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How, you ask, can you save money by spending
money on Outplacement Service? The key is looking at the big picture and
considering all of the costs involved in an employee separation. There are
“up front” costs and “back end” costs.
If you do not
provide any Outplacement Service, there is no “up front” cost. That seems
more cost effective at face value. But now let us look at the “back end”
cost. Separated employees can receive payments of up to $500 a week from the
State Employment Security Department for 6 months. That is $2,000 per month
and in today's sluggish job market many separated employees, without
Outplacement Service, have been unemployed for 6 months to a year.
That unemployment
benefit expense gets charged back to your organization in the form of an
increased State Employment Security Department Quarterly Tax Rate so that
your company pays the unemployment benefit expense of your separated
employees. If one of your employees goes unemployed for 6 months, your
company's “back end” cost for that one employee can be as much as $12,000.
Multiply that by the number of employees separated to get the total “back
end” cost.
By paying $2-4,000
per employee for unlimited Outplacement Service, your separated employees
receive the technical assistance and emotional support that ensures more
continuous and effective job search efforts until they accept their new job.
Using Outplacement service provides for faster placement. Transitions Team
can cut the job search time of separated employees by months. Our average
placement time last year for staff support employees averaged less than 2
months while for managers and professionals it averaged less than 4 months.
So the unemployment
benefit cost of a separated manager or professional for 6 months without
Outplacement Service could be $12,000. For the same manager or professional
receiving Outplacement Service (fee of $4,000) and being placed in less than
4 months (unemployment benefit expense of $7,000) the total cost could be
$11,000. That is a savings to the organization of $1,000 per manager or
professional by providing Outplacement Service. The savings for a staff
support employee could be as much as $6,000 per employee.
Not only could you
save money by using Outplacement service, but you receive all of the other
benefits for utilizing the service: virtually eliminate the risk of being
sued and of retaliatory violence, provide a positive public relations image,
improve morale and productivity of retained employees, and feel better
yourself knowing that you are assisting separated employees to find new
employment.
Transitions Team
provides separated employees with the opportunity to discover what their best
fit is for a new position and then assists them in acquiring it. We continue
to serve our clients until they are placed in a new job. If you need to
separate an employee, please call me to get all of the benefits of utilizing
Outplacement service, including saving your company money.
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