Ask An Expert: What about offering cash in lieu of outplacement services?
China Gorman is one of the foremost thought leaders in the field of human resources today. An accomplished executive with significant experience in career transition services, she also is a member of RiseSmart’s Strategic Advisory Council. Here she answers another question in a series of articles for RiseSmart called “Ask An Expert.”
Question: More and more of our separating employees ask for cash in lieu of outplacement support – something we’ve allowed in the past. I am concerned that this is counterproductive and wondered what you thought about this practice.
(Got a question for China Gorman? Ask it in the comments.)
Answer: Your instincts are right on the money, in my experience. The value of an outplacement program that focuses on getting jobs is worth more than price of the program. Every time.
When your former employee takes the money instead of the program, they’re still unemployed. And still angry with your organization. These days, they could use social media pretty easily to vent their frustration at being laid off. The need to provide outplacement to protect the employer’s brand in this socially connected world has never been greater. But it has to be an effective program.
Additionally, when you offer a choice between the service and the money, the money becomes taxable income to the employee. And should that practice continue, some might counsel that the value of the service should be a taxable event for the employee as well. Not a good precedent to set for the employer and a disappointment to the employee.
On the more emotional side of things, I know of too many situations in which employees prevailed in forcing the choice and chose the money over the service. Months later, with severance and savings exhausted – and no job on the horizon, individuals have done physical harm to themselves and others out of despair. And guess who took the blame? The employer. There’s no way to spin that outcome except as a failure of the organization that terminated the individual.
While happy endings are never guaranteed, utilizing a “use it or lose it” approach rather than a “take the money or the service” approach makes it more likely that that your former employees will transition to a new job quickly. Just make sure your outplacement/career transition provider is focused on delivering real, appropriate job leads and not just teaching your former employees how to approach the job market. Effective outplacement has morphed from a training exercise to a job search readiness and job lead delivery service that relies on search technology and human expertise and support instead of just human support.
If you’re going to hold fast to the “use it or lose it” approach, make sure the service you offer actually will get them placed in a great job quickly.