Are you thinking of introducing an outplacement service as part of an exit package or severance agreement? If you are, then you probably want to know what outplacement firms charge.
Although, outplacement programs are not obligatory by law, most companies offer some kind of outplacement package to terminated employees. This can be prompted by a feeling of empathy or as a preventative measure against lawsuits and disparagement.
If you want to quickly see what outplacement services offer, check out this complementary buyer's kit:
Now that that's out of the way, let’s get to the bottom of things and answer the ultimate question – how much do outplacement firms charge?
So, how much do outplacement firms charge?
Contact any outplacement firm and they’ll tell you the same answer – it depends. Namely, outplacement costs depend on the employee’s position in the company and the outplacement services that the organization wishes to provide. You will generally find that hourly employees will amount to lower outplacement fees while senior executives amount to higher outplacement fees.
Consequently, the outplacement fee structure relies heavily on company variables, meaning that outplacement costs differ from case to case.
Here are the main variables that determine the final outplacement cost:
- Skills and experience of career coaches
- Personalized outplacement programs
- Position of the displaced employee within the company
- Level of support offered in the outplacement program
Use this interactive outplacement calculator to estimate outplacement costs.
Needless to say, you should always check for hidden outplacement costs and fees, too. Avoid overpaying by speaking to the outplacement firm to see their stance on retainer fees and term limits. If these added outplacement fees are a part of the firm’s outplacement package, then you can expect to pay more.
Are outplacement services worth the cost?
If you want to avoid litigation risks and any reputational hazards for your business, then yes, outplacement costs are worth it. In fact, having an outplacement program can save your company a lot of money by mitigating the following risks:
- Litigation exposure
- Health insurance premiums claim
- Post-layoff exit claims
- Attacks on brand reputation
- Tarnished reputation among other employees
- Impeded recruitment process
According to a Workforce study, organizations that offer outplacement programs help increase their productivity, profitability, and brand value. The returns on investment of outplacement services are far greater than the costs.
Even though organizations may primarily believe that outplacement is beneficial exclusively for the outgoing employee, the truth is that the protection outplacement offers businesses is just as substantial. Hence, the outplacement costs are worth every penny an organization spends.
What benefits do outplacement packages promise?
Apart from mitigating common risks of employment termination, there are numerous benefits for the organization to enjoy, too.
Here are some of the most important benefits worth noting:
- Increase employee loyalty – Outplacement packages make employees feel safer in the workplace as it acts as a security net in case of job loss. This way, employees see the organization as having their best interests in mind and this sign of empathy will be met with loyalty from other employees as well.
- Retaining quality talent - By offering outplacement packages, organizations are more likely to retain quality talent and attract new talent. Why would anyone want to leave an organization that values their employees?
- Uphold a good reputation - Organizations can have a great reputation among employees by giving them the security and support they crave. This reputation will then reflect a positive light on the organization’s public image.
How can you find the best outplacement firm for you?
This is the problem that most employers face. How do find an outplacement firm that has the best outplacement program while also adding up to the lowest outplacement cost? Here are some guidelines to follow when choosing an outplacement company:
- Ask for recommendations - Recommendations and references from trusted sources is a good way to begin your search for an outplacement company. Bad news travels fast, so if someone has had a bad experience with an outplacement company, they’ll spread the word. The same goes for good outplacement companies. If someone is satisfied with their outplacement company, they’re more likely to recommend them.
- Speak to different outplacement companies – Once you have a few outplacement companies lined up, make a quick phone call or schedule a meeting in person. This way you can explain what types of outplacement services you need and see how each outplacement company can help you.
- Compare and analyze – After you’ve spoken to several outplacement companies, it’s time to compare and analyze their proposals. Do they offer custom outplacement services, what kind of tools and technology do they use, and do they have an effective outplacement program lined up? Draw a comparison to see which company is more suitable for your organization’s and employee's needs.
- Check coach credentials - Your leaving employees will be working together with a career coach to help them throughout the whole job search process. So you want to make sure you’re giving them an advantage in their job search. To do this, evaluate the outplacement coaches employed in the outplacement company by checking if they have the necessary experience, hold relevant qualifications and are up to date with the latest trends in job searching.
- Understand the fine print – Make sure you understand the entirety of the outplacement programs so you don’t get startled by any unexpected outplacement fees.
Does outplacement entail responsibility for organizations?
Organizations that offer outplacement programs have certain responsibilities towards their laid-off employees. They need to make the employee's departure as stress-free as possible. This entails helping them accept their job loss, while equipping them with the resources to continue their career elsewhere. The best way to achieve this is via a custom outplacement program.
Custom outplacement services promise to help employees transition into a new workplace, polish up their resume, support career advances, prepare them for interviews, teach them valuable networking skills, introduce them to job search strategies and offer them ongoing support until work placement.
As indicated by the U.S. Bureau of Labor Statistics, outplacement programs address the need for social responsibility. Outplacement represents empathy and acceptance of an organization's responsibility towards their employees regardless of their employment status.
What’s the next step?
If you’re on the hunt for an outplacement firm that can offer you helpful advice, ongoing support and the most affordable outplacement program, get in touch with Careerminds. We offer flexible and tailored outplacement services for organizations of all sizes.