In today’s business world, many companies are challenged with the difficult task of downsizing their workforce. When this happens, employees are often faced with the prospect of losing their jobs and the financial stability that comes with it.
To help ease this transition, many companies offer outplacement and/or severance packages. While these terms are sometimes used interchangeably, it’s important to understand the differences between the two and how they can benefit both employees and employers.
Definition of Outplacement Services
Outplacement is a service provided to employees who have been laid off or terminated from their jobs. The purpose of outplacement is to help employees transition into new jobs as quickly and smoothly as possible and minimize the time they spend unemployed.
How Outplacement Works
Outplacement services typically include career coaching, resume writing assistance, job search support, interview coaching, and networking opportunities. Outplacement is usually provided by external companies that specialize in career coaching and job placement. These companies work with the employees who are leaving the organization to provide tailored support and assistance. In some cases, outplacement services may also include access to job fairs, networking events, and other resources designed to help employees connect with potential employers.
Benefits of Outplacement Services
One of the main benefits of outplacement services for employees is that it provides them with the tools and resources they need to find new employment quickly. This can help to reduce the financial and emotional stress that often accompanies job loss. Additionally, outplacement services can help employees to identify new career paths and explore new job opportunities that they may not have considered before.
For employers, outplacement services can be a valuable tool for maintaining positive relationships with former employees. By providing outplacement services, employers demonstrate their commitment to supporting their employees even during difficult times. This can help to enhance the company’s reputation and build goodwill among employees, customers, and other stakeholders.
Definition of Severance Package
Severance is a financial package that is paid to employees who are laid off or terminated from their jobs. This package is designed to provide financial support to employees who are suddenly without a job. Severance packages can include a lump sum payment, continued health benefits, and other perks. Severance packages are typically managed by the HR department of the employer.
How Severance Works
The way severance works varies from company to company. Some companies offer a fixed amount of money based on the employee’s years of service, while others may offer a lump sum payment or continued health benefits. The amount of severance pay can also depend on the reason for the employee’s termination. For example, if the employee was laid off due to company restructuring, they may receive a larger severance package than if they were fired for cause.
Examples of severance packages include a certain number of weeks of pay, continuation of health benefits for a certain period of time, and payment for outplacement services to help employees find new jobs. Some companies may also offer additional benefits such as stock options or retirement plan contributions.
Benefits of Severance
Severance packages offer benefits for both employees and employers. For employees, this package provides financial security during a difficult time. It can help cover living expenses while they search for a new job. For employers, it can help mitigate the negative impact of layoffs on employee morale and can also help avoid potential legal action by providing a fair and reasonable compensation package.
While outplacement and severance packages are both offered to employees who are laid off or terminated from their jobs, there are some basic differences between the two.
The key differences between outplacement and severance are:
- Outplacement is a service provided by employers to help laid-off employees find new jobs, while severance is a payment made to employees who are let go from their jobs.
- Outplacement services may include career coaching, resume writing, job search assistance, and networking support, while severance is financial payments made to the displaced employee.
- Outplacement is typically provided by an outside company and sponsored by the employer, while severance payments come directly from the employer.
If you are in need of outplacement services for laid-off employees, contact Find My Profession. Our outplacement services include pairing displaced employees with resume writers and/or reverse recruiters who will work to help them find new employment opportunities.