Presenting the ROI of Outplacement to Leadership
I’m excited to share my perspective on the incredible impact that outplacement services can bring to any organization. Having experienced multiple workforce transitions myself, I know the stress and pressure that both HR teams and employees face during these times.
My goal with this guide is simple: to equip you with the data and talking points you need to demonstrate outplacement’s return on investment (ROI) to senior executives or board members.
The Business Case for Outplacement
Mitigating Legal and Financial Risk
One of the clearest benefits I’ve observed with outplacement is a reduction in legal exposure. When employees feel supported and informed, they’re significantly less likely to pursue legal action.
Outplacement demonstrates a genuine commitment to helping them land on their feet, easing tensions and lessening the chance of lawsuits.
Why This Matters: Even a single legal dispute can be massively expensive, from attorney fees to potential settlements. Providing outplacement signals fairness and goodwill.
Preserving Your Brand Identity
A positive offboarding process has a major impact on a company’s reputation. In the age of social media and online review platforms, word travels quickly.
If your departing employees feel they were treated with respect, they’re more apt to speak positively (or at least neutrally) about your organization.
Impact on Recruiting: Prospective hires often check review sites like Glassdoor to see how companies handle layoffs. Positive reviews can attract stellar candidates.
Public Perception: Customers, partners, and investors also notice how you treat your people. A supportive offboarding approach fosters trust in your brand.
Retaining the Best Talent
Layoffs create uncertainty for remaining employees. I’ve seen how a compassionate, well-executed outplacement process can ease this “fear factor.” When people see their departing coworkers receiving support, they’re less likely to jump ship.
Morale Matters: A sense of fairness and transparency keeps engagement levels high, directly affecting productivity and performance.
Lower Turnover Expenses: If your top employees stay because they feel more secure, you save on recruiting, training, and ramp-up time.
Faster Reemployment = Lower Costs
One of the most tangible ROI drivers is helping departing employees find new roles faster. The shorter their unemployment period, the less you’ll pay in severance and unemployment insurance.
Severance Savings: If you pay severance until an employee lands a new job, outplacement can cut those costs by speeding up reemployment.
Unemployment Rate Reduction: Long-term unemployment for a large group can increase your unemployment insurance rates. Outplacement curbs this cost.
ROI References & Data
Data is your ally when making a case to leadership. Executives often want proof from reputable institutions or past case studies.
Hard Numbers From Reputable Sources
Time-to-Reemployment Cuts: According to the Society for Human Resource Management (SHRM), structured outplacement can reduce average job search time by nearly 50%.
Drop in Legal Claims: HR legal reports indicate that employees who receive outplacement are up to 60% less likely to file lawsuits.
Overall Cost Efficiency: Factoring in severance, unemployment benefits, and litigation risk, outplacement programs can lower total expenses by about 30% in many organizations.
Applying the Numbers to Your Situation
Use your internal data to illustrate outplacement’s impact. For example:
Number of Employees Affected: 50
Average Severance (Per Employee): $5,000
Potential Litigation Costs: $100,000–$200,000 per dispute
Current Unemployment Insurance: $2,000 per employee over X weeks
If outplacement shaves even two weeks off job search time, you see substantial savings in severance and unemployment. Avoiding just one lawsuit could more than cover outplacement costs - making it an easy sell to leadership.
Key Talking Points for Your Leadership Team
When presenting outplacement’s ROI to the C-suite, be concise, factual, and aligned with organizational goals. Here are four go-to talking points we suggest you start with:
“Outplacement Minimizes Risk” Emphasize lower legal exposure and reduced chance of negative headlines. A small upfront investment can prevent massive costs later.
“We Need To Protect Our Brand”
Show how the offboarding experience affects employer branding. Outplacement keeps the message positive.
“Faster Reemployment = Lower Costs”
Highlight reduced severance and unemployment expenses, a clear bottom-line benefit for cost-conscious executives.
“Boosting Morale & Retention”
Stress how respectful offboarding reassures current employees, stabilizing morale and reducing unwanted turnover.
Action Steps to Secure Leadership Buy-In
Assess the Layoff Scope
Determine the number and level of affected employees.
Identify stakeholders (finance, legal, communications) for alignment on costs, risks, and messaging.
Calculate Your Budget and Potential ROI
Gather data on severance, unemployment insurance, and legal fees.
Compare scenarios with and without outplacement to highlight the financial gap.
Consult ShiftAgain or Another Outplacement Agency
Explore ShiftAgain’s (or other outplacement firms) customizable packages tailored to each role type and organizational size.
Emphasize how technology and personalized guidance expedite reemployment, cutting severance and unemployment costs.
Present Your Findings to Leadership
Use clear data visualizations illustrating how outplacement pays for itself.
Reference case studies or competitor strategies to show outplacement’s proven track record.
Outline a clear timeline for implementing outplacement and review milestones for measuring ROI.
Frequently Asked Questions (Optional)
“Isn’t this just an extra cost during a budget crunch?”
Absolutely not - think of outplacement as a strategic investment rather than an additional expense. While there is an upfront cost, a well-designed outplacement program can often save you money in the long run.
For instance, helping former employees land on their feet more quickly can reduce potential legal claims, lower severance expenses, and curb unemployment costs. Moreover, providing tangible support can foster goodwill among both current and departing staff, helping to preserve your employer brand.
Ultimately, these reputational and financial benefits can far outweigh any immediate cost concerns.
“Does outplacement incentivize layoffs?”
No. Layoffs occur due to broader business or economic factors - outplacement doesn’t drive the decision to reduce headcount. Instead, it ensures that when layoffs do happen, organizations can handle them responsibly and compassionately.
By providing career transition support, companies showcase empathy and commitment to their employees, even during difficult times. This approach not only protects the well-being of the departing workforce but also reinforces a culture of support and respect.
The positive ripple effects can bolster morale among remaining employees, enhancing loyalty and engagement.
“What if most roles are hourly or entry-level?”
Entry-level or hourly workers often benefit the most from effective outplacement services. Since these employees might have fewer resources or less experience in navigating the job market, offering robust career transition support can substantially shorten the time they spend unemployed.
This means fewer unemployment claims and lower severance payouts, ultimately saving the organization money.
Beyond financial gains, investing in all tiers of employees reinforces a company-wide message of respect and fairness - demonstrating that every individual’s future matters, irrespective of their role or seniority.
Recap/Final Thoughts
There’s no doubt about it - outplacement is a strategic asset for handling workforce changes. By blending empathy with hard data, you’ll show your executive team that these services aren’t just “nice to have” - they’re vital.
When you partner with ShiftAgain, your departing employees gain top-notch, tech-enabled support to land on their feet faster.
This proactive approach helps maintain a strong employer brand, protect your bottom line, and keep your remaining employees confident in the organization. People remember how you handle tough situations, and by offering outplacement, you’re proving that your company truly values its people - no matter the circumstances.
Ready to Move Forward?
Gather your data, identify ROI metrics, and see how a partnership with ShiftAgain can fit into your broader HR strategy. You’ll see smoother transitions, better morale, and a reputation that reflects well on everyone involved.
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Tags: ROI of Outplacement, is outplacement worth it
Author: Reid Alexander
Disclaimer: This content is for informational purposes only & not intended as professional legal or HR advice. Consult with qualified professionals for advice tailored to your specific situation. The author & publisher disclaim any liability for errors, omissions, or actions taken based on this content.