Outplacement: A Strategic Tool for Ethical and Effective Corporate Restructuring

Outplacement: A Strategic Tool for Ethical and Effective Corporate Restructuring

As businesses strive to remain competitive, adapt to market changes, or streamline operations, the human cost of these decisions can be significant.

However, forward-thinking companies are increasingly recognising outplacement as not just a compassionate gesture, but a strategic tool that can yield long-term benefits for both the organisation and its departing employees.

Consider the case of “PlantCo”, an amalgam of two of our clients, a long-standing industrial powerhouse facing the difficult decision to close one of its divisions employing over 100 workers. Many of these employees, having dedicated 15 to 40 years of their lives to the company, find themselves suddenly thrust into a job market they barely recognise.

Take the example of John, a 58-year-old foreman with four decades of service. He epitomises the challenges faced by many in this situation. “I’ve never even used LinkedIn,” he confesses, his bewilderment evident. “How am I supposed to compete in this digital job market?”

Similarly, Sarah, a 35-year-old machine operator with 15 years at the company, voices her concerns: “I’ve heard about these computer systems that read resumes now. I’m afraid mine will never make it past that first hurdle.”

Their anxieties are not unfounded.

The modern job search landscape, with its emphasis on digital networking, ATS-optimised resumes, and keyword-rich applications, can be daunting for those who have been out of the job market for years or even decades.

It’s in scenarios like these that outplacement services emerge as a crucial strategic tool for companies undergoing restructuring.

By investing in outplacement, organisations can transform a potentially negative situation into one that offers multiple strategic advantages:

1. Maintaining Corporate Reputation: In an age where corporate actions are under constant scrutiny, how a company treats its departing employees can significantly impact its public image. By providing comprehensive outplacement services, PlantCo demonstrates its commitment to its workforce, even in difficult times. This can help maintain positive relationships with the local community, customers, and remaining employees.

2. Mitigating Legal Risks: Layoffs, especially those involving long-term employees or union workers, can sometimes lead to legal challenges. Outplacement services can serve as a goodwill gesture, potentially reducing the likelihood of lawsuits and demonstrating the company’s efforts to support affected employees.

3. Enhancing Employer Brand: A strong employer brand is crucial for attracting top talent. By offering outplacement services, PlantCo shows potential future employees that it values its workforce and is committed to their well-being, even beyond their tenure with the company.

4. Maintaining Productivity: The announcement of layoffs can often lead to a decline in morale and productivity among remaining employees. By visibly supporting departing colleagues through outplacement services, companies can help maintain a more positive atmosphere and keep remaining staff focused and productive.

5. Facilitating Smooth Transitions: Outplacement services can help employees like John and Sarah transition more quickly into new roles. This can be particularly beneficial if the company needs to maintain operations until a specific date or if there’s a possibility of re-hiring in the future.

6. Supporting Corporate Social Responsibility (CSR) Initiatives: Many companies have CSR commitments related to community support and employee welfare. Offering comprehensive outplacement services aligns with these goals, demonstrating a tangible commitment to corporate values.

7. Boosting Employee Morale: Offering outplacement services can help maintain morale among remaining employees by demonstrating the company’s commitment to supporting staff even during difficult transitions. This can lead to increased loyalty and productivity among the workforce that stays with the organisation.

As PlantCo implements its outplacement program, the benefits become quickly apparent. John, initially sceptical, found himself energised after his first career coaching session. “I never realised how good my training was here and that many of skills could transfer to other industries,” he says. “I’m actually excited about the possibilities now.”

Sarah, after receiving insights  on modern job search techniques, felt more confident. “I’ve set up my LinkedIn profile and learned how to tailor my resume for different jobs. I feel like I have a fighting chance now,” she shares.

For PlantCo, the investment in outplacement is paying dividends beyond just helping their departing employees. The local press has run positive stories about the company’s commitment to its workforce, contrasting it favourably with other businesses that have left laid-off workers to fend for themselves. 

This positive coverage has helped maintain relationships with the local community, suppliers and customers, mitigating some of the negative impacts of the restructuring.

Moreover, the remaining employees have noticed the company’s efforts. “Seeing how they’re helping our colleagues makes me feel more secure,” one employee comments. “It shows they really do care about us.”

The company’s HR Director notes another unexpected benefit: “We’ve actually had an increase in quality job applications since announcing our outplacement program. It seems potential employees see it as a sign that we’re a responsible employer.”

As the restructuring process continues, it’s clear that Midwest Manufacturing’s strategic use of outplacement services is yielding multiple benefits. It’s smoothing the transition for departing employees, maintaining morale among those who remain, preserving the company’s reputation, and even enhancing its appeal as an employer.

In today’s uncertain and volatile world, where corporate actions are increasingly scrutinised and the war for talent is ever-present, outplacement has evolved from a mere perk to a strategic imperative. It’s a powerful tool that allows companies to navigate the choppy waters of restructuring while upholding their values, protecting their brand, and demonstrating genuine care for their most valuable asset – their people.

For companies facing the difficult decision to downsise or restructure, the message is clear: outplacement is not just a cost, but an investment. 

An investment in your people, your reputation, and ultimately, in the long-term success of your organisation. In the end, how a company treats its employees when times are tough can be the true measure of its corporate character – and a key determinant of its future success.

Photo taken from: Depositphotos

Do you need help with supporting your employees?

Want to support your employees through restructures and redundancy with effective onboarding, stay interviews, offboarding, and outplacement programs? Get in touch with me today to organise a 1-1 call to see how Career365 can support you and your team. Click here for more information.


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Greg Weiss

Greg Weiss is the founder and director of Career365 and Australia’s leading career coach. Greg has coached well over a thousand people from recent graduates to CEOs as they pivot, re-launch and accelerate their careers. He is the author of three practical books and the creator of three online courses: “Career Clarity. How to find career fulfillment”; “Career Networking. How to unlock the hidden job market”; and “Career Success. How to succeed in your new job”.

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