Outplacement: A Growing Practice

Rohit Khanna, a program manager in a Bangalore-based IT firm, was not
surprised when he was asked by his seniors to participate in a meeting. He
assumed it was another of those routine meetings he was so used to.

But the meeting proved to be more than routine–sitting in the room were
members of the top management, including the HR head. As the meeting proceeded,
Khanna’s worst fears were confirmed. The CEO of the company explained how the
slowdown in business, coupled with falling topline and bottomline figures, was
exerting pressure on the company. He then touched upon the dreaded issue of
excess manpower and the need to downsize.

Just as a sickening feeling began to creep in, the HR head of the company
talked about the silver lining–the setting up of an outplacement cell that
would help employees find suitable jobs in other companies. Khanna not only got
to avail of the career counseling service at the cell, but also brushed up his
interview skills and landed a job in another IT firm... This is a hot new trend.

The rising trend

Madhavi Misra, consultant, Hewitt Associates “How employees perceive outplacement depends a lot on how the entire process is implemented or communicated to them by their company HR wing”Â

The concept of outplacement is still new in India, though this has been
practised in the west for some time now. With the slowdown moving on possibly
into a recession, many companies find it necessary to downsize their employee
numbers in line with their revised requirements, due to reduced or changed
business needs.

Abhijit Mitra of Bangalore-based People One Consulting says, "With the
integration of the global economy, India Inc is no longer immune to global
economic problems and hence the scenario of job contraction in the economy is a
real one. Companies are thus forced to let employees go due to business
realities. The hitherto sacrosanct psychological contract of job security is
today under threat".

Varghese Paul, Associate, Heidricks and Struggles feels that the concept has
not yet matured in India as a lot of companies are doing it for the sake of
formality and the market has not really accepted or matured enough for this. The
initial reaction in many companies is that perhaps the employee has some problem
and that is the reason he is being laid off and not that it is purely a business
decision. Paul adds, "A lot has to do also with the Indian culture, where
not being successful in a venture is considered shameful. But it is only a
matter of time before the market matures to accept this fact."

Polaris Software is one such organization that accepts outplaced employees
from other companies. Raja Krishnamoorthy, president, human resources, Polaris
Software feels that the credibility of the organizations involved in out—placement
of employees and also the organization accepting the out—placed employees is
crucial. Says Krishnamoorthy, ‘‘When one organization knows that the other
has good systems and is reputed, it becomes obvious that the people who are in
the ‘outplacement’ bracket of the former are of good quality. In fact, such
employee have an invisible letter of recommendation as the ‘outplacer’
already enjoys a good reputation." He adds further, ‘‘The core issue of
outplacement is that the new employer should accept the candidate as a good
performer knowing that he or she has been asked to move on due to a job
mismatch".

To make sure that the outplace—ment process is smooth, companies should
offer assistance to their employees. Madhavi Misra, consultant, Hewitt &
Associates feels that this assistance to a departing employee can be provided in
the form of a basket of services–from résumé preparation and interview
skills training to stress management workshops, job search strategies, skills
assessment, career counselling, financial counselling and sessions on changing
professions. Companies also need to be proactive and provide services that are
aligned to the employee needs. This would help the organization in protecting
its employer brand and make the employee transition easily.

Issues to crunch on...

Given the current economic scenario, downsizing has become the norm,
irrespective of whether it’s an old-economy firm or one from the new economy.
And while the traditional mechanism has been to let the individual concerned
leave, there are a few organizations that feel that it would be good if the
employees got a chance to land a job elsewhere. It is here that outplacement
enters the scene. And while some companies outplace employees themselves, others
go to the extent of hiring outplacement agencies for this job.

According to Paul, ‘‘The outplacement process to identify companies, fix
interviews and get jobs should be done by external agencies which should also be
able to talk to the employees and boost their confidence so that they can do
well in their interviews." The companies on their part need to define the
process or understand the external agency’s process closely. They also need to
help the agency in its job. ‘‘For example HR heads of the outplacing
companies can have a word with their counterparts in the company that the agency
has identified. Communicating the issue to the employees involved is also very
critical issue,’’ Paul adds.

‘‘Communication and Control are in-house issues and as such they should
be handled within the organization. The Counselling and Care aspects can be
outsourced to an external agency specializing in the same. The organization may
not have the skills internally to handle the aspects of counselling and care,’’
explains Mitra. Agrees Misra, ‘‘How employees perceive out—placement
depends a lot on how the entire process is implemented or communicated to
them." Adds Paul, "It also crucial that the out—placement agency
understands the organization and have people well trained to handle the process.
The company and the outplacement agency need to work closely to ensure
success."

Do’s and don’ts

Raja Krishnamoorthy, HR chief, Polaris Software “These people are attempting to be ‘outplaced’ with an invisible letter of recommendation, as the ‘outplacer’ already enjoys good reputation”

While the absence of clear communication strategy may create apprehensions
amongst existing employees and the wave of insecurity may bring down
productivity, there are other issues too. Breaking the news of outplacement and
how is a big issue. Organization’s also face a tough task deciding who should
do the so-called dirty job. Also, do organizations need to take other employees
into confidence?

Paul suggests that the immediate boss who works closely with the concerned
employees and in most cases have the best rapport with them should be the right
person to convey the news to them. However, he cautions that all such bosses
need to be sensitised to the situation and break the news to their subordinates
in a one-to-one meeting. ‘‘There are lots of dos & don’ts to be kept
in mind. Never blame the company or say that ‘I understand’ because one can
never understand what an employee might be going through and the problems that
he might face," he adds.

It is also necessary that other employees should be told that certain
decisions have been taken and the business reasons for doing so. Clear
communication about future plans would also go a long way in assuaging the
employees concerns. ‘‘The absence of such communication may bring down
productivity and instigate existing employees to quit at the first available
opportunity," Paul explains.

The employee concerned should also be allowed to use the facilities and
company premises in the interim period before outplacement. A month’s notice
is advisable besides use of resources such as email that would help them in
finding jobs. According to Krishnamoorthy, "It is the moral, human
responsibility of every company worth its salt to ensure that if it is required
to outplace a certain group, then due effort has to be made to ensure a smooth
transition. Proactive approach is not just called for it should be
inherent".

While lot of words can be exchanged on whether outplacing and downsizing are
two sides of the same coin, experts suggest its not. Downsizing may be triggered
by the need of the organization, outplacing is an attempt by the company to
ensure that its really good human resource do not suffer because of the problems
faced by it. For organizations that are unaffected, this may in turn be an
opportunity to find trained and competent people easily at a time of distress.

A win-win strategy in not such a win-win situation, isn’t it?

Amit Sarkar in New Delhi  with
inputs from G Shrikanth in Chennai