Outplacement biz up amid tech, startup layoffs

outplacement biz up amid tech, startup layoffs

Outplacement biz up amid tech, startup layoffs

Amid a spate of layoffs led by companies in the technology and startups space, business is booming for outplacement firms that are engaged by companies to help laid-off employees find new work.

Technology, IT, ITeS, ecommerce, startups, pharma and healthcare, BFSI and retail companies are among those looking to help affected employees, outplacement providers such as ABC Consultants, Persolkelly Consulting, Randstad RiseSmart, LHH and Right Management told ET.

Right Management India, a subsidiary of the Manpower Group, has seen a two-fold increase in career transition queries in the beginning of this quarter.

“There are several factors which are driving the uptick – over-hiring post pandemic, geopolitical conflicts, the advent of enhanced technology such as AI, and the wave of mergers and acquisitions,” company president Hardeep Singh said.

Archana Uniyal, regional head – South East Asia at Persolkelly Consulting, said, “We witnessed a 100% surge in incoming queries in 2023 compared to the previous year. Q1 2024 is showing an even sharper climb.”

Soaring demand:

Outplacement is cyclical and inversely proportional to hiring. Such services are in high demand during periods of upheavals or layoffs.

“In the last 6-8 months, hiring was impacted due to market recessional fears and businesses tend to consolidate and restructure in this scenario,” said Sue Ann Vaz, executive director – HR consulting services at ABC Consultants. “So, outplacement queries have been on the rise.”

ABC Consultants has seen a 30% increase in leadership outplacement queries in the last 6-8 months.

Aiding the transition:

Helping professionals land new opportunities is just one part of outplacement services. These companies also help candidates with interview preparation, crafting resumes, brand-building, emotional support, and resilience training, targeting prospective employers, and offer negotiation.

Their fees can range between Rs 30,000 to Rs 3 lakh per candidate, depending on the level of seniority, tenure of services and scope.

Layoffs, when mishandled, can lead to legal issues and damages to the corporate reputation, which can impact the company’s ability to operate and hire talent in the future, said Jaya Dass, managing director of outplacement and coaching at Randstad Enterprise in Asia Pacific.

“Outplacement services help mitigate these risks,” she said.

The technology industry and startups are currently the main driver of demand for its outplacement services, along with BFSI and IT-ITeS multinationals, said Dass.

“Certain healthcare companies are also pivoting their focus and investments away from Covid-19 to focus on other therapy and disease areas,” Dass said. “Manufacturers that are impacted by the sluggish growth and supply chain disruptions as well as retail and hospitality companies undergoing digital transformation and cooling consumer consumption are also expected to pivot their organisational structure and processes this year,” she added.

While outplacement support in India is still primarily driven by multinationals, local Indian companies are also recognising its value.

“Layoffs are an emotional experience for both employers and employees. Being handheld by an expert firm helps employees retain their confidence during this sensitive time,” Vaz of ABC Consultants said.

For LHH, the outplacement and HR consulting division of Adecco Group, queries are up by 30% – the highest since the peak of the global pandemic in 2020-21, a company spokesperson said.

“Outplacement helps protect companies’ employer brand by showing support for departing employees, ensuring goodwill, and maintaining morale among those who remain. This can enhance the company’s reputation as a caring employer, which is vital for attracting and retaining top talent,” added the LHH spokesperson.

For more news like this visit The Economic Times.

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