Lost your job? Your company will help find one
Outplacement services firms provide career transition services to organisations and help candidates following layoffs.
These factors are fanning growth in the outplacement market in India. Although still in its initial stages when compared to other parts of the world, the outplacement services market is estimated to be in the range of $5-10 million. Going by the number of firms that have started offering these services today, this segment is only going to grow further.
Outplacement services firms provide career transition services to organisations and help candidates following layoffs. RiseSmart, a Randstad company that provides contemporary career transition services, estimates the current size of the outplacement market in India at $3-5 million. A senior executive from ManpowerGroup India said the outplacement market could be $10 million, if unorganised and informal jobs are considered.
RiseSmart general manager (India) Joel Paul said, “Looking at the number of redundancies and M&A activity, the market for outplacement services could rise to $10-15 million in the next few years, and to $15-20 million in the long term. A decade ago, outplacement was present, but it was not very organised. Such services were not being offered on a large scale. It is in the last five years that more companies have started offering outplacement services and this has led to a more organised market with better offerings.” RiseSmart said over 78% of impacted employees landed new jobs through its career transition programme (see graphic). According to a global study by RiseSmart, information technology, consumer goods/packaging, computer software and banking & financial markets are among the top sectors that provide better severance packages and are following best layoff practices. It is these sectors that are also expected to make key changes to their severance policy over the next one year.
“With the rapid proliferation of innovative technologies, businesses are moving towards automated processes that substantially minimises the need for human intervention. Today, technologies such as artificial intelligence, internet of things and robotics are all playing a role in simplifying complex business processes that were earlier controlled by humans. In such a scenario, professionals — especially in the field of IT — are having to cope with redundancy,” said Paul.
Adecco too offers tailor-made outplacement services, guiding employees in making a career move through transition and upskilling. Adecco Group India business head (IT services) Manu Saigal said, “The primary and basic drivers of growth in outplacement are process optimisation and technological improvements made in workforce productivity. Due to this, organisations are choosing to become leaner and make judicious use of manpower. This often means even high-performing employees may sometimes be no longer integral in an organisation. As the nature of work continues to evolve through automation, India as an outplacement market will grow,” said Saigal.
The official from ManpowerGroup said, “Some of the factors driving this market are care towards people and good people practices. But what is also driving organisations to opt for outplacement services is the objective to grow their brand proposition and project their goodwill factor.”
According to a Grant Thornton report, there was a surge in M&A activities in 2018, with telecom, e-commerce, energy, manufacturing, retail and agriculture contributing to high-value deals. Looking at the deal pipelines, Grant Thornton believes the outlook for 2019 is also positive on the consolidation and M&A front.
Usually, outplacement is a goodwill offered over severance and the cost is borne by the organisation. However, in Insolvency & Bankruptcy Code cases, where a company cannot make severance payouts, it’ll not be in a position to pay for outplacement services either. In the case of Jet Airways, which is trying to get funds to restart the airline, salary payment would be a top priority. The company may not engage an outplacement service provider till they figure out a way forward, said industry sources.