Outplacement in Russian companies

Outplacement is no longer just a fine foreign concept as it is a widely known – although still rarely applied in Russia – way of downsizing staff in the most civil manner. That is why outplacement is also often referred to as “soft dismissal”.

Dmitri Larin
Head of Recruitment Services
The outplacement market is much less homogeneous and well-established than the recruitment market: each player can commit to this process differently, establishing different relationships and covering different costs. Some Russian companies even handle outplacement themselves in a bid to save money, but the main idea behind this practice always remains the same: give not a fish but a fishing-rod. Who can indeed ensure and guarantee that our ambitions coincide with the facts of day-to-day life, as well as success at interviews with cases, tests and other assessments? That is why outplacement is first and foremost based on a bit of consulting, on the one hand, and on the willingness to acquire new skills on the other.

Outplacement may consist of a series of activities. Starting from standard activities:
  • Customizing one or several resumes to various vacancies;
  • Providing materials, letter templates, recommendations, search strategies, etc.;
  • Discussing the labor market and insider information from the relevant industry and even companies;
  • Etc.
Up to specific activities:
  • Reviewing in detail standard and unusual questions, specific interview cases and situations, the company take on those questions;
  • Assisting in finding vacancies and relevant contact persons in target companies;
  • Efficient networking training;
  • Sending resume to decision-makers and HR departments;
  • Master classes in collection of inside knowledge and future employer recommendations.
The rarest and most complex type of outplacement is closed outplacement which in actual fact entails poaching employees who, as a rule, are top executives themselves unaware of the intentional parting, often believing that they have been headhunted to work on another project.

Outplacement could be thought of as the opposite of recruitment, and although it is often conducted by recruiters, it is worth noting that such consulting should be offered only by the most experienced professionals who know the labor market very well, the best candidates and employers with the highest standards.

Outplacement pros and cons

The financial benefit of outplacement is debatable depending on whether we think short term or long term. In the short term, it is a substantial expense the result of which is hard to predict and measure. It is not easy to monetize good relationships, social responsibility, increase in loyalty and personnel security, as well as the potential risks of negative feedback on the Internet. And it is even harder to express in figures how outplacement is perceived as part of employee benefits or the level of the company and care for its better employees. Incidentally, 32% of our candidates consider employee benefits to be an important factor when they apply for a job, while company brand is important for 41%.

If we consider medium- to long-term prospects, the benefits, of course, seem more obvious, and outplacement may then become a direct investment in the company’s good name and even helps cutting recruiting and staff retaining costs.

Main advantages of outplacement for employers:

  • Improve company reputation and brand on the labor market
  • Increase employee loyalty and security as well as confidence in the future
  • Save time as an external company advises and supports dismissed employees
  • Improve HR security by reducing the risks of court disputes, dissemination of commercially sensitive information and negative feedback from dismissed employees

Main advantages of outplacement for employees:

  • Allow coping with stress and negative reactions thanks to the provision of counseling and psychological support
  • Provide up-to-date information about the labor market
  • Independent evaluation of professional experience and presentation skills
  • Effective job search and experience positioning strategies developed with experts
  • Increase the chances for quick employment thanks to the information received and targeted mailing of resumes
As you can see, there are many advantages, but the disadvantages of outplacement are not negligible.

Drawbacks of outplacement:

  • Substantial expenditure for employers
  • No guarantee of employment for employees

The price to pay

Speaking of the drawbacks of outplacement, it impossible not to mention the amounts involved which vary drastically and range from a few thousands of rubles to tens of thousands of euros. A lot depends on employment contract terms, the services offered, the number of personal meetings, the level of the partner involved in outplacement, and often the salary of the person dismissed. On average the amount paid is a monthly salary. The most complex “closed outplacement” can reach up to 25% of employee’s current annual salary, while some others only worth several thousands of rubles can also be offered even in decent companies. It goes without saying that the services offered in this case are very simple and general and most probably consist in a webinar or other very general information that is available online.

Quick results are not guaranteed and certainly cannot be expected as another person cannot be held completely responsible for one’s resume, successes, failures and ability to present oneself. It is another matter altogether to consider expert advice and understand that searching for a job is a job in and of itself and that investing time and effort in job search as well as improving interview skills will significantly increase the chances of success.

Although every company, every HR director and especially CFO look at these pros and cons differently, the fact remains that the incidence of this Western trend is growing slowly in Russia, but it is growing while remaining at a level substantially below that in Europe.

As a dismissed employee told us: “Compensation is important, but money runs out, while the feeling that I was disposed of could have lingered for a long time if no assistance had been offered to move on to a new role.” Most companies with an outplacement program in place do not completely cut monetary compensation, but by not limiting themselves to standard severance payments and trying to turn dismissal into a job change, they also think about the employees they dismiss.