The Case for Using a Small Outplacement Firm

Corporate outplacement has come a long way from its retail career counseling origins following World War II. But, in spite of significant contributions by various outplacement firms, and some new tools (notably on-line databases, Internet and job bank upon job bank), there's remarkably little that is new in career counseling the heart of outplacement.

What's changed is the marketing of the process: a continual recasting of the product into a variety of hybrids addressing cost concerns within a market whose growth has slowed, but remains substantial corporate America. In addition, three distinct segments have emerged to service these needs: a half-dozen or so large firms, several formalized consortiums of smaller firms and more than 300 small independent organizations. Large or small, a competitive presence means: a history of successful outplacement assignments professionally managed by qualified counselors, with psychological service and support systems for both individuals and groups. In addition, all provide a full-service office complex with state-of-the-art technology and professional resources ranging from financial planning to preretirement and spousal counseling . So, on the face of it, there's little difference in what these firms do large or small but a good deal to suggest there may be substantial differences in how it is done.

Larger firms generally maintain a national presence through owned or franchised offices in key cities. Some operate internationally, as well. Several of the large firms are, themselves, operating divisions or subsidiaries of even bigger outfits, to which they are financially accountable. They serve the outplacement needs of many client corporations and are capable of managing national outplacement contracts. With sales ranging from $25 million to $100 million, they tend to have structured organizations, with assigned functional responsibilities. Candidate career counseling is provided by a combination of employees and a large number of independent freelancers engaged periodically by these firms, depending upon size and location of the assignment. As large players, operating in a competitive marketplace, these firms must necessarily be oriented to volume. In the past several years some of the large firms have recast the product to address their volume and cost concerns. They have changed what was an individual outplacement program to a quasi individual program, i.e., presenting significant portions in group format. These firms maintain a full-time marketing effort, supported by sales and public relations activities.

Smaller firms serve area or regional outplacement markets. Invariably owner-managed, small firms serve a limited number of client accounts. Median annual sales are just over $500,000. Client relationships are generally maintained by the owner or principal. Functional responsibilities are usually shared. Candidate counseling is performed by the owner or an associate. A flexible structure and the personal involvement of the principal stakeholder suggest that service is the primary orientation of these firms.

The heart of outplacement continues to be in the individual counseling time and professional expertise which is key to identifying the correct target and expediting the appropriate transition. The small firm provides an ideal setting for the professional counselor to establish and maintain volume. The counselor caseloads are lower than those of larger firms. A more personal, in-depth knowledge of each candidate is possible. Tailor–made programs are feasible.

Within the small firm there is direct accountability. Assessment, evaluation, process and follow-through are usually performed by a single counselor – not diffused among a number of specialist employees. Direct accountability insures clarity among client, counselor and candidate.

The small firm is built around candidates rather than the organization. Candidates find a tightly-knit, stable environment highly supportive during the stress of career change. Support builds confidence, encourages movement and generates realistic expectations of success.

Their orientation, emphasis and size may even give the small firms a competitive advantage, particularly in sensitive assignments involving long-service employees, cases where significant change is contemplated, and other situations requiring confidentiality, close follow-up and personalized career counseling.

The decision to provide this type of counseling environment is often the impetus to remain small in spite of the fact it also means that the small firm must constantly prove its value to balance the national image of larger competitors. This characteristic alone not only serves to differentiate their services as described but may also explain why the smaller firms are alive and well in the competitive world of outplacement.

By Robert F. Pisarra, Kathleen Gaughran and George Chapman, R.F.P. Associates, a regional consulting firm in Cedar Grove, N.J. Reprinted with the permission of the lead author.

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