Issues in Civilian Outplacement Strategies Proceedings of a Workshop (1996) / Chapter Skim
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PART I: OUTPLACEMENT RESEARCH AND EXPERTISE
PART I: OUTPLACEMENT RESEARCH AND EXPERTISE
Pages 11-56
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From page 11... ...
They note that individuals vary in their abilities to cope with job loss, although there is evidence that the way an organization handles outplacement can mitigate individuals' negative emotions. Wanberg and Hough add that this applies to individual employees who are staying with an organization (survivors)
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From page 12... ...
Also hard to find is information on how to evaluate the effectiveness of outplacement services offered by particular consultants. Finally, Wanberg and Hough review evidence on how the effectiveness of outplacement practices may vary with individual demographic differences (age, gender, race, etc.)
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From page 13... ...
The importance of job search assistance has been echoed in all the papers, and the experimental evidence presented by Vinokur reinforces its importance. Vinokur outlines some of the unique features of the JOBS Workshop that its creators believe to be responsible for its success.
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From page 14... ...
Although no two persons experience such loss in exactly the same way, if it occurs, it is likely one of the most significant events in an individual's life. In this paper, we review the psychological impact of unemployment for the individual, the trend in this country for organizations to utilize outplacement consultants, and the content and relative effectiveness of outplacement services.
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From page 15... ...
reported that unemployed participants in their study experienced a higher number of physical symptoms including allergies, bronchitis, coughs, colds, and shortness of breath, than an employed comparison group. Despite the fact that unemployment tends to be a stressful life event, there are wide individual differences in the ability to cope with job loss.
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From page 16... ...
Outplacement consultants typically refer to the organization as the client because it is the organization that pays for both the organizational and individual outplacement services. However, the organization and individual whose employment is terminated have different and sometimes conflicting needs.
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From page 17... ...
One decision is, of course, whether or not to have outside consultants or internal staff provide the organizational and individual outplacement services. Consultants are sometimes brought in early enough to help the organization plan the entire outplacement process.
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From page 18... ...
Empirical support has been shown for the need for outplacement services to help individuals resolve some of their feelings about job loss. Spera et al.
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From page 19... ...
Career Planning Outplacement consultants provide important assistance in working through the many career planning issues that arise following job loss. An outplacement consultant can help individuals examine their strengths and weaknesses, learn about different jobs and careers, and match their needs, skills, and abilities with the characteristics and
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From page 20... ...
Another important feature of outplacement services is a resource library that contains reading materials and databases or access to databases on industries, companies, and jobs. The individual utilizes these resources, along with networking, to identify job leads.
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From page 21... ...
Evaluating the Effectiveness of Outplacement Programs Empirical research assessing the effectiveness of outplacement programs and services is important and necessary, although few evaluation studies have been conducted (Leana and Ivancevich, 1987; Leana and Feldman, 1992; Kozlowski et al., 1993~. Organizations that purchase outplacement services want to know to what extent they are effective and worth the money they cost.
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From page 22... ...
Because careful records were kept regarding use of the center's services, it was possible to compare a random sample of the individuals who had only attended the workshop with individuals who attended the workshop and participated in the additional outplacement services. The data indicated
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From page 23... ...
Hoban (1987) notes that organizations can demonstrate that they have saved money in the long run by providing outplacement services to their employees.
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From page 24... ...
Although there has been little or no empirical research comparing the effectiveness of different outplacement firms and the various services they provide, a few suggestions for organizations choosing an outplacement firm are noted in the next section. Characteristics of Effective Outplacement Services Henrikson (1982)
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From page 25... ...
Although this is partially due to the fact that employers are now offering outplacement services to lower-level employees, it also reflects a cost-conscious attitude on the part of organizations and price wars between outplacement firms. Sweet (1989)
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From page 26... ...
Another study has suggested that the individuals that may benefit most from outplacement services are those who lack a general confidence
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From page 27... ...
Individuals who are concerned about financial resources, who have little social support from friends or family, and who are especially upset about being unemployed may also be ones who will benefit the most from outplacement services (Latack and Dozier, 1986~. Finally, special attention may be necessary for workers being laid off from federal employment.
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From page 28... ...
The database lists the type of skills that over 11,000 employers are recruiting for and identifies individuals with matching profiles (Harvey, 1994~. Outplacement services are also provided that help individuals through the process of transferring their skills from federal employment to the private sector.
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From page 29... ...
For example, it would be beneficial to conduct further research to assess the extent to which individuals receiving outplacement services are reemployed faster, receive salary increases, and are more satisfied with the jobs they find when compared with individuals who do not receive outplacement services. An optimal study on this issue would compare one group that received outplacement program services with a control group that did not on a number of variables, such as length of time to find employment, placement in chosen career, salary increases, etc.
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From page 30... ...
1983 How to evaluate executive outplacement services. Personnel Journal (April)
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From page 31... ...
Leana, C.R., and J.M. Ivancevich 1987 Involuntary job loss: Institutional interventions and a research agenda.
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From page 32... ...
Schlossberg, N.K., and Z Leibowitz 1980 Organizational support systems as buffers to job loss.
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From page 33... ...
Thus, they face the unattractive prospect of testing the labor market with job search skills likely to be rusty from lack of use, with little current information about job opportunities outside their immediate industry, and with firm- and industry-specific skills the value of which may have to be written off as obsolete. A large literature exists indicating that displaced workers suffer sizable earnings losses associated with lengthy periods of postlayoff joblessness and lower wages upon reemployment.
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From page 34... ...
This paper provides an overview of policies and programs currently under consideration by policy makers that are designed to assist displaced workers in overcoming labor market barriers to reemployment. It first briefly describes major types of displaced worker programs.
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From page 35... ...
Local postsecondary education and training institutions usually serve as subcontractors providing the actual skill training courses. Relocation Programs designed to speed up the reemployment process by assistance encouraging displaced workers to move from depressed to expanding local labor markets.
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From page 36... ...
Earnings subsidy plans increase the incentive to return to work, even at lower postdisplacement wages, by paying displaced workers who find a new job a temporary subsidy, the amount of which is proportional to the gap between pre- and postdisplacement earnings. Programs to Replenish Human Capital Displaced workers found to be in need of replenishing their marketable skills are usually referred to either classroom training programs or, less frequently, to firm-based training programs.
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From page 37... ...
Like the reemployment bonus, self-employment programs are an innovative attempt to make unemployment insurance less of an income maintenance system and more of a reemployment system. However, rather than being designed to expedite reemployment, the basic idea of self-employment plans is to develop the latent entrepreneurial talent possessed by some displaced workers.
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From page 38... ...
Rather, he suggests that the blue-collar orientation of Tier II training curriculums available from a local community college was not well matched to the backgrounds and interests of the mostly white-collar participants in the Houston project. The New Jersey Unemployment Insurance Demonstration Whereas the Texas WAD project served workers eligible for Title III programs under the lob Training Partnership Act, the New Jersey demonstration project was targeted to unemployment insurance claimants with characteristics common to displaced workers, namely, claimants older than age
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From page 39... ...
Unemployment insurance claimants who passed through a series of screens intended to identify individuals who would benefit from early intervention were randomly assigned to one of three treatment groups or to a control group. All eligible claimants assigned to the treatment groups were offered a common set of job search assistance services early in their claim period.
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From page 40... ...
The Trade Adjustment Assistance Study The Trade Adjustment Assistance program was created in 1962 to provide income support and, to a lesser extent, retraining to displaced workers who lost their jobs as a consequence of trade agreement conces
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From page 41... ...
Legislation passed in 1974 raised the level and duration of benefits and removed the linkage between tariff reductions and job losses by making workers eligible for adjustment assistance if expanding trade alone contributed to layoffs. Trade-displaced workers could receive extended unemployment insurance benefits (called Trade Readjustment Allowances or TRAs)
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From page 42... ...
To measure the labor market effects of retraining, the authors point out that the more appropriate comparison group is TRA recipients because their characteristics are more similar to those of Trade Adjustment Assistance trainees than those of unemployment insurance exhaustees. The time pattern of observed earnings differences between trainees and other TRA recipients indicates, as expected, that trainees were foregoing short-run earnings as part of their investment in skill training.
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From page 43... ...
A first set of reforms focuses on enhanced services to improve claimants' job search skills and on stricter enforcement of the work search rules that determine continuing eligibility for benefits.3 The job search assistance treatment in the New Jersey unemployment insurance demonstration is a test of this first set of reforms. Considered in more detail here are the second and third sets of reforms involving reemployment bonuses and self-employment programs.
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From page 44... ...
These experiments were designed to provide evidence on how to fine-tune the reemployment bonus concept by introducing more variation in the amount and timing of bonus payments. In the New Jersey Unemployment Insurance Reemployment Demonstration, the maximum reemployment bonus was specified to be one-half of the claimant's total entitlement, defined as a lump-sum payment capturing the stream of benefit payments to be received over the remaining weeks of unemployment eligibility.
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From page 45... ...
Perhaps the most important finding from the demonstrations is that interest in self-employment is not strong among unemployment insurance claimants. Benus et al.
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From page 46... ...
(Phases II and III will present net impact estimates.) The Phase I evaluation is based on the following sources of information: site visits of the research team to each of the six states, information collected from profiling proposals and administrative reports, and a customer satisfaction survey of profiled and referred claimants in the six states.
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From page 47... ...
Training Vouchers An important provision of the Reemployment Act of 1994 would have encouraged displaced workers to enroll in longer-term education and training programs by allowing eligible workers to qualify for up to one year of income support beyond the usual six-month maximum for unemployment insurance benefits.4 Although the act failed to achieve congressional approval, President Clinton has continued to emphasize the importance of long-term skill training. Specifically, he proposed in his 1995 State of the Union Address the elimination of essentially all adult training programs, with the money saved to be shifted to "skill grants" that eligible workers could use to pay for training programs of their choice lasting up to two years.
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From page 48... ...
Displaced workers file for unemployment insurance and are informed about the Workforce Development Partnership Program and other training options at their benefit rights interview.
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From page 49... ...
This work disincentive is especially strong for displaced workers who suffer large earnings losses because the benefits are based, in part, on predisplacement earnings. Thus, regular unemployment insurance benefits might be as much as 75 percent or even higher of the wages that such workers could expect to earn in their postdisplacement job.6 The Canadian government is currently conducting an experiment at five sites to test the effectiveness of an earnings subsidy program for displaced workers.
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From page 50... ...
Early evidence from a reemployment bonus program in Illinois indicated considerable promise that bonuses effectively speed up reemployment by offsetting the incentive of unemployment insurance claimants to delay serious job search until the end of their eligibility. Three subsequent experiments suggest, however, that reemployment bonus plans are no more effective than job search assistance programs, but at much higher cost.
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From page 51... ...
This experiment should help to resolve uncertainties about the labor market effectiveness and cost of earnings subsidy programs. Replenishing Earnings Potential Displaced workers found to be in need of skill upgrading in order to compete effectively for jobs in growing industries are usually referred to either classroom training or firm-based training programs.
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From page 52... ...
However, reemployment bonuses do a less effective job in targeting assistance to workers most in need of help because bonuses are either fixed in size or contingent on the claimant's unemployment insurance entitlement, whereas earnings subsidy plans directly relate the subsidy to the size of the earnings loss.
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From page 53... ...
Corson, Walter, Paul Decker, Shari Dunstan, and Stuart Kerachsky 1989 New Jersey Unemployment Insurance Reemployment Demonstration Project. Unemployment Insurance Occasional Paper 89-3, U.S.
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From page 54... ...
:91-131. Neal, Derek 1995 Industry-specific human capital: Evidence from displaced workers.
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From page 55... ...
The project is directed by several research scientists, including myself, with backgrounds in social psychology and organizational psychology. We designed the JOBS Workshop as an early intervention to prevent deterioration of mental health among unemployed people by speeding up the reemployment process.
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From page 56... ...
. We believe there are several unique features of the JOBS Workshop that account for its success in terms of both speed and quality of reemployment.
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