Technology: Outplacement - a cost effective way of supporting redundant staff?

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Online outplacement programmes are popular with employers seeking cost-effective ways of supporting redundant staff. Does it spell the end of the human touch? Robert Gray reports.

With unemployment at its highest level since 1997, it will surprise few HRDs to learn that demand for outplacement services is also scaling new heights (see below). But what may not be so well known is the extent to which technology is playing a role in the provision of services that ease the trauma of job loss and help staff find new positions.

HR technology company Insala reports a pronounced rise in UK users of its online outplacement programme - EmploymentTalk - over the past 18 months. In the last quarter in 2008 it achieved 20% growth compared with the same period in 2007. This was followed by a further 10% rise in active users during January-March 2009.

With EmploymentTalk employees can access a secure portal that contains interactive exercises, psychometrics, productivity tools, a CV development, distribution and tracking system, unique research and job lead data specific to the end user, and an online marketing programme. A database helps to track and connect the relationships between the career consultant, the employee who has been made redundant, the customer who is paying for the services and the administrators and project managers of the outplacement firm.

"Technology improvements supporting outplacement and career transition activities continue to shape the service and the industry," says Insala's CEO, Phillip Roark. "The latest advancements in web technology are benefiting HR buyers and employees using the service by creating more choice, competition and ultimately a chance for employees to receive more targeted services that meet the unique needs of each person and each organisation."

Insala supplies EmploymentTalk to three main groups of clients: specialist outplacement consultancy firms; a growing freelance or individual practitioner community; and 'non-traditional' providers - recruitment firms, occupational psychologists and job board/advertising organisations.

Roark is adamant there is plenty of scope for further growth in use as technology continues to evolve and greater numbers of users are comfortable with web-based systems. There are two sets of forces in play. On the one hand, organisations are under growing profitability and cashflow pressure. On the other, HR professionals realise the value of outplacement support in managing both the leavers and the stayers. The net result is that HR professionals are increasingly seeking cost-effective routes that either replace, or ideally maximise, the value of face-to-face support their organisations can afford.

Jim Horsted, director at outplacement specialist Working Transitions (WT), takes the view that technology can either be part of the mix or predominate. "We are currently working with over 7,000 newly redundant individuals per month where they receive a purely technology-based service, that is, there is no face-to-face support," he says. "We also have numerous projects where organisations can only afford minimal face-to-face support, and here the key to our success is in structuring the technology support so that individuals gain the maximum possible value from limited face-to-face support."

Regardless of how much face-to-face support WT gives an individual, it provides its technology-based solutions to each individual until they are 90 days into their new role. Even in those cases where organisations are happy to justify the cost of plenty of face-to-face support, Horsted says technology still plays an important role in adding value.

Profiles International, meanwhile, offers a product called Transition Coach that uses psychometric methodology to compare the soft skills of respondents with the top 300 careers on a comprehensive careers database. "The widespread use of the internet has made it the route of choice for many people when looking for information, and advice in any aspect of their lives," says Profiles managing director Martin Goodwill. "The ability to access it from the comfort of home, without the need to travel, and to do so at a time of the candidate's choosing, makes it a hugely convenient solution for anyone, regardless of where they are based."

Goodwill believes the economies of scale from technology solutions make them more cost-effective than any other form of outplacement advice and, therefore, ideal for companies that can't afford or do not provide full outplacement for departing staff.

According to Owen Morgan, head of commercial operations at HR consulting group Penna, its own research shows technology is a highly valued component of an outplacement service - alongside a qualified career coach with whom an individual can meet face-to-face; networking seminars; workshops around many aspects of job search and the facility to work in a business-like environment at serviced offices. In Penna's view, a solely technological approach may provide the necessary information around values, skills and aspirations, but it is essential this is correctly interpreted by a career-coach, in discussion with the client.

For those organisations tempted to stint on outplacement at a time when budgets are tight, there is plenty of evidence that it is usually a wise investment. Research from both HDA and Reed Consulting has found the provision of outplacement support helps employers retain and motivate those not directly affected.

"The management of departing employees plays an important part in shaping the culture and brand of a company," says Fiona Freeman, head of human resources, Europe and America at bank ANZ. "Remaining staff will see how colleagues are treated and will make judgments accordingly. Outplacement is simply an extension of an organisation's value proposition."

ANZ provides outplacement support early on in the exit process, at the 'at risk' notification stage. The provider is on site when initial conversations take place in order to provide immediate support and contact if required.

Freeman is not alone in believing a face-to-face element to outplacement is irreplaceable (see below). However, technology is assuming an ever-greater role in the process because of the flexibility and cost-effectiveness it can offer. HtR Outplacement recently launched a Virtual Outplacement service to complement its one-to-one offering. This option provides consultants with remote access to the computer desktop of a candidate located elsewhere, helping them tailor CVs and applications and brush up on skills. This, says managing director Andrew Underwood, allows HtR to deliver an otherwise expensive product at a fraction of the cost.

Rival outplacement specialist Fairplace has an eFairplace online career support resource and offers a number of online training tools. It can connect with clients using webcams but, according to managing director Linda Jackson, face-to-face is still a vital part of the mix. "For some people losing their job is a shock and their confidence can be badly dented," says Jackson. "It's very hard to be upbeat if you are sitting alone in your bedroom with a blank sheet of paper trying to position yourself in the market. It's good for people to establish a rapport with a coach and the best way to get a job is by networking - so it's good to do things face-to-face."

Technology plainly has an important and growing role to play in outplacement. It may not be fully appreciated yet, but with unemployment thought to reach 3.3 million in the next year, it could well be the solution of choice.

OUTPLACEMENT IS A GROWING CONCERN

The 2008 Reed Consulting report, The Value of Outplacement, found outplacement support had increased by 50% in two years - and this research was conducted ahead of the recession. While there was a feeling employers had a moral obligation to offer outplacement support, the report found 78% of respondents felt that the provision of outplacement could improve the organisation's reputation, while 55% believed that it could help the organisation be seen as an employer of choice.

The 2008 HDA Outplacement Survey, meanwhile, found that the great majority (81%) of organisations that have experienced a restructuring in the past 12 months offered support to employees, with more than three-quarters providing different programme structures depending on the employee's level within the organisation. Survey respondents were unanimous in believing that 'outplacement support enhances the ease with which changes are implemented and accepted'. According to 86% of respondents, outplacement support provides value for money.

In March 2009, separate forecasts from the World Bank and IMF indicated the world economy would shrink this year, making it a near certainty that we will see more redundancies and a further rise in outplacement activities. This prognosis squares with a CIPD/KPMG Labour Market Outlook Redundancy Special at the end of 2008 which found more than a quarter of employers (26%) have contingency plans to make new or further redundancies in the next 12 months in addition to those already planned.

TECHNOLOGY EMPOWERS

Capita Resourcing is a heavy user of technology in the outplacement services it provides. It estimates well over 90% of the individuals it supports make use of Insala's EmploymentTalk product.

"It is a balance between the use of technology and the input of people because face-to-face still has a role to play," says Capita people development managing director Simon Wilde. "What's good about technology is that it puts individuals back in control of their own destiny."

Wilde says empowering people by giving them access to technology of this kind 24/7 offers an important psychological boost at a time when their confidence has taken a knock. It also provides the welcome flexibility to do things at the most convenient time.

Moreover, with a lot of recruitment outsourced and making use of psychometric testing and technology, it clearly makes sense for outplacement to mirror these trends.

"People's expectations around technology are changing as well," concludes Wilde. "Increasingly, you can relate a job search to a corporate sales campaign that makes use of sophisticated CRM and databases. Now people expect that technology of such a level will be there to help them find new jobs."

THE MERGING OF OUTPLACEMENT AND JOB BOARD TECHNOLOGIES

With the pace of technological change showing no sign of slowing down, it was only a matter of time before outplacement technologies and those of the job boards began to merge. RiseSmart, a Dallas-based job site for $100,000-plus executives, marries technology with human expertise using its Job Concierge team. In December 2008, the company received $3 million in venture capital funding, following on from $1.5 million in seed funding in 2007.

RiseSmart's trained HR professionals match opportunities with jobseekers based on each member's unique profile, freeing them to focus on networking or the demands of their current jobs. Specifically in the outplacement field, RiseSmart offers Transition Concierge, which bundles its Job Concierge service with CV preparation and other transition management services, to assist a corporation's laid-off workers. "We believe others will attempt to copy our approach," says RiseSmart CEO and founder Sanjay Sathe. "The fact that we have secured Fortune 500 clients and Silicon Valley funding in such a short period of time has definitely turned some heads."

Sathe argues his company has some competitive advantages that are difficult for others to replicate. For example, it uses proprietary technology to search web job listings and then to filter these into categories, such as $100,000-plus marketing management jobs. Only then does its trained team of HR professionals step in to match jobs for clients.

"We believe RiseSmart Transition Concierge is a classic example of disruptive innovation, and we expect nothing less than to turn the current, bloated corporate outplacement market on its head," adds Sathe. "Traditional services will ultimately go the way of the dinosaur. We know that our corporate customers are blown away by the technology, and they include some of the largest, most technologically-sophisticated companies in the world."

Employers are, says Sathe, frustrated with traditional services, because they cost a lot but do not demonstrate measurable value for laid-off employees. He says providing group-counselling sessions, temporary use of office space and other 'soft' services are not sufficient when what employees really want is help in finding a new job.

RiseSmart has no immediate expansion plans but longer term is eyeing up all English-speaking countries, including Canada, the UK and India. Expect more hybrid recruitment and outplacement models to follow.

THE HUMAN ELEMENT

The highly emotive nature of redundancy means it must be handled with great care and sensitivity. For many, this means ensuring the process, including outplacement, has as human a face as possible.

Ffion Griffith, HR director, Olswang: "In November 2007 we announced 10 job losses and in January this year revealed a second wave of redundancy consultations proposing 45 jobs cuts. We feel it is critical staff feel they have someone knowledgeable, well-informed and able to offer practical guidance that is tailored to the person in front of them - tailored not just to their background, experience and aspirations but also to how they feel about the process of moving on."

Paul Holmes, director, InterSearch UK: "You will never remove the face-to-face element of outplacement, particularly in the area of interview skills and presentation training, as well as preparing people for the market and coaching them. Only following workshops do our outplacement candidates have telephone and email support as well as access to the online Resource Centre. All recruitment is eventually done via face-to-face meetings so the human element will always remain."

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