What is Outplacement?
Outplacement originated in the early 1960s in the USA. A Chicago-based company called Challenger, Gray & Christmas (CGC), founded in 1962, was one of the pioneers. CGC was dealing with the assessment and testing of personnel, coaching, training, and development of managers and promising employees, consulted employers and employees on dismissals. Outplacement was formed out of this “mixture”.
The methodology of outplacement was brought closer to what we are used to now by Boston psychologists John Drake and Jerry Beam. By the mid-1980s, their company Drake, Beam & Associates (DBM) became one of the world’s flagships of HR consulting. Once, implementing a group outplacement program for 10,000 IBM employees, they had to hire dozens of temporary assistants for their 500 consultants.
In the twentieth century, the surge in demand for outplacement usually occurred in times of economic crisis, with mass staff reductions in closing enterprises. In the XXI century, a severe shortage of qualified personnel has forced the business to care more about its image as an employer and to evaluate the economic benefits of outplacement. If a person is dismissed correctly, a loyal and already trained specialist can be attracted, when the economy recovers. In addition, new candidates’ motivation can be increased with real examples of respectful attitudes towards employees even in difficult times.
Outplacement is often mistakenly referred to as an employment service. This kind of confusion is dangerous because it creates the wrong behavior pattern in the minds of people. A responsible provider will never guarantee employment to a program participant, but consultants will do their best to help people become successful in the labor market and support them in achieving new career goals.
The services of a consulting company are paid for by an employer and not by a program participant. This is one of the main differences between outplacement and career consulting services, where the client is an individual interested in promotion in the labor market and career development. However, these areas are closely related. Some countries use the “hybrid” name of this service – Outplacement & Career Transition.
In outplacement programs we use a variety of tools for different occasions: individual and group programs, master classes, seminars on the labor market and job search, career coaching, testing and assessment, support, and assistance in developing a career strategy, choosing job search channels, preparing a CV, passing an interview, etc. Nowadays, participants can use a hotline for communication with a consultant, remote psychological support, and access to educational online resources with a personal account.
Hence, outplacement reduces tension in dismissal and helps to minimize legal, reputational, and financial risks, contributing to a company’s HR brand development as a responsible and caring employer.
