What is Outplacement: Meaning And Reasons Why It Is Beneficial

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Outplacement is the firm or company’s way to compensate an employee they lay off in some way. They help with the relocation of the employee and help them find a new job placement. Hence, it is beneficial not only to the leaving employee but the firm. Read further about What is Outplacement: Meaning And Reasons Why It Is Beneficial.

Layoffs are no uncommon matter in the era of the pandemic. With so many people losing their jobs due to an economic crunch, the condition of the employees is concerning. Hence, outplacement, or relocation to newer places is the ideal solution.

What Does Outplacement Refer To?

Outplacement refers to assistance or helps arranged by the firm for an employee who has been removed from their post. While layoffs are inevitable, especially now, such assistance can be of great help to the employee that is leaving.

Such outplacement is a boon for the employee as they can get support in their job search and make the process a little easier. Even minor assistance from the firm can mean a lot in an individual’s job search.

Hence outplacement is an optional step that firms take, but it is exceptionally helpful. And the firm also benefits from such outplacement, not only the employees. It can help firms considerably in the future.

Why Is Outplacement Done?

Outplacement, as mentioned, is an optional step taken by the firm. It means that not all firms are obliged to do so when they remove employees from their positions. So why do they opt for outplacement?

Outplacement would require some money, time, and effort from the firm’s side, so is it even beneficial? Turns out that it is one of the most beneficial actions so the cost of it is still manageable.

Outplacement helps maintain the firm’s image among employees, both currently working employees and potential future employees. It helps employees build trust with the company and not feel unsafe in their job.

Whereas, firms who send off employees without any outplacement create fear among their employees. It makes them feel that they may also face such layoff, so it may lead them to search for further job opportunities. Hence, outplacement is necessary for firms to build trust with their employees even in such times.

What Are The Benefits Of Outplacement For The Employee?

Employees most obviously benefit from outplacement since it is helpful to them. But there are many other factors and features that make outplacement ideal for employees. Here are some such reasons why outplacement is beneficial for employees.

  • It Is Cost-Effective– For an employee, the job search process is not only extensive but also expensive. The costs of job searching are often too much for an employee who is already in an adverse financial condition. In such a case, having someone else cover the expenses for applying and assisting the job search is one of the best merits one can have. Outplacement helps an employee cover the job search costs without putting in too much money and still be able to get job opportunities.
  • It Is Helpful To Long-Term Employees– For employees who have remained in the firm for a long time, the job search process becomes foreign. They have not opted for job search for so long that they might not be up to date with the latest job search tools. Then they would need assistance with the job search and the firm providing such assistance would only benefit them. They would be able to effectively search for a job even without being used to the job search process.
  • It Can Speed Up The Job Search– Job searching is extensive, so it is also too long for some people. And time is precious for people who need to find a job and support themselves and their families. Having someone backing you in the job search is essential in such a case. It helps you save precious time while still searching for jobs. Knowing where to apply and where to visit in terms of jobs will save you loads of time and effort.
  • It Can Help With Newer Fields– For employees who want to leave their current fields and try their hand in newer fields can also avail the benefits of outplacement. As you may know, switching to newer fields would be difficult for an average job seeker. But having a firm and their resources backing you would help you apply in the right places and have a higher chance of getting placed. 
  • It Can Help Prepare For Future Jobs– When firms provide outplacement, they usually assign an outplacement mentor to the leaving employee. The mentor’s job is to guide the leaving employee through the job search process and help refine options. These mentors can also help the job seeker with preparation for their applications and interviews. 

What Are The Benefits Of Outplacement For The Employer?

Now we come to the part which is more complex to understand in terms of outplacement. Outplacement is certainly beneficial for employees but the reasons it is beneficial for firms are different.

Here are some of the reasons why outplacement is perfect even for employers and firms:

  • It Helps Build Trust With Employees- The employees currently working for a firm may feel threatened by seeing their peers getting laid off. It would be concerning for current employees as they would fear that they may be in the same place as that employee in some time. So outplacement will help build trust that even if an employee faces layoff, they will be able to get placed in another company.
  • It Helps Attract Future Candidates– People who are currently job searching always refer to previous employees’ experiences. And through these employee accounts, they can get an idea of how the firm treats its employees. So having ex-employees who are dissatisfied with their treatment in the company would only harm your firm. To make their review and experience of your firm a little better, you can provide them outplacement.
  • It Can Maintain The Image Of The Firm– The public image of the firm and its reputation decide the sales and progress of the firm directly. A firm that is known for mistreatment and excess layoffs may not hold up well in the current market. While you cannot avoid layoffs in the pandemic, the least you can do is to assist the leaving employees. It will keep your brand image maintained and help you keep good relations.
  • It Can Make The Firm Stand Out From Competitors– Firms that treat their employees well are not only attractive to candidates, but also attract skilled workers. A skilled and highly trained worker would look at many firms and choose the best firm out of them. So acquiring such an employee would be beneficial for you, so you need to stand out from others. Outplacement may make your firm more appealing in the eyes of a potential candidate.
  • It Can Prevent Further Layoffs– If an employee feels that their firm may kick them out unexpectedly, they might feel threatened. Then they would begin to look for jobs themselves and if they find a suitable one, resign from the firm. Since they would be afraid of layoffs, they would want to leave work on their own accord. Having such resignations will only be harmful to the firm, so having outplacement for employees becomes essential.

How Can You Arrange For Outplacement For Your Employees?

You can opt for outplacement mentors for your leaving employees to proceed with outplacement. Before they have to stop working at your firm, they can begin their job searching process.

With the help of the mentors, you can help such employees find existing job offers and apply to them. The mentors can also help the employees when they want to explore a new field and how they must go about it.

You already know why outplacement is ideal for both parties, hence opting for it is the best choice. The costs may seem unnecessary, but they will give you a long-term benefit in your firm, so they are worth it.


Outplacement may seem like a tedious and time taking process from the perspective of a firm. It is undoubtedly beneficial for the employee, but you would wonder what its benefits are for the firm.

Outplacement helps maintain the firm’s image in the long run and also helps them secure their current or future employees. It is perhaps more beneficial to the firm than it is to the employee, which is why it is ideal.

Frequently Asked Questions

  1. What is the meaning of the outplacement?

Outplacement means relocating or giving the employees further work opportunities after they have been removed from their position at a firm. Firms do this when they lay off employees due to many reasons.

  1. Why is outplacement ideal for the firm?

Outplacement is technically time and resource-consuming, but it is very beneficial for the firm in the long term. It creates a positive rapport among the current employees of the brand and protects the brand image too.

  1. Is outplacement necessary for firms or companies?

No, outplacement is an optional step that firms take while layoff. However, it is beneficial for the firms, so many such firms choose to do so. But it is in no way necessary for these firms and is merely a choice.

What is Outplacement: Meaning And Reasons Why It Is Beneficial

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