April 22, 2002

Another Way for Outplacement Services

by Lorne Hartman, Ph.D. | www.psybasenetwork.com | lorne.hartman@psybasenetwork.com

Psybase is introducing a new Client Relationship Management model in outplacement services, one that is firmly grounded in the disciplines of leadership development and organization effectiveness. This article clarifies how the model is a different road or track (or value proposition) into and through the outplacement space–a very different course or route than the one taken by traditional outplacement providers.

In the late 1980s, I joined a small group of organizational consultants with backgrounds in the behavioral sciences. We saw ourselves as an I/O psychology shop. Shortly after, we started a process of re-branding the firm around a "change management" value proposition. Our learning curve was assisting organizations with the implementation of major change initiatives–mergers and reorganizations, new strategies, etc. In that capacity, we often worked hand-in-hand with outplacement firms whose mandate was to provide career transition assistance to surplus employees … the folks without jobs to fit into as the dust settled from the restructuring.

As the change management consultant, part of my mandate was to ensure that the surviving employees understood the go-forward agenda, were committed to it, and were enabled to behave in ways that were consistent with the new and different performance expectations. The outplacement consultant’s mandate was to pick up the displaced employees and help them find new jobs elsewhere. I was frequently baffled by how different the two approaches were (traditional outplacement versus change management) in the methods and ways of achieving things, despite the apparent overlap–people in transition.

Attempting to make sense of the different approaches sets the stage for Psybase to introduce a new Client Relationship Management model in outplacement services, one that is firmly grounded in the disciplines of leadership development and organization effectiveness. This article clarifies how the model is a different road or track (or value proposition) into and through the outplacement space–a very different course or route than the one taken by traditional outplacement providers.

A new case study on the Psybase website, Communicating With Transparency During Times of Crisis (click here for link to case study) suggests radical differences between the two approaches in sharing information and communicating about a downsizing; in general, traditional outplacement adopts a "closed book" approach … "Let’s keep it under wraps until D-Day (downsizing day). The less they (employees) know the better."

A change management orientation focuses on open and honest communication as a necessary condition for trust in leadership. Other points of disconnect are listed in the table below.


Major Points of Difference Between the Two Approaches

  Traditional O/P The Psybase Way
LOCUS OF CONTROL External Internal
FOCUS OF ATTENTION Leavers Leavers and Those Staying
NOTIFICATION EMPHASIS Transactional Skill Building and Alignment
CUSTOMER PURCHASE Commodity Stewardship


Locus of Control

The primary focus of attention in a traditional outplacement model is the departing employee. When jobs disappear in a corporate reorganization, the outplacement myth is that it’s easier for the impacted employees to blame circumstances in order to put the loss behind them and get on with the re-employment effort.

A change management orientation brings a very different philosophy to addressing the needs of departing employees. Rather than foster an external attribution (i.e., just a victim of circumstances beyond our control) a change management orientation, by definition, seeks to engender widespread involvement and knowledge about the business in order to enhance commitment and motivation. The end result is a more response-able workforce, whether they are part of the residual, go-forward talent pool of the organization or find themselves facing a re-employment scenario.


Focus of Attention

A core principle of change management is that commitment and motivation are necessary conditions if the effort, initiative and cooperation needed for coordinated action are to be achieved. Involving employees (providing information, building awareness, soliciting input, etc.) in the pre-termination planning process increases their sense of internal control and thus better equips them with the required abilities, motivation and insights to implement a strong and effective re-employment campaign if they end up losing their job as a result of the reorganization.

And of course, there is also the more obvious reason: Treating those who are leaving fairly and respectfully in terms of the separation arrangements obviously builds loyalty and trust with those who are staying. It enhances their sense of confidence that should they too be impacted by change in the future, the company will treat them fairly.


Notification Emphasis

For traditional outplacement providers, the actual notification event focuses on logistics and script. It’s a process that is often given a name like "pick-up" or "take-out". The objective is to get the employee off the premises and eventually off the payroll as cleanly and humanely as possible.

In the change management model, the termination meeting is approached as a skill building opportunity for notifying managers and an opportunity to advance a change agenda with residual employees.

Again, two different paths tracking into the same space, and presumably driving towards a similar destination, appear to foster radically different approaches and practices. How is that possible? Part of the answer may be found in different views of the customer purchase between the two orientations.


Customer Purchase

As a service offering, outplacement is about as close as you can get to a commodity. The product lends itself well to packaging from a marketing point of view–"Would you like a 3-month or a 6-month program for this employee? With or without office?"

And, it’s relatively easy to package the product from a delivery point of view. The process of setting an objective, developing a plan and implementing the plan is relatively universal. Everyone goes through it in the same way. The service configuration needs to be tailored to the appropriate level–for example, senior executive versus manager/professional or clerical. Much of the learning can be delivered in a group format (e.g., workshops) or can even be web-enabled. These features only serve to reinforce the commodity-like characteristics of outplacement.

Traditional outplacement firms are drawn magnetically to this proposition. Particularly for the large national and global players, it can be very compelling from an earnings point of view to push increasing volume through a low cost, highly codified operation that requires little if any customization.

Accordingly, it is fairly common at traditional outplacement firms to employ business development professionals with sales and marketing backgrounds at companies like Xerox or ADP. Frequently, the senior executives in these firms are business people with accounting or banking backgrounds.

Non-traditional approaches to outplacement (we’re focusing on change management as the pivot point) step into the space from a professional orientation that is not finance driven (in my case it’s a Ph.D. in clinical psychology). The primary objective is to do the right things for clients and add value.

If that is done effectively (i.e., deliver added value), then the business will experience sustained growth. But that should be seen as a secondary outcome of focusing on the primary objective.

The bottom line is stewardship–my job is to support the departing executives’ re-employment effort and to ensure that the residual business unit is positioned for improved performance.

Stakeholder Relations

From the corporate customer’s point of view, the actual delivery of the service is somewhat opaque. Once the employee is off the company’s radar screen (the laptop has been returned and the package signed-off) the individual client who actually receives the service is disconnected from the corporate client who pays for the service.

Progress reports updating the corporate client on the individual’s campaign status are often problematic in the relationships between stakeholders. For example, severance packages that include claw-back arrangements on salary continuance provisions often influence information sharing between the parties.

Transparent versus opaque differences are demonstrated in many other ways. For example: Traditional outplacement providers worry about how to sign in at client locations for meetings ("We don’t want people to worry unnecessarily or allow rumors to get started"). Traditional outplacement consultants often invite the CEO to spend the downsizing day at their offices in order to avoid exposure to the emotional upset and worry that accompanies such disruptive events.

In contrast, I advise the CEO to be even more visible than normal during times of crisis … in the cafeteria, the lobby or even the parking lot … wherever employees might cluster in order to decompress. It’s the leader’s job to help employees understand the social and emotional dynamics of the day and what it means for them, both those departing as well as those staying.

And it’s my job, as a change management consultant, to encourage and assist senior executives to embrace these opportunities as platforms for personal growth and development; in particular, communicating with transparency in order to develop trust and leadership. At times of crisis, it is even more critical for leaders to both champion and facilitate the power of the social network in guiding the organization forward.


The Psybase Way

The change management consultancy that I helped start in the late 1980s was acquired in 1996 by a global outplacement firm. For five years, as a change management consultant within an outplacement company, I had first-hand experience with how different the two paradigms truly were. I could share literally hundreds of illustrative (and for me painful) anecdotes and incidents.

But I also learned a lot about the potential synergies and points of interface. Out of the effort to make sense of the differences as well as the common ground, there has emerged a fledgling concept for a new value proposition in the outplacement arena.

This new model incorporates a wider perspective because it focuses on those leaving as well as those staying. It provides the leadership coaching to help management integrate and focus their efforts, particularly around aligned and effective communications.

The model also includes a client relationship manager to steward the delivery of the "commodity" features of the service (e.g., logistical support). The CRM serves as a broker on behalf of the corporate client, sub-contracting as necessary with one of a small group of outplacement firms. Rather than being restricted to one service delivery capability, the broker has access to several providers.

This allows for matching the requirements of both the individual and the corporate client with a tailored service configuration. As the steward of service provision (e.g., monitoring/feedback of individual progress and service level agreements), the broker does the "blocking and tackling", managing the "vendors" on behalf of the corporate client.

Fees are no higher than when companies purchase the service directly from traditional providers. According to Frank Miller, Vice President of Human Resources for Compass Group Canada, "the model offers us flexibility and a level of service for outplacement that meets both the individual’s needs and the organization’s requirements very cost-effectively".

At Psybase, outplacement is not a primary focus or go-to-market strategy. It is an ancillary part of the work we do.

Most of my time is spent facilitating senior executive meetings, coaching leaders, designing change strategies and conducting organizational studies. The clients are well-known, brand name firms and I tend to work with people at the top of the house.

Accordingly, I have already established a history and track record with the senior team and hopefully have built a foundation of respect and friendship. I am already in a position of coaching and counseling them as leaders.

And because of my consulting work with the organization, I also have an intimate understanding of their business strategy, structure, culture and values. These considerations significantly enhance my ability to assist senior executives with severances whether they are going to be conducting the termination or an about-to-be separated executive.

Either way it’s an alternative approach, another way–and one that has sufficient merit to consider, particularly when facilitating career transitions at the top of the organization where the commodity-based model is less likely to be appropriate or deliver value.


Contact: lorne.hartman@psybasenetwork.com | Phone/Fax: 905.764.2696 | Toll Free: 866.854.5753