Happy small business team

Why Small Businesses Should Offer Outplacement Services

It’s a common myth that outplacement services are reserved for large enterprises who have high-volume layoffs and operate under the public eye. For them, outplacement is critical to protect their employer brand. Plus, they have the resources to afford it, right?

If you’re like many small business owners, you may feel that offering outplacement services is not necessary for an occasional or small-scale layoff. However, here’s the truth: A reduction in workforce, no matter how small, can be just as impactful for an SMB.

Here’s why you may want to offer outplacement services as an employee benefit.

Friendly colleagues meeting over coffee


Your employees are like family.

In small business, it’s common for staff to know each other on a personal level. If that’s the case in your company, you know how difficult it is to let one of your team members go. You may know your employee’s family and the negative impact a layoff could have on them. 

Offering outplacement services can protect that trust and community you have with your team and give you peace of mind that you’re giving your staff members the support they need to transition smoothly into a new opportunity.


Upset employees watching laid-off colleague pack up desk


Survivors are left in the wake.

When an employee is let go in an SMB, it leaves a big hole, especially if you have a tight-knit team. Your remaining employees are left with an empty seat in their morning meetings, one fewer colleague at lunch, and probably a sour taste in their mouths.

Remember, staff members aren’t usually clued in on why a teammate has been let go, so it can feel callous and abrupt (even when it isn’t). They may be feeling unsure about their job security and wondering if their values still align with the company’s. If you want to prevent fallout and retain your remaining staff, make sure you treat their departed colleagues with respect. Offering outplacement services to your transitioning employees lets survivors know that you support your team members, even when you can no longer employ them.


Laid off employee leaving a bad review of company online


Laid-off employees can damage future hiring efforts.

When an employee is let go from a job, there are often feelings of resentment and anger – especially if they don’t feel they were treated kindly or fairly. In that case, there is a risk they may deter future candidates from applying to jobs with your company.

They may post negative reviews on sites like Glassdoor or speak poorly of your company in your community. For large businesses, this is relatively easy to overcome since one employee represents only a tiny percentage of their overall workforce. However, for small businesses, this could be a huge hurdle to overcome. SMBs often rely on their local community for talent and support, so a strong reputation is key. Plus, one bad review online could take quite some time to bury if your current or former employees aren’t regularly posting reviews.

Outplacement services create a bridge to the next opportunity for your former employees, so they feel supported as they transition out of your company instead of being left high and dry without a job. Not only is it the right thing to do, but it’s also a tool for maintaining relationships with ex-employees and a positive image within your community.


Transitioning employee having virtual meeting with outplacement specialist


It’s affordable.

Outplacement services are not all prohibitively expensive. Look for providers who offer scaled-down packages to accommodate your needs and price point. In many cases, the best outplacement providers will even let you choose different services for each employee. That way, you can tailor the outplacement experience to each person without having to compromise based on price. For example, you may want to offer more services to a tenured or upper-management employee vs. a newly hired or entry-level team member.

Small businesses that do decide to offer outplacement services are usually thinking about the long-term benefits:

  • Preventing negative morale among survivors to maintain productivity and retain staff
  • Protecting their positive reputation in the community to make hiring easier in the future
  • Preserving the trust and community among their team


There’s no question that letting go of team members, even just one, can have a lasting impact on your small business. Outplacement is one way you can lessen the risk of damaging your internal culture and external reputation and give your transitioning employees a helping hand as they navigate a tough time.

by: Sarah Ballow
July 15, 2020