Between September 1989 and September 1995, planned downsizing reduced the civilian workforce of the U.S. Department of Defense from over I million to just under 850,000. By the year 2001, this number will be reduced by another 119,000. As Deputy Assistant Secretary for Civilian Personnel Policy Diane Disney noted in her opening remarks, "The Department of Defense is undergoing a restructuring and downsizing that dwarfs what is going on in the private sector. Reductions in military personnel are, for all practical purposes, over; the civilian reduction is not. The good news is that we are two-thirds of the way through. The bad news is that we still have one-third to go."
This workshop was organized to generate creative ideas about outplacement for this "one-third to go." In particular, the Department of Defense wanted to bring together a group of private-sector executives to discuss outplacement practices that have been effective in helping their departing employees find new jobs. To add to the discussion, several scholars and professionals with experience in outplacement were asked to write research or practice summaries and participate in the workshop. The workshop format comprised two sessions: the first covered current research on outplacement, and the second covered industry outplacement experiences.
One of the workshop participants, Anne Messenger of Lockheed Martin, noted that there are many different names for the phenomenon of outplacement, often used interchangeably: reengineering, firing, downsizing, right sizing, unemployment, dislocation, layoffs, and outplace
ment. Ten years ago, no one associated specific activities or practices with the word outplacement. Gerald Bush, author of one of the papers presented at the workshop, noted that commercial outplacement activities were not reported in U.S. industry before the early 1960s, and that the first outplacement companies were not established until the second half of the 1960s. Despite its recent origins, the field of outplacement has generated considerable commerce, interest, and expertise over the last decade. The experts gathered for this workshop discussed a wide variety of outplacement issues and practices, keeping in mind the question, "What best practices can be identified to guide organizations (specifically, the Department of Defense) in effectively managing outplacement?"
For the purpose of these proceedings, outplacement is distinguished from reengineering, downsizing, layoffs, and the like. It is defined as the processes and practices needed to manage the involuntary movement of employees out of their jobs and the organization. This focus on involuntary moves distinguishes outplacement from internal moves to other jobs in the organization and from voluntary moves out of the organization. Downsizing or reengineering are terms that can be used to encompass all such moves.
The workshop focus on outplacement is a narrow one within the context of ideas and practices used to restructure organizations and develop jobs. For example, employees can be refrained and redeployed within an organization; joint community, government, and organizational efforts can be combined to develop closing facilities as business incubators for jobs; reorganization may be done to prevent the need for outplacement altogether. The Department of Defense is aware of the breadth of reengineering and downsizing alternatives that can be used in addition to involuntary outplacement, and it has considered and implemented many of them since 1989. Despite ongoing efforts to locate and develop internal employment for its civilian workforce, the Department of Defense still faces the need to outplace. The goal of the one-day workshop was to bring together some of the best people and ideas from research and practice in a lively discussion with representatives of the Department of Defense.
WORKSHOP MODEL OF OUTPLACEMENT
The workshop focus was clearly on the results that organizations want from investments in outplacement and the activities and practices most likely to achieve them. It is clear from the papers and presentations that organizations cannot manage outplacement without understanding the community in which downsizing and outplacement will occur and the individuals that outplacement will affect. Furthermore, there is no
single best way to do outplacement. Each organization must take stock of its own situation and identify the types and the mix of outplacement practices needed.
Figure 1 presents a model of outplacement as it evolved from the workshop papers and presentations. The figure lists differences in the results, practices, and major considerations faced by organizations, communities, and individuals involved in outplacement. These workshop proceedings are based on this model.
The focus of the workshop was on organizational concerns in outplacement. Although organizations may differ in their priorities, most want some combination of the results shown in Figure 1. Organizations want to manage outplacement so that their reputations as a good employer, a good place to work, and an employer of choice are maintained. Most want to minimize potential litigation, as well as control other costs associated with downsizing and outplacement practices. And most want to maintain a workforce able and willing to continue performing necessary work, either indefinitely or during the phased downsizing typical of facility, base, and plant closures.
Certain outplacement practices are common to organizations concerned with effective management:
Planning for downsizing and outplacement in ways that not only meet the organization's strategic needs but also provide a solid and unbiased foundation for answering questions about who remains and who goes;
Communicating in ways that cover a spectrum from the initial downsizing announcement to the training of supervisors in the content and form of exit interviews;
Providing resources for the transition of employees out of the organization, ranging from retirement options, to extended leaves of absence or other training opportunities, to fully equipped off-site career centers staffed to assist employees in dealing with job loss and finding a new job;
Customizing transition programs to meet the specific needs of the organization and to accommodate workforce diversity; and
Monitoring all aspects of the transition: the numbers of employees using different transition options, the rate and quality of reemployment associated with career centers, the morale of the remaining or ''surviving'' workforce, and so forth. The results of monitoring inform the organization's future decisions about the investment of resources and customization for outplacement programs.
Coordinating community resources
Effective social service
New employment contract
Availability and centralization of services
Size/diversity of businesses and labor force
Level of unemployment
Resource transition center
Maintain workforce capabilities
New employment contract
Extent of downsizing (timing and head count)
Searching for jobs
New employment contract
However, organizations differ along many dimensions that influence their choices about outplacement practices. For example, differences in organizational size (and resources), differences in the centralization of management decision makers, and the geographic location of major facilities will all affect organizational planning and customization of outplacement practices. The organization's business mission, the extent of downsizing anticipated, and the nature of the organization's current workforce and the workforce to be downsized (in terms of numbers, skills, tenure, age, gender, and so forth) will also influence outplacement choices.
For example, consider two hypothetical organizations: Weber, Inc., and Burns & Stalker Associates. Weber, Inc., is a Fortune 1,000 firm, employing over 25,000 people, and its facilities, including headquarters, are centralized in the Atlanta metropolitan area. Weber is in the process of downsizing about 10 percent of its workforce, mostly professional and managerial employees with 10 to 15 years tenure. The downsizing complements other company efforts to reduce management hierarchies and streamline decision making in a highly competitive and unpredictable business environment. The downsizing is a first for Weber and is scheduled to occur over the next three years.
In contrast, Burns & Stalker Associates is a much smaller firm, employing only about 5,000 people in facilities scattered across the United States, mostly in rural labor markets. Burns & Stalker Associates plans to completely close one of its facilities, letting go 750 employees over the next year. These employees are, on average, young (under 35), with company tenure of under 10 years. They have manufacturing assembly and craft skills. The Burns & Stalker facility has been operating in this small rural community for generations, and, although there have been frequent layoffs and recalls, no one ever thought closure a real possibility.
These two organizations are both planning, communicating, resourcing the employment transition, and customizing and monitoring the process, but with differences. Weber, Inc., is planning downsizing with an eye to future peaks and valleys in its demand for labor. In addition to retirement options, Weber, Inc., has planned a series of workforce "buffers" that will help maintain some contact with employees (short of keeping them on the full-time payroll) in anticipation of future periods of high labor demand. Examples of buffers include extended leaves of absence and job banks in which selected employees can enroll for contract jobs within the company.
Company communications with employees highlight this notion of a flexible workforce, spelling out which employees will be eligible for buffering options and which will be permanently outplaced. As part of the communications process, supervisors are being trained to conduct out
placement interviews and are given information on benefits, severance, references, and last day of employment for each employee.
In addition to buffers such as retirement, leaves, and contract jobs, Weber, Inc., has provided resources for an off-site career center in the Atlanta area. This career center is customized to serve outplaced professionals and managers. Its expert staff offers one-stop emotional and financial counseling, career guidance, and training for job search skills. The center offers work space, phones, computers, Internet access, and job postings. Finally, Weber, Inc., has developed baseline measures to monitor costs, use, satisfaction levels, and the like for its buffers, including its career center.
Outplacement planning at Burns & Stalker Associates has been allocated to management at the facility to be closed. The planning focuses on the order in which employees will be outplaced and when their outplacement will occur as operations wind down. The company needs to maintain some personnel until closure. Communications include an initial company-wide announcement of the closing, followed by meetings with groups of employees. Letters are being sent to individual employees and their families; these letters detail benefits, severance, and other relevant news about the outplacement process and individual employees' rights. Press releases are being provided to local media. Supervisors are receiving short training sessions on how to handle outplacement interviews. A counselor is available to assist with these interviews.
Burns & Stalker has involved the community in its planning process via a community-wide task force. Task force members include: local and state unemployment workers, social service workers (alcoholism, psychological counseling, clinical social workers, welfare representatives, etc.), bank representatives and financial/tax counselors, people from the surrounding training institutions, other local employers, career counselors, and police and hospital workers. This task force is helping to centralize and coordinate services to assist employees in dealing with job loss, assessing skills, and searching for new jobs. Burns & Stalker has rented space at a local community college to be used as a career center during working hours several days each week. Local service representatives spend regular hours at the center each week and set up appointments for different types of counseling and career guidance. The people from the local branch of the state unemployment service and instructors at the community college provide job search workshops, including sessions on resume writing, interviewing, and networking. Finally, Burns & Stalker is monitoring how many employees retire, relocate, get jobs in the area, delay reemployment to get additional training, and become self-employed.
Individuals and Communities
Organizations cannot effectively manage outplacement without understanding and accommodating the individuals and communities involved. Figure 1 suggests that the outplacement results that individuals and communities desire differ from those that organizations desire. Most individuals want to be reemployed as quickly as possible, ideally in jobs that match their skills and offer earnings similar to those of their former jobs. They want to minimize the stress and disruption associated with job loss, job search, and adjustments to new jobs for both themselves and their families and friends. Communities want to minimize the stress outplacement imposes on social services, police, and local businesses while continuing to provide all services as effectively as possible. Most communities also want to cooperate with organizations in helping individuals find reemployment in order to maintain the economic vitality of their area.
Like organizations, both individuals and communities differ in terms of the major considerations that influence their choices about the outplacement practices that are best for them. Weber, Inc., has tried to accommodate the community and the individuals who will be losing their jobs in its outplacement practices. For example, its facilities are concentrated in the major metropolitan area of Atlanta. The company has hired experts to staff its career centers, and they are expected to coordinate with the many social and other services the community provides for outplaced employees. Some dollars have been allocated to the local social services to offset the anticipated increase in demand. Weber, Inc., has hired recruitment experts to help identify and develop area job opportunities for professionals and managers, and Weber's top managers have also talked to their contemporaries in other organizations about job opportunities. The consultants hired to run Weber's transition center have proprietary job banks that consist of electronic databases listing national, regional, and local employers seeking specific types of skills and experience. Transition center participants from Weber assess their own skills and experience and match these with jobs found in the database. Finally, Weber, Inc., has tailored the assistance at its career centers to meet the needs of the professional and managerial employees who have been with the organization for most of their careers. The counseling for grieving and for assessing skills and planning for a new job, as well as the workshops for marketing skills and building networks, are all geared to these particular employees.
Burns & Stalker has also recognized community and individual needs in its outplacement efforts. The company has directly involved all the community in these efforts. The company/community task force is the
touchstone for job development and community services. Although the company has directed some dollars to the task force to offset increased demand for community services, the task force has also been charged with using all potential public sources of funding. The labor market surrounding the closing Burns & Stalker plant is small and heavily dominated by manufacturing. As a result, the company/community task force has become actively involved in job development, including opportunities for self-employment. The company/community task force has conducted surveys of displaced worker skills and of job opportunities at regional employers and set up job fairs to help match workers with opportunities. Finally, the counseling, planning, and training offered to outplaced employees has been tailored to relatively young manufacturing and craft workers. Counselors understand that, for many of these people, Burns & Stalker has been like a part of the family for at least two generations.
The model of outplacement in Figure 1 and the two hypothetical companies described serve to illustrate that organizational outplacement practices can be viewed as a continuum of choices: from no planning to extensive planning (as in the case of Weber, Inc.), from no communications to extensive communications, from no customizing to highly specialized programs, and so forth. An organization's choices about outplacement practices will be influenced by considerations such as its size, the extent of the downsizing, its business mission, and workforce demographics. In addition, the organization must understand the needs of the employees being outplaced and the community that will be serving their needs in order to manage outplacement effectively. In short, although there may be generic "best practices" in outplacement, the development, mix, and emphasis among practices is unique to each organization and the individuals and communities involved.
The New Employment Contract
There was particular discussion at the workshop of one outplacement result: the new employment contract. The fundamental difference between the new employment contract and the one that has been characteristic of many organizations is that, under the new contract, the organization makes no promises about a long-term career. The key phrase used at the workshop and often heard in organizations today is, "we offer employability, not employment." That is, organizations now offer individuals paid opportunities to develop skills. These skills will be employed by the organization contingent on its demand for them, or individuals can use these skills to pursue other opportunities in the job market, including self-employment and contracting.
The new employment contract has outplacement implications for organizations, communities, and individuals. For organizations, the new employment contract implies that downsizing may be a stable feature of internal labor markets, so employees' job search skills should be kept current whether they are directly in line for outplacement or not. In its planning, communications, and training, the organization needs to recognize the new contract so that both continuing employees and short-term and contract employees understand and are prepared for it. Moreover, if organizations are to be involved in outplacement as an ongoing activity, then more systematic evaluation of outplacement practices is needed to determine what works and what doesn't. For individuals, the new employment contract requires a mental framework encompassing ongoing development of skills, marketing of skills, more flexibility about work arrangements and environments, and continued networking to keep in touch with work opportunities. Finally, for communities, the new employment contract means that the demands made on social, training, and financial services by outplacement will become a more permanent feature of community life. Communities need to start planning, coordinating, and funding services to meet such ongoing demands.
PLAN OF THE PROCEEDINGS
The workshop model of outplacement presented above is used throughout the rest of these proceedings as an organizing principle. Part I begins with a commentary on two of the three papers commissioned for the workshop. These papers are included in Part I, and summarize the psychological and labor market research on outplacement. Part I ends with a summary of remarks by Amiram Vinokur, a social psychologist whose research examines programs to assist people in job search.
Part II includes a brief overview, a paper by Gerald Bush summarizing organizational outplacement experiences, and the remarks of five industry participants whose organizations have ongoing outplacement programs or who are actively engaged in outplacement as consultants.
Part III concludes the proceedings with a closer look at the civilian outplacement task facing the Department of Defense. The implications of the workshop model, the papers, and participants' remarks that are especially relevant for the Department of Defense are highlighted.