When you run a small business, money is always tight. You’re always looking for ways to keep costs down—and who can blame you? It’s tough out there for small companies.
But that’s exactly why you shouldn’t skimp when it comes to offering outplacement assistance. Yes, it costs a little more to give your employees job counseling as part of their severance package. But it makes a big difference to employees—and not just psychologically, either (although that’s a big deal, too).
Employees who get outplacement assistance after a layoff find new jobs faster, and that means fewer unemployment claims and fewer disgruntled former employees. Taking care of your employees after you let them go shows that you’re capable of treating them with dignity and respect, and that can really improve morale among those who stay behind—as well as boost your reputation for being a socially responsible company. When all’s said and done, the small initial investment in outplacement assistance can translate into a big return in terms of lawsuit prevention, reduced unemployment claims, and reputation management.
Laid-Off Employees Will Get Back to Work Faster
When you have to lay off an employee, you ideally want them to get back to work somewhere else as soon as possible. The more unemployment a laid-off employee claims, the higher your unemployment taxes—the average claim can raise an employer’s state unemployment tax premiums by $4,000 to $7,000 over a three-year period. When you offer outplacement assistance, you can minimize your unemployment taxes by helping your terminated employees find work elsewhere and get off benefits.
You’ll Prevent Lawsuits
The last thing you need as a small business owner is a wrongful termination lawsuit. If a former employee does try to sue you for letting them go, showing that you offered severance and outplacement assistance can help persuade the court that you treated the employee with dignity and respect during the termination process.
However, you’ll be less likely to get sued if you offer outplacement assistance. Outplacement assistance gives laid-off employees something to focus their energies on—it’s a clear step forward at a time when the path ahead may seem especially beset with shadows. Most employees will be glad to receive severance and outplacement career counseling, and the gesture can ease hurt feelings that might otherwise cause an employee to consult an employment lawyer. Even if a former employee doesn’t have a strong case, you don’t want to have to go to court to prove it.
Outplacement Bolsters Reputations
Letting someone go can be fraught with emotion on both sides, especially when you’re a small business owner who has the chance to get to know staff members on a personal level. Offering the best outplacement and severance you can will help you feel better about making difficult decisions, because you can still help your employee move forward even when he or she must do it without you.
Outplacement assistance makes employees feel a little better about being let go, too. Don’t get us wrong, being fired is a shock to the system and employees will likely have a strong emotional reaction to being terminated—and for good reason, when you consider how important a job and a career is not just to a person’s livelihood but also to their social life and identity. But finding that there’s at least going to be someone to help you navigate the transition to a new job can really ease some of the stress and anxiety of losing your stability.
Employees are typically relieved to be offered outplacement assistance, and eager to take advantage of the career counseling benefits. The structure and external motivation can be just what some people need to help them focus on moving forward, and if they’re focused on moving forward, they’re not worrying about leaving bad reviews on Glassdoor or telling all their friends what a terrible experience they had. Respecting your employees’ dignity during a layoff by offering outplacement assistance can turn what might otherwise become a nasty, disgruntled former employee into a happy, satisfied one, or, at the worst, a neutral one. And it keeps morale up around the shop—when remaining employees see you treat departing colleagues with respect, it makes them feel better about their own prospects with the company.
When you run a small business, it’s important to take care of your employees—even when you have to let them go. Offering outplacement assistance shows your employees that you respect them as people, even when you have to let them go—and that can lay the foundation for long-term business success.
