Demand for outplacement services increases

During the last six months, ZweigWhite, a provider of management consulting services and business information to the architecture, engineering, and environmental consulting industries and publisher of Civil Connection, has observed a significant increase in inquires for outplacement services. "Firms that not too long ago were hiring as fast as they could find qualified candidates are now looking to downsize as their backlogs decrease," said Shaw-Chin Chiu, a consultant with ZweigWhite’s Human Resource Management group, which provides outplacement services to the A/E industry. "We’ve been receiving inquires from employers looking to provide a benefit in addition to severance pay that will increase a laid-off employee’s odds of finding a suitable job elsewhere. We’ve also been hearing directly from individuals already laid-off who are looking for help in identifying potential employers."

Survey data seems to support the anecdotal evidence of this trend. ZweigWhite’s 2008 Recruiting and Retention Survey of Architecture, Engineering, Planning, and Environmental Consulting Firms, showed an increase in involuntary terminations from an average of 3.7 percent of total staff in 2007, to 4.7 percent in 2008. A separate survey, ZweigWhite’s 2008 Policies, Procedures & Benefits Survey, showed that 15 percent of firms conducting layoffs offer outplacement services to staff at all levels, with the most popular services including resume preparation and job search assistance.

According to a study conducted by the Reed Consulting Group, 78 percent of employers felt the provision of outplacement could improve the firm’s reputation, and 65 percent of employers believe that providing outplacement improves staff morale, motivation, and productivity. Outplacement services typically include assistance in composing resumes and cover letters, searches for suitable employers and positions, and counseling with respect to job interviews and salary/benefits negotiation. Typically, the service is paid for by the former employer but provided by an outside party. Some employers will give the employee the option of receiving some additional severance pay (usually an amount less than the cost of the outplacement service). Providing such a service can send a strong positive message to the remaining workforce and the marketplace that the company cares about the welfare of its staff.

In a related matter, ZweigWhite is tracking the progress of proposed federal legislation that could compound the already difficult process of downsizing staff. A proposed amendment to the Worker Adjustment and Retraining Notification Act would make many more firms subject to notification requirements in the event of large layoffs. The proposed amendment, titled the FOREWARN Act of 2007, would expand the original legislation so that it would apply to firms with 50 or more employees (down from the original bill’s limit of 100), requiring such firms to provide formal notices to staff and regulatory agencies in the event of "mass layoffs" or "plant closures."

Under the amendment, a firm closing an office, resulting in the layoff of 25 or more employees (down from the original bill’s limit of 50), could be subject to the notification requirements of this bill. While this amendment is still a long way from becoming law, larger firms considering significant layoffs should check that they are in compliance with the current legislation.