business case

Building a business case for career transition

Kerry Simmons Article 3 mins

In this uncertain and difficult economic climate, redundancy costs can present a heavy albeit necessary financial burden. With budgets under pressure and the average time in a role less than five years, organisations may be questioning whether they should add to these redundancy costs by providing outplacement support to affected employees.

Although most business leaders acknowledge that being socially responsible and “doing the right thing” are all valid and noble aims, the rising pressure on budgets means leaders must present a robust commercial business case for all expenditure.

To help you build your own compelling business case, this article highlights some tangible benefits experienced by organisations as a result of offering career transition support.

Improved employee morale, motivation and productivity

Employees remaining with the organisation can be as profoundly impacted as those individuals who lose their jobs. Feelings of insecurity, anxiety and demotivation are all too common and can quickly and negatively impact performance, sickness absence and productivity. Seeing friends and colleagues being let go without adequate support with the knowledge that it could so easily have been them, only adds to the feelings of unease and taints their opinion of the organisation. Employees with these negative emotions and unfavourable views of their employer are unlikely to provide the discretionary effort and collective input organisations need to flourish in these competitive times. In research conducted by the Aberdeen Group, 63% of organisations surveyed cited the desire to improve engagement and retention amongst existing employees as a driver of outplacement initiatives. The same research found that best-in-class companies are 2.5 times more likely to use outplacement services.

Findings by the Centre for Organisational Research (COR) showed that in businesses using outplacement services, both productivity and profitability increased in the 12 months following downsizing, with staff turnover, sick days and lateness remaining the same in the same 12 month period. When comparing businesses using outplacement services with those which did not, productivity increases were twice as common and profit stability or improvement was 50% more likely - evidence that the benefits are tangible, not merely theoretical.

Brand and reputation protection

Social media allows people to share their views to thousands in a matter of seconds. Negative experiences relayed to the masses can quickly damage the employer and customer brand. The speed and high impact this can have explains why our research shows that 71% of participants cited improving reputation and protecting the brand as the key driver for procuring outplacement. However for the same reasons, positive experiences and opinions can also be shared at lightening speed with huge reach. Providing genuinely useful help to employees going through career transition can therefore help to protect and even enhance the organisation’s brand and reputation.

Attracting future talent and shortening the time to hire

We are in the midst of a skills shortage and that shortage looks set to grow in coming years. Organisations are finding it harder than ever to recruit skilled workers, with almost three quarters of businesses struggling to make the hires they need. Combine that with the lowest unemployment rate for 42 years and it’s clear why organisations are in fierce competition for scarce talent.  Research by Aberdeen Group shows organisations with formal outplacement initiatives are 81% more likely to shorten the time taken to fill key positions. In fact they’re are two and half times more likely as those without outplacement programmes to indicate that this metric improved by 10% or more. Due to the faster rate at filling vacancies, these organisations are nearly 50% more likely to reduce the cost per hire too.

Reduction in legal costs

Providing career transition support helps minimise and avoid legal risk, a key driver cited by 12% of participants in a recent survey of ours. A study by the Centre for Organisational Research found that legal action reduced by 72% amongst employees using outplacement services with their displaced staff.  With legal costs running into the tens of thousands per case, reducing the likelihood of legal action by providing career transition support makes sound financial sense.

With such strong evidence of the commercial benefits offering career transition support to employees delivers, HR professionals need to question whether their organisation can afford not to provide it to their employees affected by change. Outplacement support only represents a fraction of the overall cost of a redundancy package, yet is arguably the only part that offers a genuine return on investment.

 

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