This past year has been an unprecedented and unpredictable time for both individuals and organizations alike. Lockdowns around the world have forced leaders to scale back or shut down operations and reduce or restructure their workforce. Whatever the reason, letting an employee go is never easy, and if handled poorly, could have significant negative impacts on an organization including brand reputation, litigation, and the morale of remaining employees. It is crucial that companies have a career transition strategy during an employee departure.
What is Career Transition?
Career transition, or outplacement, is a service provided to a departing employee to assist with an effective and smooth transition to a new opportunity, or even retirement. Career transition programs vary but typically include career counselling, resume and cover letter development, interview training, career search strategies and creative networking assistance. The service cost is usually paid for by the employer.
Why Companies Provide Career Transition Services to Departing Employees
Most employers care what happens to employees they can no longer retain. They want exiting employees to leave on good terms and do well in the future. When an employee does not work out with one organization, it does not mean they will not thrive with another – but being able to compete in today’s market can be difficult, especially when unemployed. Offering assistance smoothens the transition process for the offboarded employee, and in turn, can minimize the risks for the employer.
Brand Reputation
The way a company treats its employees has a significant impact on their overall brand reputation. In today’s digital, social-media era, everyone has a platform available to them to share negative (and positive) experiences with brands. Between social media and employer review sites like Glassdoor and Indeed, a negative employee offboarding experience has the potential for mass reach. Studies suggest many consumers will stop purchasing a brand after hearing of the company’s poor employee treatment. Your brand reputation directly impacts your bottom line.
Reduced Legal and Financial Risk
When employment is terminated, employees are more likely to take legal action against an organization if they feel they have been treated unfairly or when a lawsuit seems like a way to make ends meet when struggling to find work. Although ending the employment contract may be well within an organization’s rights, there are still time and costs associated with litigation. Litigation is less likely if the outplaced employee feels respected and supported in their search for a new job. A study by the Centre for Organizational Research found that for employers using career transition services, legal action by displaced employees declined by 72%. Employees who go through Career Transition services find new jobs on average of 65% faster than those who don’t. This has a financial impact on companies providing severance pay to departing employees, with career transition support costing only a fraction of the price of overall severance packages.
Clients
The process of terminating an employment contract can be uncomfortable and create feelings of hostility. When this happens, a departing employee could take clients with them or if they land a new job with an existing client, their hostile feelings towards your organization could motivate them to sabotage the relationship. Alternatively, supporting an employee through career transition can improve the relationship between the employee and employer. Maintaining a good relationship could mean the employee becoming a new client in their next role.
Employees
Colleagues will inevitably learn about an employee’s departure. A respectfully handled outplacement with the support of career transition services, gives remaining employees a sense of security and respect for the employer. Research shows that employees who feel respected are more satisfied with their jobs and are more loyal and grateful to their organization. Outplacement also has a significant impact on recruiting new talent as well. Studies found that 55% of job seekers who read a negative employer review decide against applying to that company.
Individuals in career transition face uncertainty and challenging circumstances that impact their personal, financial, and professional lives. Whether it is a senior executive or a junior employee, these challenges hold true. Offering career transition services benefits both the departing individuals and organizations they are leaving.
Interested in learning more about Career Transition support for organizations and their employees? Connect with Katherine Risley, Managing Partner to explore potential options.
Do you require career transition services? Learn more about the outplacement journey.
