Using a due diligence approach to evaluate and select an outplacement company

Selecting an Outplacement Services Firm

How to Select an Outplacement Services Firm

A Detailed Look and Due Diligence Approach to Selecting an Outplacement Company

The world of outplacement has changed dramatically from when it was first introduced in the pre-Internet days of the late 60's. We now live in a world where virtual learning is king. Major universities are scrambling to expand their online offerings, Amazon sells more eBooks than printed versions and 24/7 access anywhere and on any device is expected.

In the early days of outplacement, it was easy to see why costs were so high. The "bricks and mortar" delivery model meant lots of overhead. It's no wonder outplacement tended to be restricted to executive and professional employees. Outplacement is very different today. Even traditional "bricks and mortar" firms now include a virtual component.

The outplacement industry is continually evolving. As new and somewhat disruptive outplacement models emerge, the industry adapts accordingly. For the most part, this is good news for employers. Costs have declined significantly, while services, content, coverage and access have improved. Employers now have many more choices.

Defining Today's Outplacement Model

In its early days, virtual outplacement was considered a disruptive influence in the outplacement industry. Virtual outplacement encapsulates components both online and traditional "bricks and mortar" support. Participants get 24/7 online access, but they also have access to personalized one-on-one or group support from job search and placement experts. Since virtual outplacement models don't normally include the "bricks and mortar" component, the smaller infrastructure translates into significantly reduced operating costs. Many outplacement companies have now adopted this model.

Adaptive outplacement takes virtual outplacement a giant step further. It adds immense customer control over content, branding, cost and payment mechanisms. The ability to choose between traditional per-user and subscription-based payment models adds a new dimension. Adaptive capabilities have enabled a transformational outplacement model that means all levels of employees can be covered, and the coverage costs less than what was originally expended just for a few executives.

Clearly, employers have far more choices today. Fortunately, selecting the best outplacement model for your organization is pretty straight forward. Once you understand the options available, comparison between outplacement companies is fairly easy. The following will help.

Getting Started in Choosing An Outplacement Services Firm

Start by defining your needs and budget. You have lots of options (traditional, transitional, virtual and adaptive) and variations to choose from, plus some financing variations. Suitability in a shared services organization (SSO) environment is another important consideration. Once you've defined your needs and budget, you'll be in a position to narrow down the field of outplacement companies that meet your criteria.

The reality is that most newly displaced employees will have never before heard the name of the outplacement company that gets chosen to serve their needs. All they really care about are the end-user touch-points that help them get reemployed. Put yourself in their shoes as you go through the selection process.

Choosing an outplacement services company is pretty straight forward. When done right, there's a lot of transparency in the review process. It's largely a WYSIWYG (what you see is what you get) review. But knowing what to look for requires a due diligence assessment.

Who Decides?

Some organizations leave the selection decision solely in the hands of the human resources executive. Others may form a committee or go through a more formalized procurement process that involves the CEO, HR, purchasing, finance, IT and other functions. A formalized RFI, RFP and/or bidding procedure may be part of the process.

The following graphic summarizes the basic steps in choosing an outplacement company. You can substitute steps in your organization's formalized process as needed. For a graphic representation of the outplacement firm selection process, click the following link: Infographic: Selecting An Outplacement Firm

How to Choose an Outplacement Firm

Outplacement Coverage

Employee coverage, and its attending cost, is an important consideration in choosing an outplacement company. As the following graph illustrates, there are varied needs among job hunters. Some have lots of experience and skills, while others are just starting out. Most people would probably agree that Job Hunter I has the greatest need for job search support, yet historically, Job Hunter III was the only one receiving support. In this case, Job Hunter I is likely a non-exempt employee and Job Hunter III is likely an executive or professional employee.

Job Search Factors for Outplacement

Adaptive outplacement eliminates the cost-based bias that favors covering only higher-level employees. It makes outplacement applicable and affordable for all levels of employees. There are lots of employer benefits associated with full coverage. Discussions about outplacement's financial and social ROI highlight these benefits.

Things to Consider in Choosing an Outplacement Firm

Selecting an outplacement company means looking at a lot of variables. There are considerations such as quality, cost, implementation, flexibility, support, customization, return-on-investment (ROI), etc. The nature of your organization, its industry, culture, goals, number and types of employees, community and brand perceptions, etc. are all factors.

Making a choice between outplacement service companies is fairly straight-forward. We encourage all organizations to look at a range of outplacement firms, including large traditional firms, smaller boutique companies, and of course, Job Hunter Pro™.

Most organizations research a range of vendors as a matter of course, but some fail to exercise adequate due diligence because of pre-conceived notions about service and cost. If stewardship of resources is part of your organization's culture, don't skip this step. You will be surprised at what you learn.

Conducting a Due Diligence Outplacement Services Review

Here is a comprehensive list of suggestions and criteria to consider regarding how to select an outplacement firm and the best product for your needs:

  1. Start by abandoning pre-conceived notions about outplacement services. You'll learn (and save) a lot. Adaptive outplacement and subscription plans are new choices.
  2. Define your outplacement needs, but be flexible. As you go through the vendor selection process, you will learn a lot. You will likely find you have more options than originally thought.
  3. Embrace eLearning. People love online content. They want to learn their own way and at their own pace. The latest research unequivocally validates the efficacy of online learning.
  4. There have been vast changes in the outplacement industry. Technology and information access have forever changed the face of outplacement. Be sure you explore all options.
  5. Place your primary focus on the outplacement product, not the firm. It's what the firm offers in the way of a product that makes a difference to your separated employees.
  6. Ask questions about job search counseling and support staff. You want highly experienced HR and job search experts ... not people in an outplacement mill with volume quotas.
  7. Establish basic criteria for choosing a product. Factors include overall quality, depth of content, device-independent access, ease-of-use, cost, customizable features, branding, etc.
  8. Beware of a vendor's ROI claims. Yes, outplacement can produce a significant ROI, but it is almost impossible to estimate with accuracy. It relies heavily on assumptions.
  9. Conduct research. The Wall Street Journal and others have revealed some surprising information about the way some outplacement firms operate. Search the Internet for a link.
  10. Decide who should be involved in the vendor selection process. Gain general agreement regarding core criteria that should be evaluated.
  11. Be sure the product selection team understands the needs of employees who are involuntarily separated and can match products with end-user needs. Train as necessary.
  12. Beware of vendors with cookie-cutter approaches to finding a job, writing resumes, or using automation as a substitute for intellectual activities. They can harm job hunters.
  13. Ask a legitimate question ... "Why do some outplacement firms charge so much for their services?" The answer to that question will help you select the best outplacement company.
  14. Numbers of current or former clients can be misleading. It may be a function of marketing clout or deep pockets ... not quality. Quality is best determined via a demo of a live site.
  15. Don't assume other organizations did proper due diligence before selecting a vendor. They may be following the herd or simply have different needs. Conduct your own research.
  16. The easiest way to evaluate an outplacement product is to view a demo of a live site (what you see is what you will get "WYSIWYG"). You'll be amazed at the differences in quality.
  17. The best way to compare quality is to view product demos on a back-to-back basis. Set aside a day or two and use consistent criteria. The demos can be in-person or online.
  18. Vendors should offer a full range of services, including online content and one-on-one job search support. Be sure you evaluate the full spectrum of services offered.
  19. Look closely at content, the accommodation of learning styles, tools, support and cost. One size does not fit all. Does the product support all types of users and employee diversity?
  20. Be sure the product works on all browsers and scales for all screen sizes (desktop, laptop, tablet, smart phone). Modern outplacement does not require a separate mobile app.
  21. Look for breadth of coverage. Socially responsible organizations typically cover all employees in need; not just executive- or professional-level employees. Full coverage is affordable.
  22. There's a lot of "hype" in the outplacement world. Common sense will usually filter out hype from reality. Listen to your instincts; not the sales pitch. Dig into the details of demos.
  23. Look for solutions that teach job search skills. It is far better to teach someone how to do something than to do it for them. Good outplacement will provide skills that last a lifetime.
  24. Explore how content is delivered for different levels of outplaced staff. Is role-based content available and can it be seamlessly delivered to targeted groups of employees?
  25. Look for flexibility in the areas of special needs, custom content, branding, diversity, industry relevance and the like. Requested modifications should be easy and inexpensive.
  26. Understand the implementation process. How long does an implementation take, how is it managed, who are the primary points-of-contact, what are response times, etc?
  27. Ask about the enrollment process and your involvement. Understand how small versus large numbers of newly outplaced employees are handled. What is the process?
  28. Does the outplacement firm have over-reliance on a single tool or process that does not readily apply to all types of employees? There must be a balance.
  29. Personalization matters. Outplacement users want and expect personalization of the content they view and the support they receive. Ask for examples during the demo process.
  30. Interactivity is important to user engagement and learning. Static content doesn't cut it. Evaluate the types and scope of interactive content. Quality will be easy to recognize.
  31. Is scalability for large numbers of employee one of your needs? For example, a major retailer could have 50,000+ seasonal workers released at the end of the holiday season.
  32. Do you have special needs for self-administration of certain elements of the outplacement portal? Does the vendor allow administrative rights for employer access?
  33. Check on standard versus extra-cost term-of-service durations. Some job searches take longer than expected. You want impacted employees covered for contingencies.
  34. Does the vendor have significant reliance on third-party integration? Heavy third-party reliance carries some risk and can result in unplanned changes.
  35. Costs vary substantially from vendor-to-vendor, but cost is not an indicator of quality. Don't pay for what you don't need or what your separated employees won't use.
  36. Do you want outplacement that’s ready any time you need it, regardless of reason for separation? If so, subscription-based outplacement may be an attractive option.
  37. In the vendor selection process, be consistent, but be open to changes that result from the additional learning you experience as you go through the demo process.
  38. Outplacement's primary focus should be on the end-user. Does the vendor survey and track the users’ experience, and share this information with the employer?
  39. Be sure the outplacement vendor can meet requirements related to scheduled dates for kickoff and can help with employee communication and other start-up needs.
  40. Clarify implementation and kickoff procedures, account manager support, etc. Understand how employees login and how they request job search consulting services.


Note: If your organization requires or prefers to use an RFI and/or RFP as part of the vendor selection process, the above criteria may be helpful in developing those documents. See below for a downloadable infographic of the above criteria.


* Over-Reliance Can Be Problematic:  Here's an example of the need for balance. Some social networking sites are excellent job search tools and most outplacement organizations strongly support their use. But as good as some of these sites are for job networking, the experience may not be the same for all types of employees or industry segments.

For illustration, a networking site may have a high concentration of users who are in manager, director, owner and executive positions. They may also have industry concentrations in areas such as high tech and finance. Job hunters falling into the above categories are likely to find greater networking opportunities via that site than job hunters falling into categories that are not as well represented.

Another factor to consider is the amount of time it can take to gain significant traction on a social networking site. If not already a member of the social network, a person would have to start from scratch. The learning curve and networking-building activities take time. This must be weighed against the urgency for a person to find a job.

In this particular example, it would be a good idea to survey your employees regarding their use of social networking sites and to also understand whether such sites adequately represent your industry segment.

As you can see in the above example, if an outplacement firm relied too heavily on integration with a social networking site, it may not be a good fit for some users. The value of having a balanced inventory of job search tools and methodologies becomes evident.

Also, be cautious if an outplacement services company spends most of their time demonstrating one or two features. It may suggest they have limited or shallow content. Searching for and landing a job entails a broad range of skills, and each job hunter has different needs. Be sure you look at each vendor's complete portfolio of content, tools and learning resources.

A Final Comment: There are two Wall Street Journal articles ("Outplacement Firms Struggle to Do Job" from 2009 and "Assistance for Laid-Off Workers Gets Downsized" from 2014) that we consider "must reads" for anyone evaluating outplacement services. A quick Internet search will find them.


A downloadable infographic showing the steps to evaluate an outplacement services company and additional selection considerations can be found via the following links:


Infographic: Selecting An Outplacement Firm    Additional Considerations in the Selection Process


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