giving token help to present a good public image. Example: providing an understaffed, underfunded career center, or one or two hours of outplacement counseling to long-term employees.

    TIP: Don't be pennywise and poundfoolish. Don't save $2500, then lose $250,000 in a wrongful discharge lawsuit. Even an inexpensive program can make a big difference in how your company recovers.

  4. Shopping only for low price or luxury
    Choosing a firm based on low price alone, or choosing a firm because it has "really nice offices."

    TIP: Take time to explain the specifics of your situation. Make sure the consultants understand your needs, then ask them to tailor something exactly for you. Meet them face-to-face, and interview them in depth.

  5. Letting candidates "shop around"
    Sending candidates out to choose their own service provider. On the surface this looks good. It gives free choice, and it appears to relieve the company of liability.

    However, many outplacement candidates are emotionally distraught, and are not in a position to make a good choice. They often shop for the wrong thing. For example: the most polished sales pitch. And some actually begin crying and expressing anger while "shopping." Finally, you may pay more when outplacement firms compete. That's because to win the sale, they introduce costly perks and benefits you may not want or need. Example: health club memberships, financial planning services, and Spanish lessons.

    TIP: Shop for outplacement yourself and choose a firm to match your budget, your corporate culture, and your candidate's personality and needs. If the program fails—which it seldom does—you can select a second firm.

  6. Choosing the wrong severance
    If you offer too much severance, your candidate may take a long vacation—just long enough for the money to run out. If you offer too little severance, the candidate may panic and freeze. (Ending severance "when you get a job" also leads to long vacations.)

    Offer departing employees a short severance, say three months. Then add additional severance, depending on job-search progress.

  7. Using strong-arm techniques
    Escorting those dismissed from the building with armed guards; making them pack their belongings into cardboard boxes in front of their friends.

    TIP: Except in high-security areas, let candidates leave the building on their own. Then have them return under supervision after hours to retrieve their personal effects.

  8. Not firing soon enough
    Waiting too long to get rid of difficult or non-productive workers. They eat away at company resources and destroy employee morale.

    TIP: Put a plan in place to lead them out of the company. Misplaced people are usually relieved to be asked to leave. They too know something is wrong, but they're afraid to admit the truth.

  9. Using outplacement too late
    Don't wait for days, weeks or even months to begin outplacement. The first few hours after a termination are critical.

    TIP: Begin counseling right at the time of dismissal.

  10. Asking the ex-employee to contact the consultant
    Don't give candidates the consultant's business card with the instructions, "Call if you need help." Candidates don't know what outplacement is. They're often in a crisis, shocked and embarrassed. They may be afraid to call. If given this choice, they generally won't use outplacement; and until they're re-employed, they remain a concern for your company.

    TIP: Have the consultant on-site at the time of termination.

  11. Thinking of outplacement as job hunting
    This includes judging progress only by the number of interviews and job offers.

    TIP: Get a clear picture of the candidate's situation. Sometimes career evaluation and family counseling are more important than resumes and interviews.

  12. Expecting the impossible
    Wanting consultants to turn an impossibly arrogant or abrasive person into a people-person; or a plodder into a superstar. Once people leave your company, let go of them. Let them fail or succeed on their own.

    TIP: Outplacement can sometimes work miracles, but don't expect counselors to reverse a lifetime of failure and poor working habits.

  13. Putting the consultant on too short or too long a leash
    This includes calling daily to check on progress or wanting to know every detail of the process—or else showing indifference or dropping out altogether.

    TIP: Monitor outplacement on a bi-weekly basis. Ask for specifics, but nothing confidential. Take an interest, but don't second-guess the consultants. Let them manage the project; that's what you're paying them for.

  14. Killing job offers with bad references
    Hiring an outplacement firm, then shooting down potential job offers with poor references.

    TIP: Don't try to ruin someone's career no matter how poorly he or she performed. Everyone is valuable somewhere. Find something positive to say, then say it. Don't lie or mislead; but give a balanced opinion. Very few former employees are 100% bad.

  15. Inviting lawsuits by former employees
    In effect, this is saying, "Let 'em sue. We have 187 in-house lawyers and we're bigger than they are."

    TIP: Treat the threat of litigation seriously. Treat people fairly, and most of the time, lawsuits will never appear; or if they do, they'll be easily defused.

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