Keep Outplacement Services and Severance Packages Separate

Publication
Layoff

When organizations terminate an employee and decide to offer a severance package, it has become common practice to tie in outplacement services as part of that package. This seems like a logical approach – hoping that it may nudge the terminated employee into signing a severance agreement – but we strongly discourage it.

The First 30 Days Matter
The first 30 days after an employee has been terminated is a critical time for individuals going through this significant change in their lives. Exiting employees may be going through a wide range of emotions including disbelief, anger, depression, and financial insecurity. They may be frustrated and negatively talk to remaining employees. Outplacement coaching that starts within the first week of termination helps individuals deal more effectively with their emotional response. In addition, it helps sustain morale and productivity among remaining employees because they know that the exiting employees are getting assistance with planning their next career move.

If outplacement services are tied to a severance package, they may not be able to take advantage of these services right away. Severance agreements are legal contracts between an employer and employee that require giving the employee at least 21 days (45 days if it’s a group of employees) to consider the waiver of age claims language in the contract before signing it. Waiting this long to provide outplacement services could contribute to water cooler conversations multiplying, rumors churning and employees losing focus on their job responsibilities. The missed opportunity to provide outplacement services right away could cause a ripple effect of damaging consequences, including unexpected additional turnover.

Dangling the Outplacement Carrot
Offering outplacement services as part of a signed severance agreement does not seal the deal, nor does it cause them to sign the agreement any sooner. Often, terminated employees do not always understand all the elements of outplacement services and how it will help them focus on their future. These services need to be explained so that terminated employees recognize they will have a safe place to assess their skills, strengths and opportunities for future employment. This is an emotional journey that is different and separate from the legality of severance agreements and an individual’s potential right to sue.

Keep Outplacement Services and Severance Packages Separate
Providing outplacement services sends a message to your employees that you are committed to helping them succeed even when they may no longer be a fit for your organization. Severance packages are designed to minimize the potential risk of litigation, which may be necessary but sends a different message to your employee about providing something of value in exchange for waiving the right to sue for age discrimination. They are not designed to be tied together. Employers should consider outplacement services to any terminated employees to help them secure new jobs quickly.

If your organization is interested in helping exiting employees move onward in their job search strategy, MRA’s experienced Career Management Coaches can help. Give us a call today at 800.488.4845!

Source: Beth Mathison, Director of Employment Services, MRA - The Management Association

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