How come we’re still talking “out?” Shouldn’t we be talking in?
Hi there! I’m Julie Walraven, one of Jason Alba’s Career Experts and partners! I’m a career marketing professional and I own designresumes.com. Jason has asked me to come over here and regularly guest blog for him. Jason and I have been friends for several years since we met on the career marketing industry organization e-lists. It starts getting blurry about which group. I belong to Career Director’s International – oh that’s right, I asked Jason before I joined last January. I find myself doing that a lot – asking Jason. I also belong to the Professional Association of Resume Writers and Career Coaches and Career Management Alliance. I learned much of what I know about LinkedIn from Jason and definitely grew in social media through learning from his example.
We’ve been talking about his Affordable Outplacement a lot lately and I promised to help him with this blog. Jason’s a busy blogger, what with the JibberJobber blog, the I’m on LinkedIn, Now What blog, and this one, as well as his webinars, speaking engagements, and sales of the LinkedIn for JobSeekers DVD.
Today, I thought we would just touch on something that struck me earlier today in one of my thinking moments. We, the career industry, the economists, the government, the people,… we’re still talking out. Outplacement, out of a job, out of business, but pretty soon we have to start talking in, don’t we?
The reality is the all companies need to start thinking about strategies to manage to turn the companies around, to make them work in this economy, and to plan for the future. In the process of this, there may still be a fair amount of “out” and that’s where Affordable Outplacement comes in. Companies need to exercise strong fiscal management in this very tough economy. In order to be competitive, they may need to make even more changes. But not being considerate of their employees will add to bad reputations. Affordable Outplacement can put a strategy in place that works for the company and makes those employees be able to cope with the changes coming in this new way of doing business.
For the future, companies that put their trust in Affordable Outplacement and the strategies that Jason and the career industry have been promoting, the length of time the employee is out of a job can be shortened and the cost to the company can be much less than the costs of the very large outplacement firms that primarily targeted only the top echelon of the executives. Job seekers are facing a tough market and every one in social media is watching how companies treat their employees.
So let’s start talking in, putting Affordable Outplacement “in” your exit plans.
Thoughts? Talk to me. I talk back. See you again, real soon!
AOL Layoffs – Doing It Right
I was poking around the web this morning and found this article:
Laid-Off AOLers Get To Keep Their Laptops, PCs And BlackBerries
This is the way to do it, seriously.
When I got laid off I got to keep my laptop. Even though you can buy a new one for around $500, it is a really terrific gift from the employer.
I was talking to an outplacement guy, commenting on the price of Affordable Outplacement, and he said “with your price, a company can afford to buy each of their employees a laptop, and still come out ahead of traditional outplacement.”
That’s right. And I’ll tell you, when you get laid off, taking away the technology is significant. Letting them keep it is a huge, huge leg up.
Kudos AOL, for that awesome decision!
Where Outplacement Fails
There is a Wall Street Journal article from a few months ago that caused quite a stir amongst outplacement professionals, as well as resume writers and career coaches and counselors. It is titled Outplacement Firms Struggle to Do Job.
There are some very strong statements in this article… in the second paragraph it quotes an outplacement customer saying “outplacement was a waste of time.”
Read on and you learn that outplacement is a $4B/year business. That is a BIG business, especially if you consider the Big 3 control most of that money.
Questions about outplacement include:
- Does it work? If you want it to, you probably shouldn’t read that sour article.
- Will my employees use it, and get value out of it? Again, don’t read the article.
4 billion dollars a year spent on something that might not work, or that my ex-employee might not use? Why are companies paying for outplacement?
There are some good reasons, for sure.
More thoughts on the article in the next few weeks. And if you want to get riled up (whether you are an outplacement provider, or a purchaser of outplacement services), make sure you read the comments of the WSJ article 
How Companies Treat (ex)Employees
Yesterday I read an article titled Qwest ending death benefits for retirees in ‘10.
This is clearly a business decision, and probably a smart one. Qwest has not been without it’s financial problems, and cutting almost a quarter billion dollars of debt is good for the company’s health and the shareholders.
But here’s the scary part: the message that Qwest is sending (granted, the article is very short, so I don’t know all the details) is this: no matter what we told you before, we’re cutting it off.
Like when I heard a few years ago about companies that terminated pensions after you reached a certain age. Maybe that was an urban legend, but it contributed to employees losing respect and loyalty and trusting companies.
If I worked at Qwest I would have to question what benefits I’ve been promised that will still be around when I retire. Or, after I retire, and I think I have a benefit for life, will it actually be for life??
Let’s go back to the idea that this is a business decision. The problem with this business decision (from a business decision perspective) is that employees were essentially promised these life-long benefits. Imagine you are 24 or 34 or 44 and you are making a decision to work at Qwest or another company – one thing you weigh is what you get… and Qwest is offering this (and probably other) lifelong benefits.
That would absolutely affect my decision (do I work at Qwest, or the other company).
So if I’m 24 or 34 or 44 and I decide to work there, and that’s one of the major reasons why, and then they cut the benefit later, that seems very unfair. Deceptive. Maybe even bait-and-switch.
I’m not saying that’s what Qwest is doing (again, it’s a business decision) – but to me, as an employee, I lost trust and respect in anything else they have said.
Think about any and all messages you send to current and past employees – whether it’s when you terminate them, or years after they’ve retired, or when they’ve only worked there for a few years.
You want good branding, strong loyalty, and all that stuff, right?
Your message has to earn it.
(one way to earn that good branding and strong loyalty is to help people when you terminate them – hence, Affordable Outplacement (and outplacement in general)).
How to lay off an employee: “Attached Unemployment”
Just saw this terrific article on NPR about Katie Tyler, founder and president of Tyler 2 Construction, who lays off her employees in a different way.
I can’t imagine this would be appropriate or acceptable in a large company, but for the thousands of small companies who are faced with downsizing, this looks like a win-win.
Two elements of “attached unemployment,” from the article, are:
- “The company files weekly unemployment claims for the people it has laid off. That way, their benefit checks come faster and with less hassle.”
- The company still pays health insurance for the laid-off worker.
Clearly the employer is hoping to retain talent, and get these workers back to employment when the economy changes, or when they start to pick up business or win contracts, etc.
When I worked at my last software company the managers (board members) wanted us to layoff the talented people we had on staff. They were in the janitorial industry, and when they needed they could reduce workforce and rehire at the drop of a hat – afterall, how much training did it take to learn to clean a toilet or sink?
Software developers are different – you do not want to lose someone who’s been with you for years because they know stuff that might take years for others to learn (undocumented features, etc.). Or, they have a more intimate relationship with the customer, or understanding of the industry…
Sure, all of this *can* be learned by someone else (a new hire), but it makes a lot of sense to develop the relationship (can I suggest “loyalty?”) with your existing talent so that you don’t have to spend a ton of money getting the new person up to speed?
I think there’s something in the idea of creating this loyalty – we had it decades ago, but it’s gone away as neither employees nor employers have the same level of loyalty towards one another as there was many years ago.
I think there could, and should, be… it would just look different than it used to. More on that later.
Outplacement Alternative: RiseSmart
I’ve known about RiseSmart for a while – I just reread a press release they put out October 21. You can read it here, titled RiseSmart Announces $4.6 Million in Additional Series A Financing from Storm Ventures and Norwest Venture Partners.
Here are some interesting points I’ve pulled out of the press release:
- They consider themselves as outplacement disruptor (they are, kind of)
- They are getting Fortune 500 customers
- They are in Silicon Valley – relevant because there is a “let’s get funded!” mentality there like nowhere else
- They have taken a total of $8.85M in funding so far
- The outplacement industry is a $3B industry
- Their pitch seems to be that they are more affordable (”…is disrupting the cost structure for corporate outplacement providers…”) AND that they are using technology as a significant part of their offering.
- They have “grown rapidly” since June 2008. I don’t know what that means – grown their team? Grown their revenues? Grown there _______?
- They define outplacement SOFT services to include “grief counseling and office space”
- Most important in their offering is to deliver “actionable job leads from across the Web based on…specific criteria”
- “Based on an independent survey the average employer paid more than $5,000 per executive or manager for three to six months of outplacement” – WOW – that average is higher than what I’ve heard…
- They claim traditional outplacement is not delivering what the candidate really wants: “a singular focus on finding employees jobs.”
For me this was a juicy read – I’m excited to follow RiseSmart as they proceed. It will be really interesting to see how traditional outplacement reacts to the claims – I have no doubt they are going to evolve, as opposed to become obsolete.
Looking for outplacement services? Give Affordable Outplacement a call and check out what we have to offer.
How much does outplacement cost?
As a followup to the last post on outplacement costs, here’s some info forwarded to me by a buddy.
On CNN there is an article titled Sprint to slash up to 2,500 jobs. In the article it says they are budgeting between $60 MILLION and $80 MILLION for this downsizing.
WOW.
That is $24,000 to $32,000 per person. Clearly there are other parts of displacement costs than just outplacement – but man, that is expensive!
Having said that, the reduction will result in $350 million dollar savings each year…
Outplacement Costs
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.
Why do we need an Outplacment Alternative
I had a conversation today with someone who i would consider one of the leading innovators in the recruiting industry. He told me about an article where someone had found a job through a newspaper ad, and wondered aloud if it was a joke.
This gets me to think. Ten years ago. You could get a job from a newspaper ad, five years ago you could land a job from a job board. So does this mean in five years Monster will be a Joke?
The recruiting industry is an ever evolving ever changing medium. But here is one thing that will never change. It is all based on networking. As a recruiter i found jobs for people if the resume that was in front of me, matched the job i was recruiting for. Whether i found people through Linkedin, Twitter, Facebook, a yahoo usergroup, a local networking group, the job boards, or the company database. I utilized all of the great technology to digitally network.
The question of the day is this. Can you be found?
Outplacement Alternatives – Outplacement Consortiums
I’m not sure if this is the right way to refer to these but it’s what I’ve been calling them: outplacement consortiums.
I have found three significant outplacement consortiums – these are umbrella organizations that pull together a number of outplacement boutiques to compete on a national or international level. In my last company we were part of a building maintenance consortium which competed (very successfully) against the industry heavies – same thing here. These are the three I’ve found:
CPI (Career Partners International) – I think this is the largest.
OI Partners – I’ve met a number of OI Partners (or, boutique firms) and am really impressed with them.
Arbora – This is quite a global organization – check out their website for the global reach. The US division, I think, is called Lincolnshire International.
Pros and Cons to consortiums, but if you are looking for a global or multi-national outplacement solution you’ll want to know about these players – not sure who else I’m missing here as these are the only three I’ve heard of.
