Outplacement Industry Booming in 2009?
A report from Insala provides some interesting insights into a business sector that is growing and expected to continue to grow in 2009:
Providing outplacement support to exiting employees has become standard business practice for many companies. The demand for such services is increasing in this heavy job-cutting market. This is evidenced by the following research:
- 81% of employers engage help from external outplacement providers (The Value of Outplacement, Reed Consulting).
- 50% of employers use only external outplacement providers (The Value of Outplacement, Reed Consulting).
- 34.1% of surveyed organizations offer outplacement services to certain classifications of employees, while 13.6% offer it to all of their employees (HRfocus Termination Survey 2008).
- 30% of 600 surveyed companies outsource outplacement services (H.R. Department Benchmarks and Analysis 2008, Bureau of National Affairs).
With this increasing usage, the outplacement industry has grown to a 3 billion dollar industry, and some sources state it is as high as 10 billion.
Financial performance data on individual outplacement firms is extremely limited due to the fact that the majority of firms are private. One public firm however recently reported a 25% increase in net revenue this year compared to last year. In September, Penna Consulting, a U.K. based public limited company reported their net revenue to be approximately 25% ahead of the same period last year and pre-tax profits earned in the first six months of this year will be higher than those of the full 2007/8 year. Consequently, they are projecting that market expectations for the full year ending in March 2009 will be materially exceeded.
Additionally, a recent news article, Area Braces for Upsurge in the Ranks of Jobless, reported Lee Hecht Harrison’s outplacement business was up 50% over the same time last year.