How to Choose the Right Outplacement Firm

As 73% of Organizations Consider or Implement Layoffs, Outplacement Services are Invaluable Severance and Separation Benefits

When restructuring and reducing headcount, you can make a huge difference for departing employees with support through an outplacement firm. The right outplacement company helps former employees work through the emotional side of career transitions, discover new career paths, and find roles aligned with their unique goals and skills.

By softening the blow of an unexpected or unwanted career transition, outplacement services even help preserve the outgoing employee’s positive feelings toward the organization and their former colleagues.

Unsure how this relates to the bottom line? Investing in an outplacement firm strengthens your employer brand among past, present, and future employees.

Former employees may become evangelists for your company as an employer. They may be advocates or future customers for your product or service. They may return as boomerang employees, potentially lowering recruitment costs.

Or not, depending on the transition and post-employment experience.

A 2023 Harvard Business Review study of a diverse range of industries and organizations found 28% of ‘new hires’ were actually former employees who’d left the company within the last 36 months.

These boomerangs often bring enriched experiences in the industry and sometimes, from working for a competitor.

So, choosing the right outplacement firm is essential—but where do you begin? This article provides guidance on selecting a partner that genuinely supports your organization through one of its most critical and challenging business processes.

What are Outplacement Services?

Just to level-set, when we talk about outplacement services, we’re referring to ways to support laid off or redundant workers with:

• 1:1 Career Coaching
• Optimization of Resume/CV and LinkedIn Profile
• Connections to Jobs
• Upskilling and Reskilling tools
• Interview Preparation
• Career Development support
• Emotional and Psychological Support

Outplacement firms do more than assist with job searches. A truly effective outplacement partner provides essential emotional and professional support, helping employees navigate their next career phase.

They offer ongoing guidance to help individuals process change and explore new career paths. This helps workers secure roles aligned with their goals and aspirations for long-term success.

Who is the outplacement decisionmaker?

In LHH’s Severance & Separation Benefits 2024 Benchmarks Study, we surveyed 700 US and Canadian organizations and learned HR teams chose the outplacement services firm 58% of the time, followed by CEOs with 35%.

For HR professionals and other decision makers, it’s essential to select an outplacement company that offers full support.

Key Criteria to Consider When Choosing an Outplacement Firm

There are main factors to evaluate among potential outplacement companies. These areas are critical to ensure former employees receive the best possible job search support. They also safeguard your brand from the risks of choosing the wrong partner for such a sensitive business project.

Emotional and psychological support

Career transitions can be tough, especially when unexpected. But as John Morgan, LHH’s President of Career Transition & Mobility and Leadership Development Solutions has said,

“Layoffs don’t need to be bad news for the individual or employer. With the right support, both may move forward with a clearer view of the future and strengthened by the experience.”

Look for outplacement partners that offer career counseling or resilience training to help individuals work through these challenges. Partners that provide this support show they care about the employee’s well-being, essential for reasonable long-term career choices.

Related: How to Conduct Layoff Meetings Compassionately

The gap between worker sentiment and organization plans

2024 Research by LHH’s parent company, The Adecco Group, found 83% of surveyed workers intend to stay with their current employer, up from 61% in 2022.

LHH’s Outplacement & Career Mobility 2024 Trends Report shows that most (57%) workers are worried by news of layoffs across the economy. It seems they have good reason. LHH’s trends research also determined 73% of surveyed organizations intend to or already have begun layoffs.

So, an accessible, visible outplacement program helps reassure your people that even their personal worst-case scenario doesn’t mean the end of a meaningful career. It also signals to remaining employees who may consider “quiet quitting” they’ll be supported by a comprehensive severance policy if necessary.

Personalized career coaching

Personalized coaching is one of the most important services an outplacement partner can offer. After losing a job, people often feel lost and uncertain about their future. They need to know what’s next, what they’re capable of, and how to make their job search effective.

Above all, they need to feel supported by an expert who’s there for them, every step of the way. One of the key priorities is to form a clear view of their skills, capabilities, and how to adapt them to new contexts.

In LHH research, 59% of workers agreed they wanted to develop new skills to propel their careers but didn’t know what to pursue. Personalized career coaching can bridge that gap.

Employees need tailored advice and support to match their unique skills and interests with available career opportunities. Be wary of one-size-fits-all approaches; these are less likely to help employees find roles that fit them.

Research for LHH's Severance & Separation Benefits 2024 Benchmarks Study shows that in the United States, employers tend to prefer a tech-led model of outplacement support. Canadian employers, on the other hand, have a strong preference for in-person coaching. There’s no harm in an organization preferring one way or the other, but the organization’s preference shouldn’t override that of the affected individual.

Job placement success rates

Success rates in placing individuals are a key metric.

• How often are former employees landing roles, and how quickly?
• Does the vendor’s success extend across various industries or specific fields?
• Is the new job better or worse than the previous one?
• How satisfied are your former employees with their new offer?

This data offers valuable insight into the effectiveness of your outplacement vendor. It shows whether your team members were placed in roles they truly wanted, versus forced to accept the first available choice at the expense of quality.

Related: Statistically, more than 91% of candidates working with LHH outplacement services find new roles within six months of beginning their program. LHH Recruitment Solutions is a significant part of this success.

Employee satisfaction and follow-up

How satisfied are former employees after finding a new role through the vendor’s services? High satisfaction ratings show the vendor is truly meeting the needs of individuals and helping them secure fulfilling roles during their career transition.

• Did they gain valuable insights and expertise on the evolving job market?
• Did their self-esteem rebound, paving the way for the confidence and agency needed to succeed in their new role?
• Were they exposed to a variety of career opportunities, enabling them to make informed decisions?
• Did they feel supported throughout the process? Some vendors even follow up after the outplacement program ends to ensure continued success, showing their commitment to long-term results.

Career exploration and guidance

Great outplacement vendors go beyond helping employees look for roles like their last job. Instead, they guide them in exploring all kinds of career paths. Sometimes, people discover new fields or roles they hadn’t even considered.

We’ve already mentioned how most participants in our career transition research wanted to learn new skills, but didn’t know what to pursue. In the same research, 45% also agreed that they would like to change roles, but don’t know which new career path to take (vs. 35% who disagreed).

To meet these needs, look for vendors that offer strong career exploration resources and tools, as well as job placement and counseling.

New LHH Career Studio Digital Platform Offers Expert Human Support Combined with Powerful Tech & AI Tools

In 2023, LHH introduced LHH Career Canvas, a career inspiration tool designed to help job seekers (and employees) break out of default or assumed career paths. As more companies and individuals recognize the value of career pivots and non-linear career paths, LHH Career Canvas is the tool your high school counselor could only dream of.

It’s available as part of LHH Career Studio, a new digital platform offering a multitude of resources along with support by caring, compassionate, and seasoned job coaches.

LHH Career Studio provides a single dashboard experience to organize job applications, track interview progress, and manage follow-ups. It also provides refreshers on job search skills and techniques – especially helpful in competitive markets.

To give job seekers an edge in reemployment, LHH Career Studio also offers opportunities to upskill AI and digital credentials, imperative to the future of work.

On top of a wealth of resources and tech tools, LHH offers a global network of experienced, empathetic coaches to help job seekers navigate what can be an emotionally and logistically challenging time.

With research showing links between job loss and everything from mental health difficulties to children's lower test scores in school, personalized, human support is crucial.

Explore LHH Career Studio and how it helps job seekers of all experience levels

Use an Outplacement Firm Evaluation Scorecard

To make your decision easier, we recommend using an evaluation scorecard that allows you to rate vendors across these areas. An interactive scorecard can help you quickly compare outplacement companies and feel confident in your choice. Here’s how it can help:

• Streamline the Evaluation Process: Organize data on each vendor so you can see strengths and weaknesses at a glance.
• Customize it to Your Needs: You can personalize the scorecard to reflect your company’s values and priorities.
• Ensure Accountability and Transparency: The scorecard helps create an objective, fair decision-making process. This is often especially valuable when choosing an outplacement partner for a larger organization.

Reputable outplacement firms should be able to provide data, testimonials, and success stories as part of the selection process. As you speak to a consultant, involve them in your procurement process to help you make your business case to your stakeholders.

Learn more about how to choose a comprehensive outplacement firm for your employees