When great staff go

Career transition (or outplacement) firms have often been frustrated in recent years as their warning that the poor treatment of exiting senior staff hurts corporate reputation seems to have fallen on deaf ears.

By observing the departing employees over time, career coaches are in the humbling position of seeing people when they're at their most vulnerable in the immediate aftermath of a retrenchment. However, their work also provides the rewards of supporting them in rising to the challenges confronting them, and helping to generate career resilience. It is during this time that former employees begin to meaningfully process their employment experience and begin forming positive or negative judgements about their employer.

This is a process that the employer never sees and therefore the judgments formed by the former employee are no longer on their radar. Managers rarely contact a former employee to hear how they are doing and get an update of their progress. Former work colleagues do sometimes stay in touch, and it is through these channels that knowledge of the former employee's welfare seeps back into the company.

The recent release of the 2010 Outplacement Industry Benchmark Report confirms that when corporate reputations suffer in the minds of disgruntled employees, their willingness to promote the reputation of the firm to their contacts plummets: in fact most become active detractors of the firm. This was a survey mainly covering the experience of senior managers and professionals, and the results are therefore all the more disturbing for employers.

The survey used the Net Promoter Score methodology to assess an employer's reputation, in which former staff members were asked to rate how likely they would be to recommend their former firm as an employer to friends or family.

Individuals gave their former employers an average net promoter score of -71, indicating that the reputation of most employers amongst former staff is damaged by the poor handling of their exit from the firm. 

Career transition firms have argued for many years that staff terminations require as much support within the firm as is provided to the staff who remain. What is startling about these results is just how negatively former employers are viewed when senior staff are not given the respect in their exit that they believe is deserved.

The survey however did reveal a small number of organisations who handled staff outplacement well and retained ongoing loyalty.  In our experience, these firms take care to tailor advice around the particular needs of the individual, they practice rather than simply espouse true compassion, and they ensure that the career transition service supplied is coaching intensive, fully resourced and measured for effectiveness in delivering outcomes.

The survey found that of the 70% of former employees who thought their terminations were handled poorly, 90% of this group became active detractors of their previous employer.

This is a very sobering finding because it clearly indicates that regardless of what a firm might say about themselves as an employer in the marketplace, a groundswell of former employees are happy to tell those who will listen about the poor experience they had.

The survey clearly indicates that most employers do not handle the termination process well, and would significantly improve their reputations amongst past and current employees by addressing this area of practice management.

The release of 2010 Outplacement Industry Benchmark Report is the outcome of research that involved rating the responses of 341 senior executives who participated in the survey via SixFigures.com.au, the executive jobs, news, career, and networking site. The research was developed by ML Career Development Research (a division of outplacement and career transition firm Macfarlan Lane) and independently analysed by strategy planning and market research consultants Sandra Beanham & Associates.

About the author
Hugh Davies is managing director of Macfarlan Lane, a provider of career transition and career development services for CEOs, partners, senior executives and professionals