Firing and Outplacement Services: This is How Both are Affecting Employment and Employees

Firing can be depressing for companies but devastating for employees. In the past few months this year, companies like Zomato, BSNL, Macrotech, Nissan India, and Samsung have laid off a huge chunk of their workforce. And, it’s not only popular brands doing the downsizing, startups, too, are actively participating in this slashing game.

In a report by Inc42, former secretary of Department of Promotion of Industry and Internal Trade (DPIIT), Ramesh Abhishek has said that over 16,000 popular startups have created 1.87 lakh jobs under the Startup India initiative. But many startup employees have faced disappointment in the first half of 2019. Whether employee performance or inadequate funds, startups have laid off a subsequent amount of their operations team to work on with lesser resources. It has been a fact that the lack of funding in the seed stage has led to a dearth of potential talent in startups.  Startups like Shopclues, Foodpanda, Rivigo, UrbanLadder, Cleartrip has laid down has down more than 100 employees this year that has proven to be a big blow to freshers and/or entry-level employees.

On the flip side, outplacement companies like RiseSmart, Lee Hecht Harrison, Right Management India, ABC Consultants, and Persolkelly Consulting are getting 35-100% more queries about outplacement services by companies who are laying off employees. This statistic was nowhere to be found a year earlier. While recent tax reforms promise a boost in the employment market, it has not recovered from the previous economic slowdown. So, what used to be previously the initiative of MNCs, are now getting rapidly adopted by other Indian companies to only help the employees tackle downsizing but also to manage the brands’ reputation in the market.

To define it correctly, outplacement is a support service provided to employees to assist them in changing to new jobs. Including both one-on-one and group sessions, the consultancy firms offering outplacement services cover the topics of career guidance, evaluation, job search skills, resume writing, interview preparation and guidance, network development, and negotiation. The concept of outplacement came into being in the 1980s USA when businesses were experiencing huge downsizing and layoffs. They were, therefore, in need of assistance to reduce the ongoing stress that brewed from it amongst both leaving and retained employees. The founder of the career consultancy of Challenger, Gray & Christmas, James E. Challenger, therefore, came up with the idea of outplacement and programs that can be implemented within it to meet the organizational challenges of downsizing.

 

According to a report by Economic Times (ET), several industries in India, like, pharma, automobile, financial services, information technology, and manufacturing are heavily demanding outplacement services. Sue Ann Vaz, the head of valued added services at ABC Consultants told Economic Times that as outplacement firms their job is to provide end-to-end guidance to their clients throughout the entire process of transitioning into new jobs that incorporate sensitization workshops for managers, counseling, and coaching, reskilling and upskilling needs, developing social media presence and also spouse support through counseling.

James Agarwal, the managing director of BTI Executive Search, India, has also told ET that previously outplacement services were provided to only core management, but with the prevalence of layoffs, such services are being extended to junior employees as well as blue-collar employees. Companies exercising downsizing are also under the fear of losing their reputation of being employee friendly and secure companies. Right now, whether startups or big firms, by providing outplacement services, organizations understand the inevitability of rightsizing and not blindly hiring people just to lay them off after some time.

With the current economic condition in India, will outplacement become a new job role for in-house HR team?

One of the most common responsibilities of the human resource department in any organization is recruitment and hiring. Even a layman who does not know much about Human Resource Management will know that. But with the current shift in employment and job market, that day is not far when in-house HR professionals will offer outplacement opportunities to employees during layoffs.

Both the years 2018 and the first half of 2019 have witnessed significant downsizing. Employees, especially freshers, are at a complete loss as to why they are at all getting fired. And, it is difficult for them to tackle such situations. It is because fear and guilt are the primary emotions that they go through. It is even worse for those employees who have relocated for their jobs. They are in an unknown city with multiple bills to pay and survive. In circumstances such as this, outplacement becomes the need of the hour.

And if the current economic condition continues to slog over for a longer period of time with companies slashing off their workforce, it is important companies upgrade their in-house HR departments with outplacement experts, other than outsourcing them.

May it be for maintaining the goodwill of the company or to remove fear from leaving and retained employees, it is necessary for organizations to have a more humanistic approach before they exercise such drastic decisions.