How much does outplacement cost?

A typical outplacement programme will cost between £200 to £5000 plus VAT with the main cost element being the career coaching component. With such variance, we’ll take a look at what the difference in price will buy you, what the different price elements are, the variants between suppliers and how to negotiate the best price.  We’ll also look at the cost of not doing outplacement!

Outplacement, in case you’re unsure, is the provision, paid for by an organisation, to support a member of staff who is leaving, with the exit transition and the process of searching for a new role.  Outplacement plays a pivotal role in the corporate landscape, especially during periods of organisational change that necessitates layoffs or redundancies. This service extends beyond mere job search assistance. By providing personalized support through career coaching, quality outplacement services mitigate the adverse effects of job loss.

The essence of outplacement lies in its dual benefit of supporting former employees in finding new employment while preserving the company’s reputation as a caring and responsible employer.

So, before we go through how the costs work, here’s a question for you. Are you buying outplacement for yourself or for staff within your organisation?

This matters, as if you’re buying for yourself, you should absolutely buy what you need which should be easy to work out with the right advice. If you’re buying for staff within your organisation, you’ll often be working to a budget and, particularly with groups of staff, will need to be making educated guesses around any individual needs and more likely making assumptions around the group or groups of staff and what they need. Getting outplacement advice on this by a good outplacement company together with how to make the most out of your budget will be key. The more staff involved, the more complex this becomes, but often the more savings per head you can make. We’ll look at all of this within the article.

Outplacement cost elements

An outplacement programme usually consists of:

• Career coaching from a career coach or job coach or coach
• Access to resources, usually online, such as career assessments and job search tools
• Access to specialist databases of recruiters, head-hunters and companies

The low-cost outplacement programmes are usually only the online resources and may start from around £200.

The main cost of outplacement is in the coaching, so with specialist coaching costing around £300 an hour, the price moves up with the more hours you buy.

How much coaching time will I need or how much time should I allocate for my staff?

If you’re looking for yourself the answer to this can be a bit more specific than how longs a piece of string. If you are unclear about what you want to do next, are considering changing role or sector, want to make a step up or simply want to really make the most of the transition, then coaching time spent in addressing these will be money well invested. As a guide this will add 6 to 10 hours on a programme.  If you’re absolutely clear about your next role, it’s a straightforward transition, and you simply want help around job search, then a programme of 6 to 10 hours would usually suffice. So overall you’re looking at total coaching time of between 6 to 20 hours. Hopefully an outplacement provider will offer a free session to discuss your needs and what may be most helpful. See our guide for outplacement for yourself.

If you’re buying outplacement for your staff, then this is where it gets a bit more complex. If you have a set budget, then simply talk to your outplacement provider who should be able to advise you on how to get the best for the individuals concerned within your budget. We advise our corporate clients on this all the time. See our outplacement guide.  Where you don’t have a budget, this is when you need to consider things in a bit more detail. Our website has a employee outplacement guide on what programmes typically provide for which staff.

If it’s for a single member of staff, things to be thinking about are:

• Is there a monetary allocation in their contract for outplacement?
• Is it a complex exit under a settlement agreement? In which case you may want to spend more to reduce the chance of conflict or soften the blow
• Are they senior executive – senior executives and directors usually require, and are given, longer executive outplacement programmes 
• Have they been with the organisation for a long time? Longer programmes are usually given here as these are more complex transitions for the staff member

If it’s for a larger number of staff, think about:

• If they’re under consultation, do you want to start the process sooner to help them through the consultation itself? This can help those leaving as well as those who end up staying. Support is usually in the form of managing transition and applying for internal roles.
• Are there different groups within the effected group which you can then allocate different hours to address different needs? This is typically the chosen route, rather than allocating the same hours for all staff
• Will everyone use the hours?  Take up is usually around 80% and more for good provision. Sometimes a staff member will say they don’t need outplacement but soon after leaving either find the transition harder than they thought or they have a job opportunity that they thought they’d secured fall through. Staff may also want a break after leaving. So, time limiting programmes of say 3 or 6 months are not helpful. For larger groups of staff, you may also find the outplacement provider will allow for some staff not using the full service and reflect this in their costs, whilst still giving you the chance to provide it for all.
• If you need to keep costs low, try to give them at least a few hours of one to one coaching time. Whilst it may not be a huge amount of coaching time, it’s surprising what can be done in a few sessions and it gives them more personal attention than an online only offering.

There are other ways of bringing costs down for groups and these are mainly:

• Workshops or webinars where a group of staff will be given the same information at the same time – so reducing the cost of that. These are suitable for more junior staff members or staff doing the same roles but are rarely if ever used for senior staff where more personal one to one coaching is usually provided.
• Reduced hourly rates for a larger total amount of coaching hours is usual

Fixed coaching hours vs timed programmes vs unlimited hours

Nowadays, having a fixed amount of coaching hours is the preferred option so everyone knows what has been bought and what’s available. It provides better value as it can be costed precisely. Older outplacement companies still offer timed programmes of usually 3 to 6 months of support. On the surface a timed programme can seem appealing but it’s worth thinking about how the provider has costed these. They must know how many hours are used within those times historically and then price above this level to avoid the risk to them of overuse. In other words, you’re buying more that you’re using. If it’s not a good service, it also won’t be used much. Most providers have moved to offer a fixed number of hours so you can see what you’re paying for, but some will again only give you a short period to use them in, which can be limiting for the individual. Ideally, look for programmes where the hours can be used over a year from when bought (just consider someone going on a maternity break at the start of the process and coming back to find they can’t use their support!). Other providers offer unlimited hour programmes for a premium price. Here you again need to be careful as they will have costed it in favour of themselves, so you’ll be paying for more than you use, but worse the coach may be given a fixed rate regardless of how many hours they deliver. This means they are likely to want to get the individual off their books as quickly as possible – great if they want any old job but not so good if they’d prefer to find the right job. We‘d always advise opting for fixed hours, so you know what you’re paying for, and time to use those hours over a year or more.

Outplacement cost – Negotiating the best price

Years ago, when the exchange rates were better, I used to shop in America for clothes as they were so much cheaper. I’d come home with suitcases full of bargains that I never wore. I mentioned this to a professional image consultant friend of mine who then advised me to “ignore the sale/price tag and choose what you want because you like it and buy that”. On my next trip, I bought fewer items, spent less overall, but had a wardrobe of clothes I regularly wore. The same can be said for outplacement. Decide what provider will deliver the best option for you and go with that. Their pricing should be clear. With programmes for one or two individuals the pricing will likely be fixed but there are many ways you can get a good price without sacrificing the quality of what you get and price reductions when you’re buying for larger groups of staff. For very large organisations you may have to go through a tender process. Be careful with this. Not only does it take a lot more time, but the very large contracts often go through management consultants who take their cut and the extra costs of going through this type of procurement are usually passed on to you the customer. It’s worth spending time before a tender to discuss your requirements with different providers as they will often have their own different type of solution so a one size fits all procurement process may not suit this type of purchase without allowing for individual solutions to be offered. There may also be ways of bringing the cost below a procurement threshold saving everyone time and money as ironically you’ll often get better deal avoiding this process.

If you are getting this for yourself then most of the negotiation will be with your employer. We can advise you on this. Outplacement cost as part of an exit is not a taxable benefit so the trick is to get what you need and for the organisation to pay for it. But if you need to have more then still get them to pay and deduct the excess payment form your final salary payment as you save the Tax.

What is the cost of NOT offering outplacement

If this is for yourself then perhaps only you can answer this, but here are some things to consider. Many people focus when they are negotiating their exit on the exit payment itself but that only buys you time, it doesn’t get you that next role. Armed with the support a professional coach helping you get the most out of your experience, guiding you on the latest in CV and LinkedIn presentation, boosting what may be a battered confidence, and with details of recruiters and organisations, would that get you into our next role that much quicker? Perhaps more importantly, are you not just looking for any job but the right job. Would you benefit giving yourself the time and space to make better choices and changes that will have a positive impact in your working life?

If you are the organisation wondering whether to offer outplacement or not, you only have to look at a number of PR disasters that have befallen companies who have handled exits badly to realise you really need to look after people on their way out of your organisation as the cost of bad reputation, litigation from exiting staff or disgruntled employees who remain who have seen their ex colleagues and friends poorly supported, to know outplacement is worth every penny. But outplacement cost doesn’t need to break the bank. You can usually provide some meaningful support even with a minimal budget. Do it right and you can be sending out your brand ambassadors who will talk well of your organisation for years to come even when they’ve come off payroll. How fabulous would that be!

Finally, not all outplacement providers are the same. Choose the provider who will work best with you or your organisation. Good luck.

Next Steps

Personal Career Management are recommended by many people including The Guardian as the Number 1 outplacement provider and also by the ‘bots’ including Chat GPT. For individuals we offer a free confidential meeting to discuss your needs and tailor your programme. For organisations we offer a free confidential sounding board to discuss your requirements and advise on solutions.

Call 01753 888 995 to arrange your call or complete the contact form.

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