‘Outplacement’ is new corporate mantra in stressed times

March 22nd, 2009 - 1:21 pm ICT by IANS  

KPMG By Anuradha Shukla
New Delhi, March 22 (IANS) In these difficult times for the corporate sector when job cuts have become commonplace, employers are not leaving their fired staff in the cold. Rather, many are hiring what are called outplacement agencies to find suitable new openings for their erstwhile employees.

These outplacement agencies not only help companies in downsizing their manpower by identifying the non-performers but also help them send out a signal that they care by finding new jobs for laid-off employees, with proper training and even counselling.

“Outplacement is standard business practice globally. But it is a new trend in India. Lay-offs are becoming inevitable and many companies are retaining the services of outplacement agencies,” said Sunil Kalra of Manpower, a global job consultancy.

Insala, an outplacement software company, says that globally outplacement is a $10-billion business. After seeing the potential in India, two leaders in the business, BTI Consultant and the Ayers Group, launched a career transition and outplacement offering here last week.

Industry officials said Tata Consultancy Services, IBM, Motorola and Microsoft are some of the companies that have retained the services of outplacement agencies to train the retrenched staff and find them new openings.

“A lot of time companies don’t know how to cope with layoffs. That is why they have sough professional help from us,” said Anita Belani, country head for Right Management, a leading global player in outplacement services.

“We assist managements on identifying non-performers. Once the potential staff for lay-off is identified, we communicate to them effectively. We assist in areas like counselling, skill identification, training and negotiating with the new employers,” Belani told IANS.

And companies are paying handsomely for these training and services, explained Ganesh Shermon, the head for human capital solutions with KPMG India, which started its outplacement division some six months ago.

“Generally it is a bulk assignment. But, on an average, we charge Rs.400,000 for outplacing top management people and around Rs.200,000 for middle level executives and half of that for junior level people,” Shermon said.

However, companies were willing to spend on outplacement only for good employees and their senior staff and not for freshers and non-performers, he said, even as colleagues in the profession said it was not an easy task.

“There are lots of psychological issues involved. Managements are not comfortable handing pink slips either. For us, helping people to get new jobs in a recession-hit market is equally challenging,” Belani said.

“There is a strong sense of future insecurity and we have to work around that.”

According to human resource managers, it has not been easy firing staff, especially in service-oriented firms, where the past growth has been led by the “human factor”. But outplacement saves them from the pricking of conscience.

“I have not seen anything like this in my 25-year career. It is not an easy decision to fire dedicated employees who have made substantial contributions to our success,” said a senior executive in the human resource department of a leading software firm.

“By resorting to outplacement agencies, we do send out a strong message to our staff that the management is not insensitive and will not leave them in the lurch. They are made to understand that managements have their own financial compulsions,” he added.

Added Shermon: “No one wants a senior manager who has sensitive information to walk out with bitterness, lest he or she share the market intelligence with competitors. Outplacement leaves room open to hire them back when the situation improves.”

But what kind of companies are knocking on the doors of outplacement firms?

“We have about 40 multinationals and 10 Indian companies as clients, mostly from technology and financial sectors. Some assignments involve outplacing 1,500 white- collared employees,” Belani told IANS.

Added Shermon: “At present, we have the assignments for outplacing about 200 top management staff of automobile, real estate, electronics, engineering, IT, financial and insurance companies.”

(Anuradha Shukla can be contacted at anuradha.s@ians.in)

Related Stories

Tags: , , , , , , , , , , , , , , , , , , ,

Posted in Business |

Subscribe