Are Outplacement Services Worth It? The Cost-Benefit Analysis of Outplacement Support
Most outplacement services are designed to provide support and resources to employees impacted by the change in their current work situation, helping them find new jobs and transition to the next chapter of their careers.
While the majority of people understand these services can benefit employees and employers, we have seen recent questions about whether they are worth the cost.
Some argue that outplacement services can be costly and may not provide the desired results. In contrast, others say that the benefits outweigh those costs and are necessary for any company transitioning an employee (where I stand as a previous manager of employees).
This post will explore the pros and cons of outplacement services and examine whether they are worth the investment for companies and employees. We will look at factors such as the cost, the level of support provided, and the results employees achieve in their job search.
Article Summary
This article addresses whether outplacement services are worth the cost for companies & employees, discussing the pros, cons, & importance of conducting a cost-benefit analysis.
Outplacement services are designed to support employees during a career transition phase by providing job search assistance & career coaching.
A cost-benefit analysis evaluates the total costs & benefits of outplacement services to decide whether to invest in these services or not.
Costs of outplacement services include provider fees, coaching costs, additional expenses like travel or other support services, administrative expenses, training, & IT infrastructure for online outplacement services.
The price range for outplacement services can vary between $400 to $3500 per employee, depending on various factors such as company size, industry, location, & level of service. Calculator Link
To conduct a cost-benefit analysis, it's necessary to identify all costs & benefits, assign a monetary value, compare prices and benefits, & evaluate the results. These have limitations & are not an exact science, with potential bias & uncertainty affecting the results.
In conclusion, each organization needs to decide whether outplacement services suit them. This article suggests that outplacement services provide significant benefits & support for transitioning employees despite the costs.
So, Are Outplacement Services Worth It??
Yes, as an HR professional, I truly believe in the value of outplacement services. In my experience, providing these services not only helps our displaced employees transition more smoothly into new job opportunities, but it also positively reflects on our company's reputation.
These services show our staff that we truly care about their well-being, even in difficult situations. This improves overall employee morale and loyalty among those who remain (among a list of other benefits).
How is Cost of Outplacement Broken Out?
Outplacement services can have a range of costs but are typically packaged together (what we do). Some of the common costs associated with an offering include:
Provider fees: These fees can vary depending on the type of services provided, the length of time the services are provided for, and the size of the company. Some providers may charge a flat fee, while others may charge a percentage of the employee's salary. At Turbo Transitions, we charge one low flat fee per employee.
Coaching costs: Outplacement offers typically include a coaching session or call to help guide and better transition an employee. This is often included in the overall price per employee but smart to still ask in case it isn’t.
Additional expenses: Additional expenses may be associated with these services, such as travel costs for employees who need to attend workshops or fees related to providing other support services, such as financial advice or career development services.
Admin costs: The company may incur administrative expenses such as managing the outplacement program and communication with the employees throughout the transition.
Training costs: Some providers may offer the employer's HR team training to ensure they have the knowledge and skills to support employees.
IT infrastructure: The company may have to invest in IT infrastructure such as a portal, LMS, or career platform if the outplacement service is provided online.
The costs of outplacement services can range from $400 to $3,500 per employee, depending on the company's size, industry, location, and the type and level of service they choose.
What is the Purpose of the Cost Benefit Analysis?
An outplacement cost-benefit analysis looks to determine the overall value of a service for a particular company. This involves evaluating the total costs and benefits of the services, followed up with a comparison to determine whether or not the benefits outweigh the costs.
This analysis can help a company decide whether or not they will provide outplacement services and determine how much to invest in them.
5 Steps for Conducting Your Cost-Benefit Analysis
Identify costs: Identify all the costs associated with career transition services, such as provider fees, counseling costs, additional expenses, & administrative costs.
Identify benefits: Identifying all the benefits such as job search assistance, career coaching, mitigating negative publicity, preserving employee morale, maintaining a positive relationship with employees, & cost savings such as reduced unemployment benefits & legal action.
Assign a value to each cost/benefit: Assign a monetary value to each cost & use it to make it easier to compare & evaluate.
Compare costs and benefits: Compare the prices & help determine whether the benefits outweigh the costs. This can be done by creating a matrix or a table that lists all the costs/benefits & compares them in terms of importance & value.
Evaluate the results: Evaluate the cost-benefit analysis results to determine whether outplacement services are worth the cost for the company.
We are biased, but we believe our virtual outplacement services provide the best transition support on the market while keeping your cost minimal. Reach out if you have any questions or would like to learn more about our pricing structure.
Wrapping Up | Is Outplacement Worth It?
There’s no doubt about it - conducting a cost-benefit analysis is extremely important for companies looking to determine which outplacement firm is right for them (or if it’s worth it at all). This is something we recommend any employer does before making any kind of investment.
However, it's crucial to remember that a cost-benefit analysis has limitations, and you should always consider the assumptions and uncertainties that could affect the results.
Ultimately, it’s up to you and your organization to decide if these services are right for you and which firm to go with. Again, we are biased, but we believe outplacement services are without a doubt worth the cost. We think you will agree too!
I hope this helps with your decision making but feel free to reach out with any questions!
Tags: is outplacement worth it, cost of outplacement, what does outplacement services cost
Author: Reid Alexander
Disclaimer: This content is for informational purposes only & not intended as professional legal or HR advice. Consult with qualified professionals for advice tailored to your specific situation. The author & publisher disclaim any liability for errors, omissions, or actions taken based on this content.