Outplacement

What is outplacement?

Outplacement (دعم الانتقال الوظيفي) is a service an organisation buys and provides to people whose employment with it has ended, with the aim of shortening the time they spend before they find other work.

One feature of outplacement governs everything that follows: the payer is not the beneficiary. The organisation pays, and the departing employee is the one who benefits, at a point when the relationship between the two has ended or is about to end. That separation between the buyer and the person the service is bought for is a source of the faults outplacement can develop, and it sets outplacement apart among the services an HR function buys.

What outplacement consists of

• Individual coaching sessions. These cover how to arrange the experience a person has into a form that can be presented, and how to identify the roles they are genuinely suited to. Their effect can be considerable, but it is hard to measure.
• Preparing documents: the CV, the published professional profile and the cover letter. This is the visible part of outplacement, but its value is limited, because a document does not create an opportunity where there is no market for it.
• Interview preparation, including preparation for one particular question: how to explain the reason for leaving. Someone who left in a mass layoff needs a different answer from someone who resigned.
• Market mapping and introductions: a list of the organisations that employ people in similar roles, and introductions wherever they can be made. Its value can be high, but nothing about it is guaranteed.
• Administrative support in putting together the papers a jobseeker needs.

What outplacement does not replace

Outplacement is a voluntary arrangement that the organisation buys, and the central point about it is that it stands in for none of the obligations the law lays down. In the sources we reviewed, which include the Saudi Labor Law (نظام العمل), we found no provision obliging an employer to buy outplacement or to offer it. Among the things outplacement can be confused with:

• Settling entitlements. Article 88 of the Labor Law requires the employer, whenever a worker’s service ends, to pay the wage and settle the worker’s entitlements within one week at most of the date the contractual relationship ended; where the worker is the one who ended the contract, the period is no more than two weeks. The week is therefore the general rule for any ending of service, whatever its cause, and the two weeks are a single exception confined to an ending by the worker. For how the period is counted, see our guide to wage payment dates and the final settlement under the Saudi Labor Law. Providing outplacement does not delay that period, and the service is not counted as part of what is owed.
• The service certificate and the return of documents. Article 64 of the Labor Law requires the employer to give the worker, on request and free of charge, a service certificate stating the date the worker joined, the date the relationship ended, the worker’s profession and last wage, containing nothing that harms the worker’s reputation or reduces their job prospects, and to return the certificates and documents the worker deposited. This is a duty that rests on the text of the law, not a feature added to an outplacement package.
• The final release (المخالصة). Accepting outplacement is neither a waiver nor an acknowledgement of a settlement. An organisation that makes the service conditional on signing a document has turned a service into consideration, and that alters the character of what took place entirely. Outplacement is voluntary in character. What follows for any statutory right when it is tied to a document the departing employee signs is a question the definition of outplacement does not settle.

Outplacement also leaves the procedural side of the exit untouched, such as exit clearance (إخلاء الطرف) and the steps connected with it.

When outplacement is offered, and the notice period

Outplacement is provided either during the notice period or after the relationship has ended, and the difference is practical. The first benefits from the person still being connected to the organisation, but it competes with the work they are still doing. The second is calmer and can reach further, but by then the break has already happened.

Article 78 of the Labor Law matters at this point. Where the employer is the one who gave the notice, the article entitles the worker to be absent for one full day a week, or for eight hours in the week, with pay, to look for other work, choosing the day or the hours by informing the employer at least one day beforehand. The notice periods themselves are set out in our guide to the notice period and termination under the Saudi Labor Law. This right is independent of any service the organisation buys, and its condition is in the text: the notice must have come from the employer. An organisation that tells an employee that coaching sessions replace this day has exchanged a statutory right for a voluntary service.

Because outplacement is offered to people whose employment has ended or is about to end, it arrives when they may be at their least ready to receive it. The timing and manner of the offer are therefore part of outplacement, not a preliminary to it. An offer made on the same day the decision is communicated can be heard as an attempt to soften the news, and can be refused for that reason alone.

Who outplacement is offered to

One format offers outplacement at a single level only: senior leaders. There is an evident reason for this, since each of them represents a higher cost and, in the organisation’s view, its responsibility towards them is clearer. But the format can produce the opposite effect inside the organisation. Those who remain see support being bought for people who already have wider networks and shorter routes to another job, and withheld from those who need it more.

The other format offers outplacement to everyone, with different components: market mapping and introductions for those whose market is narrow, and document preparation and interview practice for those whose market is broad. Its cost can be lower than it first appears, because market mapping and introductions, which can be the costlier component, are needed in the narrow roles rather than the broad ones. The choice between the two formats is not purely financial; it is a decision about what the organisation is saying to the people who stay.

Outplacement for employees who are not Saudi nationals

For an employee who is not a Saudi national and whose employment has ended, the situation has two parts. Alongside the question of the next job there is a question of the work permit and residence, which follows a separate process with separate authorities and deadlines. Outplacement does not touch that process or shorten it. Offering outplacement alone to someone in that position gives them something that does not answer the question they face first.

How outplacement is measured, and the measure that undermines it

The measure that matches what the organisation actually bought is the time to the next job, counted from the end of the employment relationship. It is examined alongside the participation rate: how many of the people offered the service used it. A service used by three of the twenty people offered it, a participation rate of 15%, is not a successful service, however good the results of those three. Naming the time to the next job as the measure does not state how much outplacement shortens it, and we make no claim about the size of that effect.

The placement rate, by contrast, is a measure that undermines itself, because the provider of the service is the one who defines both its numerator and its denominator: what counts as a placement, within how many months, and who is included in the count at all. A measure whose two terms are both controlled by the provider is not a measure. The remedy is to define these three points in the contract before outplacement is bought, or to drop the measure.

The incentive problem in outplacement, and the ways the service is bought

The problem returns to the starting point: the payer is not the beneficiary. The provider satisfies the organisation that pays, the organisation neither sees the service nor experiences it, and the person who experiences it has no say in renewing or ending the contract. The consequence is that the quality of outplacement is not corrected by the usual market mechanism, so it has to be corrected by design.

• A package with a fixed number of sessions. This is the simplest to buy, but the provider meets its obligation by using up the sessions, whether or not anyone benefited from them.
• A subscription for a set period: six months of access to coaching, for example, with no cap on the number of sessions. It is closer to what the beneficiary needs, because a job search does not follow a known schedule.
• A fee contingent on results. It is attractive in theory but risky in practice: it can push the provider to concentrate on the easiest cases and neglect the hardest, which are precisely the cases the service was bought for.

Whichever format is chosen, one safeguard cannot be left out: the organisation must receive feedback from the beneficiaries themselves, not from the provider alone. An organisation that relies on the provider’s report about its own service is relying on testimony a party gives about itself.

The cost and duration of outplacement vary with the level of the role and with the market, and we found no published figures for the Saudi market on either.

What outplacement is not

• An award or compensation. Those are sums that arise from the law or from the contract, such as end of service benefits, whereas outplacement is a service in kind that the organisation buys from a third party. One is not offset against the other.
• A recruitment agency. An agency works for an organisation looking for a candidate; outplacement works for a person looking for an organisation. The direction is reversed, and anyone who buys outplacement expecting a guaranteed appointment has bought something it does not sell.
• A reference. What the organisation says about a person’s performance is one thing, and the support it buys for them is another; neither can be inferred from the other.
• An exit interview. The interview gathers information that benefits the organisation, whereas outplacement is spending on the person who is leaving. Confusing the two can lead the departing employee to see the exit interview as part of a service for them, which it is not.

Before outplacement is bought

The question that comes before choosing a provider is: who is it for, and for which market? A single package bought for a hundred people of different levels and roles will be designed around an average that resembles none of them. Someone leaving a narrow specialist role needs market mapping more than interview practice, and the reverse holds for someone leaving a role found widely across the market.

The effect of outplacement does not fall only on those who leave. Those who remain in the organisation see how the leavers were treated, and that is how the employer brand is judged from the inside before the outside. The leavers themselves become an alumni network, people who can go on talking about the organisation to others. So the spending has an effect in three directions rather than one, and that is what explains why an organisation buys outplacement for people who no longer work for it.

This is an explanation of the concept and of the statutory provisions cited, not legal advice.

Related terms

• Exit Interview
• End-of-Service Benefits (EOSB)
• End of Service Calculation
• Employee Value Proposition
• Attrition