“Should access to outplacement services be conditional upon having impacted employees sign release agreements”?
This is a question we are often asked. Having employees sign a release agreement is a long standing practice dating back to the late 1970s/early 1980s when outplacement was typically reserved for senior executives and “reduction in force” events were rare. The practice evolved as a means to minimize, if not avoid litigation, by “buying peace”. Release agreements might also include promises of future cooperation as well as non-compete & non-solicitation clauses.
Since outplacement services typically were, and still are a component of an employee’s severance package, signing a release agreement (or not) can delay program engagement, sometimes for several weeks.
Fast forward to modern day corporate America and we are seeing a variety of policies in existence, reflecting a changing landscape where today:
- All employee levels might be offered outplacement services that were once only available to senior executives.
- Restructuring and mass reductions in force are now commonplace. Establishing grounds for litigation is more difficult when economic conditions affecting many (rather than individual performance) is the primary reason for layoffs.
What We Are Seeing
Today, policies vary widely and range from:
- Services can begin before signing a release agreement
- Employees can meet with an outplacement provider to discuss services for which they are eligible, but they cannot officially engage
- Services can begin only after signing a release agreement
What Is a Best Practice?
In our experience, organizations that require signed releases have implemented a policy and process that creates setbacks and hinders individuals from moving forward. This is often compounded when there are delays in notifying outplacement providers that individuals have signed their release agreements. This increases stress when time is of the essence in connecting employees to the support system available to them through their outplacement provider.
Having worked with individuals going through transition for over 30 years, we advise employers to allow services to begin with “no strings attached”, or at a minimum, to permit employees to speak with their outplacement provider. Understandably, senior executive severance agreements might be an exception to this rule. There are important benefits to the employer and employee, as well as an outplacement provider, in allowing employees to engage in outplacement services as soon as possible after notification.
- Employers who allow employees to engage in outplacement services without signing release agreement minimize or avoid heightened negativity and bad feeling by creating a climate of genuine concern and trust for those impacted.
- Employers provide immediate access to a support system, allowing employees to redirect, refocus and move forward in a timely fashion.
- Whether striving to be an employer of choice or not, the organization’s reputation and employer brand is enhanced (rather than put at risk) by how well it manages the separation process, impacting the ability to attract and retain employees.
- Employees are usually more proactive and able to see their situation in a better perspective after meeting with an outplacement consultant. Feelings of anger, resentment and disappointment are often dissipated. Plus, we see real benefit from the objective third party perspective that a consultant can offer. By focusing on the future and next steps, momentum is directed towards what can be controlled and inertia is minimized or better still avoided.
- Employees receive professional advice and assistance before mis-steps occur in what they say and what they do. When individuals launch a job search marketing campaign flying solo, damage (sometimes irreversible) can occur in the early days, especially in an era when social media plays such a critical role in the campaign. In a tough job market, getting good advice from day one can ensure that opportunities are leveraged and mis-steps are avoided. Good advice out of the gate may also make a difference in how long the job search will take. When an outplacement consultant begins working with a job seeker who has been flying solo, momentum is lost by having to retrace steps, retrieve/re-work marketing materials and revise communications that might be inappropriately in place.
- Few individuals who are offered outplacement services understand how an experienced outplacement consultant can support them in their job search (in both tangible as well as intangible ways). If an agreement has to be signed before services can begin, we would advocate for allowing employees to have an initial meeting with their outplacement consultants so that they can better understand and appreciate the expert advice, guidance, market knowledge, connections and support system that a consultant has to offer. This has the potential to strengthen confidence and reduce stress, especially among those who haven’t conducted a job search in a while. It also affords hope to those individuals who feel their situation may be hopeless.
In our experience, the approach taken by employers in how they handle severance agreement releases can make a difference in the employer’s relationship with departing employees in particular and the reputation and brand of the organization in general. The benefits of signed release agreements should be weighed against the drawbacks (and unintended consequences) as outlined above. Rather than leave your impacted employees in limbo, we would propose a policy that allows employees to begin, or at a minimum to meet with their outplacement provider as soon as there are notified.
To discuss best practices in engaging employees in outplacement services, please contact Marie Tanzi, VP Career Transition Services on 973-539-3006 or email her at [email protected]