The decision to downsize or layoff employees is never easy, but it’s often necessary for the survival or growth of a business. One way to ease the burden of those affected employees is to offer outplacement services as a way to help them navigate the job market and find new employment. However, the cost of providing these services can be a barrier for businesses. In this article, we’ll discuss some factors that determine outplacement pricing and how to determine what’s fair.
What is Outplacement?
Outplacement is a service provided to employees who have been laid off, offering assistance with job searching, resume writing, and interview preparation. These services help laid-off employees quickly re-enter the workforce without facing too many challenges. Outplacement services are typically offered by companies that specialize in career coaching and development. Many businesses choose to offer this service as part of their severance package, along with other benefits such as health insurance continuation.
Factors That Determine outplacement pricing
1. Service Provider
The cost of outplacement services varies between providers. Some outplacement companies offer services in-person, whereas others offer virtual coaching. In-person services are generally more expensive than virtual services due to the cost of renting space, hiring staff, and other overhead expenses. Virtual coaching is cheaper because it doesn’t require physical space, staff, furniture, and equipment.
2. Level of Service
The level of service provided by the outplacement company also affects pricing. Some companies offer basic services like resume review and interview preparation. Whereas, more advanced services such as career coaching, job-search assistance, and networking services are more expensive. Employers can select the level of service that best suits their laid-off employees’ needs and their budget.
3. Geographic Location
Outplacement pricing also varies by geographic location. Depending on the region and state, outplacement services may cost more or less. This is because the cost of living and doing business vary between cities. Employers can research average outplacement pricing based on location before choosing to work with a particular provider.
4. Specialization
Outplacement providers that specialize in a certain industry or geographic region typically charge more than generalist providers. Specialization comes at a premium, but it also means the provider has a deep understanding of the job market for the industry or region in question. This knowledge may be worth the extra cost for employers, as laid-off employees may have an advantage in finding new jobs.
How to Determine Fair outplacement pricing
Now that you know the factors that affect outplacement pricing, you might wonder how to determine if the pricing is fair. Here are a few tips to help you:
1. Research the Competitive Landscape
The outplacement industry is highly competitive, with many providers offering similar services. Research the different types of outplacement providers, their pricing, and services offered. Once you have gathered all this information, you can compare prices and select a provider that offers the best value for money.
2. Request Quotes
Employers can request quotes from several outplacement providers and compare them to determine fair pricing. Be sure to provide complete information about the number of employees being laid off and the level of service required. More information will help you get a more precise quote.
3. Negotiate Prices
Employers can negotiate prices with outplacement providers, especially if they are the only provider offering services to their employees. Companies can also consider leveraging their size and bargaining power by negotiating with numerous providers and selecting the best price and quality of services.
4. Monitor Pricing Trends
Employers can keep track of industry trends and monitor outplacement pricing to stay competitive. As the economy improves, more providers may enter the market and drive competition, resulting in lower pricing. Employers should regularly update themselves on outplacement pricing trends and quality of services to ensure they are getting value for their money.
Conclusion
Providing outplacement services to laid-off employees is an excellent way to soften the blow of a layoff or downsizing. But it’s critical to consider pricing when choosing a provider. Employers need to select outplacement providers that offer high-quality services at fair pricing. This requires thorough research, pricing comparisons, and negotiation. By following the tips provided in this article, employers can ensure that they and their employees get the best outplacement services and value for their investment.