AN ABRIDGED, OR CLIFFSNOTES®*, VERSION OF THE HISTORY OF THE OUTPLACEMENT INDUSTRY
By Paul Schneider
How did it all begin?
Outplacement has its roots in the job search counseling services designed and delivered by Bernard Haldane following World War II to assist veterans with reentry into the postwar workplace. In the 1960s companies expanded Haldane’s services to include consulting with corporate HR professionals and how to terminate employees, remove them from company payrolls and support their job search efforts until they found new positions. They called the service outplacement. Today many firms call the program career transition. Those returning GIs came home from the war and found the jobs they left behind no longer existed. They needed help translating their pre-war and wartime experiences into marketable skills.
In the early 1960s, Saul Gruner, a Haldane franchise owner in New York, provided Humble Oil Company in Bayonne, New Jersey with the first known corporate outplacement project. Prior to Humble Oil, corporations did not support laid off employees with job assistance. Terminated employees had to pay retail outplacement firms like Bernard Haldane to help them with their job search efforts.
In the late 1960s and 1970s, Drake Beam Morin, now part of Lee Hecht Harrison, and tHInc, now part of Right Associates, expanded their psychological consulting practice in New York to include outplacement. In the late 1970s, Robert Hecht left DBM and formed Lee and Hecht, later adding Steve Harrison to the marquee.
Independently owned outplacement firms like Kensington International joined together in organizational structures that gave them international networks. The three largest are Career Partners International (CPI), of which Kensington is a part, with almost 200 global offices, Outplacement International and Lincolnshire. By 1980, there were over 50 outplacement firms in the United States. In 1990, there were 200 and by the middle of the 1990s, the number had grown to 300 firms. In Chicago, in the late 1990s, there were about 43 outplacement firms. This number included a number of franchised companies. Today the number is closer to 10.
Outplacement, as a startup industry, attracted experienced business professionals, professional counselors, search professionals, and former clergy. There were no industry standards of competencies, performance criteria, training or qualifications for entry into this burgeoning field. Also, there was no formal organization with which outplacement practitioners could share information, network, or receive professional development from.
Therefore, in 1982, an outplacement trade organization was founded. It was called The Association of Outplacement Consulting Firms and now goes by the name of the Association of International Outplacement Consulting Firms. The Association established a code of ethics and standards of professional practice.
The outplacement industry started as a way to assist World War II veterans in finding jobs after the war. It continued as the employee/employer relationship that followed World War II changed. Prior to World War II, employers hired employees with the implied promise that there would be job security throughout their lifetime work career. This social contract changed after World War II as companies wrestled with recessions and the global business market. Because of the changing dynamics of the new world of work, the outplacement industry grew. Companies contracted with career transition firms to assist their former employees with the changing job environment.
The outplacement industry coached these employees that job security was no longer a condition of employment. Employees learned they needed to manage their own careers. In this sense, they went back to the pre-industrial revolution era where their forefathers were self-reliant and independent workers. It was their responsibility to begin a lifetime of continual learning to prepare for their next job assignment.
What has changed?
The outplacement delivery model has significantly changed over the past 50 years. Originally it was offered only to senior executives. The outplacement firm worked with them until they found a new position. However, as downsizing continued in the 1980s, 1990s, and especially between 2008 and 2011, those services were offered to middle management professionals, administrative and hourly employees. Today, the large firms deliver more group workshops. They use these seminars to cover more common job-search issues. The Internet has shifted the focus from career consulting in transition to a technology-based job replacement function.
Outplacement firms have expanded their offerings to include coaching, leadership development, executive search, HR consulting, etc. These products build on the expertise and knowledge of the firm in their employees.
What is the future of outplacement?
We have watched as the industry started with psychologists assisting senior executives with their job search to today, transitioning to the large firms moving to group coaching and relying on technology for job-search support.
This writer believes that the career transition industry will continue to evolve. You will find more international firms entering the market. They will follow the lead of LHH and Right and offer shorter technology-based group programs. On the other end of the spectrum, you will find boutique firms similar to members of Career Partners International or associations similar to CPI. These companies will continue to offer more personalized and custom career transition offerings. The latest job statistics show 82% of managers, professionals and levels above find their current position through networking, not the Internet. A major reason for the decline in the number of boutique firms is the age of the owners. Many of these entrepreneurs founded their firms in the late 1980s. They are now seeking to retire. The owners have a few options: they can try to sell to one of the global firms, find a local buyer, or close.
Just like the outplacement industry, outplacement programs have evolved. Some pundits have conjected with all the social media, such as LinkedIn, Facebook, etc., millennials will not need career transition support. As someone who has three children under the age of 40, I can assure you that this generation doesn’t yet understand the key to finding the right position – networking. Besides this key element, they need assistance writing a resume, understanding the job market, cultural fit and potential future careers. Who knows that the future holds? Did anyone think the Cubs would win the 2016 World Series!?!
The writer welcomes comments on this article, especially the future of the outplacement/career transition industry.
*If you’re under 30, you may need to Google CliffsNotes HERE.
Paul is a Partner at Kensington International. He brings over 25 years of human resources professional experience in a variety of industries, from the plant level to corporate headquarters and plays a critical role for the firm as a trusted advisor to countless human resource leaders.
Contact Paul at 630.240.0202 or at email@example.com.