Outplacement Costs

Posted at November 4, 2009

Outplacement costs are going to vary depending on a lot of things… but let’s do some simple math based on an announcement from Johnson & Johnson. J&J says they are going to cut 8,200 jobs… let’s assume that none of these are because of attrition (when people retire and J&J just eliminates the job).

For simplicity sake we’ll assume they are going to get outplacement for all of the 8,200 displaced workers.

If J&J pays an average of $3,000 per person they would pay $24.6 million.

If J&J pays an average of $2,000 per person they would pay $16.4 million.

If J&J pays an average of $1,000 per person they would pay $8.2 million.

That is a LOT of money (well, not that much money for J&J, nor is it that much money for either of the two largest outplacement companies).

Let’s compare that to the affordable outplacement model, as well as pricing I’ve recently learned about from our competion. I don’t consider traditional outplacement competition because we are not going after the $3k/person deals… we are offering something that is an alternative to traditional outplacement, with different offerings (no office to drive to, etc.).

The pricing I’m hearing about starts around $400 and goes to $800.

If J&J pays an average of $400 per person they would pay $3.28 million. Savings of at least $4.92M.

If J&J pays an average of $500 per person they would pay $4.1 million. Savings of at least $4.1M.

If J&J pays an average of $800 per person they would pay $6.56 million. Savings of at least $1.64M.

Of course, all proposals will include some kind of volume discount… but you this should give you a good idea of what outplacement costs could be, and some alternatives.

To learn more about Affordable Outplacement please contact us.