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In layoff season, outplacement firms gain traction

Outplacement service firms partner with companies in case of mergers or cost-optimisation drives to assess redeployment opportunities of existing staff, train managers on layoffs, find alternate jobs for those impacted, and also play the role of ...

Nov 14, 2019, 10.38 AM IST
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(This story originally appeared in on Nov 14, 2019)
A large bank wanted to trim its headcount to optimise costs. In an earlier instance, it involved the HR and finance teams. This time, the bank brought in outplacement service providers who helped the company achieve cost savings — without laying off any staff, and redeploying them in relevant roles instead.

Outplacement service providers partner with companies in case of mergers or cost-optimisation drives to assess redeployment opportunities of existing staff, train managers to notify employees if there are any layoffs, find alternate jobs for those impacted, and also play the role of career coaches, among other tasks.

Outplacement and career transition divisions at large HR firms told TOI they have seen an average 30% increase in service inquiries in recent months, and almost 35-40% growth in business in the past one year.

Randstad RiseSmart general manager Joel Paul says large multinationals have always used outplacement services, but companies of all sizes are seeing value in career-transition assistance. The client mix today is also more diverse with 60-40 MNCs and Indian enterprises, he added.

IT/ITeS, pharmaceuticals and banking & financial services are the top sectors that employ outplacement service providers now. Initially used to manage mid- and senior-level restructuring and layoffs, companies engage such services across levels today including for front-line staff.

Digital disruption and changing business models will only accelerate the need for career-transition services and companies want to take the less painful way out without hampering their culture, Adecco Group India country manager & MD Marco Valsecchi said. The process of finding alternate jobs for the displaced staff — often senior talent — is also getting tougher, the HR firms admit.

Right Management (part of ManpowerGroup India) country manager Prashant Pandey said, given business conditions, outplacement services are more challenging now than what it was around two years ago. “Existing employees are watching closely how employees impacted (by a restructuring) have been dealt with. If they feel they are not being treated well, you have a building full of disengaged talent,” he adds.
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