Outplacement Firms Struggle to Do Job
By
PHRED DVORAK and JOANN S. LUBLIN
The
Wall Street Journal
When PepsiCo Inc. laid off administrative assistant
Sonia Service in February 2008, she thought she'd have a leg up on her next
job. Pepsi referred Ms. Service to an "outplacement" firm that
specializes in helping laid-off employees get new work.
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Dennis Kale for The Wall Street
Journal
Damian Birkel, a former outplacement
counselor, teaches at Professionals in Transition, a nonprofit self-help group
he founded for the unemployed.
Eighteen months later, Ms. Service
says outplacement was a waste of time. She says the job-search training was
rushed. During a practice lunch interview, a coach chided her for ordering
cranberry juice, saying it could be interpreted as a sign of a urinary-tract
infection, she recalls. Her résumé was sent to a prospective employer with a
cover letter that included a typo and bore her signature -- which she says she
never saw.
"I am embarrassed," says
Ms. Service. She still hasn't landed a job.
As demand rises in the $4
billion-a-year outplacement business, providers increasingly offer standardized
services, which some workers say offer little value. Businesses anxious to shed
former employees quickly and cheaply impose time limits that hamper
effectiveness. Few employers track whether outplacement works.
Skeptical employees are voting with
their feet: Executives estimate about 40% of workers offered outplacement
services don't show up; some ask for cash instead.
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Letters
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Compare cover letters for two
job-seekers.
Some industry participants, too, are
troubled by reports of mass-produced résumés, canned job advice and slipshod
counseling. "It breaks my heart when I hear about stuff like that
happening," says Celeste Calfe, North American board president of the Association
of Career Firms, a trade group. "And I know it's happening."
Outplacement firms say some
frustration with their services reflects the stress of trying to find work
during the downturn. "We understand that clients get angry; angry at their
former employer, angry at us, angry at the prospective employers that don't
seem to be calling back," John Challenger, CEO of Chicago-based
outplacement firm Challenger, Gray & Christmas Inc., wrote in response to
questions.
Outplacement services arose in the
1960s to provide out-of-work managers with the trappings of a job, such as an
office, a phone and a secretary. Layoffs were less common and participants
needed to battle the stigma of losing a job.
By the 1990s, outplacement firms
expanded to serve everyone from CEOs to hourly workers. Providers competed by
lowering prices, offering volume discounts to corporate clients for an
increasingly standardized menu of workshops and referral services.
Now, outplacement is a standard
feature of corporate layoffs. More than two-thirds of 265 U.S. employers with
layoffs during the past two years offered outplacement, at an average cost of
$3,589 an employee, according to a June survey for The Wall Street Journal by
the American Management Association and Institute for Corporate Productivity.
Recipients typically get access to
an office and a coach, either in one-on-one or group sessions. They also
usually get help with résumé writing, interviewing and job leads.
Business is booming amid the
recession. Right Management, the Manpower Inc. unit that's the nation's largest
outplacement firm, posted a 36% increase in second-quarter revenue, to $158
million. Right expects to serve 200,000 people world-wide this year, twice as
many as last year; it says revenue is rising more slowly because companies are
opting for cheaper group services. Second-quarter revenue at Lee Hecht
Harrison, another big provider that is a unit of Switzerland's Adecco SA, jumped 57% to $119 million.
Journal Community
Outplacement firms say their
services are effective. Right Management says 95% of the people who used its
services in 2008 were satisfied. The company says clients who report back to
them about getting jobs do so in an average of 16 weeks. Challenger, Gray &
Christmas, which says it pioneered outplacement, says its clients find jobs in
a median of 14 weeks.
Yet both companies say they don't
track the percentage of total clients who find work before their outplacement
programs end. Challenger says it's now writing software to do so; Right
Management says it's hard to get accurate data since some clients leave
midprogram and others don't notify the firm when they land jobs.
Employers say they offer
outplacement to protect their reputations, forestall lawsuits and minimize
unemployment-insurance payments.
It's "a good thing to do from a
PR perspective," says Manny Avramidis, the American Management
Association's senior vice president for global human resources. Mr. Avramidis
says he isn't sure if outplacement is effective, but he offered the service to
60 workers the AMA laid off in October.
Outplacement typically begins the
day an employee is laid off. Providers often send staff members to each work
site to explain their services. The process helps companies efficiently show
employees the door, and gives the outplacement firms -- which are often paid
only for the workers who use them -- a chance to market themselves.
Employees usually gain access to
online seminars, group workshops and individual time with a coach, for periods
ranging from a month to more than a year. Programs for executives, priced
around $10,000 and up, generally provide a private office and more coaching
time; those for midlevel managers or clerical workers, priced $5,000 or below,
may offer a chair and phone at a shared table. Workers can also tap job-search
boards.
Some activities appear to follow
routines. Two Challenger clients, executives from different companies and
different parts of the country, describe mock job interviews over lunch with
their coaches.
One man says he was scolded for not
following his coach to the restroom to continue the conversation. The other
says he was chided for ordering diet soda because it suggested immaturity. Both
executives asked not to be identified.
Cigdem Oktem, a management
consultant, was laid off by Corporate Executive Board, a Washington, D.C.,
consulting firm, in February, along with a few hundred colleagues. Ms. Oktem
says she got six months of outplacement counseling at Lee Hecht Harrison's
Washington offices. When a family emergency demanded her attention for a few
months, Lee Hecht let her pause and restart the service.
Lee Hecht provided a clear, 10-step
process for finding a job, including a spreadsheet for tracking calls, leads
and interviews, Ms. Oktem says. The firm organized weekly meetings where she
could trade tips and contacts. And it gave her unlimited one-on-one access to a
coach, with whom she still meets every two weeks for advice and moral support.
She hasn't found a job yet, but has interviews lined up. Overall, she says,
outplacement has been a boon.
One challenge for the industry is
that laid-off workers have different needs. Some like going to an office;
others are happy to connect online. Many like career counseling but don't want
help with their résumés.
By contrast, John Farmer, a
61-year-old executive in Dallas who was laid off from a financial company in
February, hadn't written a résumé in 20 years and wanted help. But he found
coaching sessions to be "almost like grief counseling," he says.
"One size doesn't fit
all," says Harry J. Martin, a management professor at Cleveland State
University and one of the few academics to study outplacement. Mr. Martin was
co-author of a paper last year decrying "commodity outplacement" and
urging more individual attention.
Some employers are experimenting
with cheaper approaches. Lora Villarreal, chief personnel officer at Affiliated Computer Services Inc., last year
hired RiseSmart Inc., an online provider, to offer outplacement to 4,200
workers. RiseSmart culls job boards and social-networking sites, then sends
weekly alerts to users. It also provides individual phone counseling and online
group seminars.
Ms. Villareal was unhappy with ACS's
prior, more expensive outplacement firm; she says former staffers complained
they didn't get individual attention. RiseSmart CEO Sanjay Sathe says a
standard six-month package costs an employer about $2,500 a person.
Chet Shubert, 53, arranged
outplacement as a human-resource executive at Wyeth Pharmaceuticals and
National Starch & Chemical Co. Last year, it was his turn, when he was laid
off following a merger. He says he was offered several months of outplacement
at Right's Management's Philadelphia office. In his first group meeting, he was
surprised when a staff member said the firm didn't track how many clients get
jobs.
Mr. Shubert says he got access to
job-posting sites and group workshops on topics like preparing a résumé or
closing a deal; equivalent material can be found online, he says. He says his
coach didn't offer useful advice.
Mr. Shubert's verdict: "truly
boilerplate" and "lacking for middle and upper management." He
says he stopped going after about a month; he later found a job on his own,
from which he was recently laid off.
Right President Doug Matthews, in a
written response, says each participant works with a coach to develop a
job-search plan tailored to his or her "unique learning style, needs,
skill level, and desired outcome."
Damian Birkel, a career coach,
joined Right in June 2007, initially as a contract counselor and later as a
full-time employee. He primarily worked from home, but spent at least one day a
week in Right's office in High Point, N.C.
Mr. Birkel says Right assigned him
60 people, a minimum of 15 a day, to coach by phone or online. One month of
outplacement included no more than four hours of counseling, he says, a limited
number of online seminars and access to a portion of Right's Web site. Most
users received one to three months of services, which often ended before they
found work, he says.
Mr. Birkel says Right fired him in
August 2008, after he extended counseling time for people whose outplacement
had expired. One was a single mother who'd missed appointments while trying to
retain her foreclosed home. "I wasn't cut out for over-the-phone, fast-food
outplacement," says Mr. Birkel.
Right's Mr. Matthews confirmed Mr.
Birkel's employment dates but declined to comment further, citing privacy laws.
He says Right is committed to "individualized counseling."
Ms. Service, the former
administrative assistant at Pepsi, was offered outplacement with Challenger,
Pepsi's main provider for about the past decade. She was invited to a two-day
individual workshop in a suburban New York hotel near her former office, where
a coach reviewed skills such as crafting résumés and cover letters.
The coach said Challenger would
check online regularly for relevant vacancies, then send Ms. Service's résumé
and cover letter to prospective employers.
Ms. Service didn't like Challenger's
rewrite of her résumé because it contained too many dates she thought would
reveal her age; she says she asked Challenger not to use it. Ms. Service says
she never saw the finished cover letter. Ms. Service was later surprised to
find that the résumé and a cover letter -- which contained a double comma and
the date written as "February 05" -- had been sent to a New York
public-relations firm on her behalf earlier this year.
Documents reviewed by The Wall
Street Journal showed the materials resemble those of another ex-Pepsi job
seeker sent to the same firm -- including the same typo and quirky date style.
The firm's president says he eliminated both women from consideration as his
executive assistant. "We didn't take the letters seriously because they
did not reflect an understanding of our company -- and they looked alike,'' he
says. (Click here to see the letters.)
Ms. Service says she learned about
the mailed letter and résumé from the Journal. Pepsi spokesman David DeCecco
says the issues raised about Challenger's service "are news to us."
He says the company is working with Challenger "to improve this
service."
In a written response, Mr.
Challenger says his firm tells clients it will automatically send materials to
prospective employers. Mr. Challenger says clients are told someone else will
sign letters on their behalf, in the roughly 3% of cases where the firm sends
materials out by mail.
The firm says it crafts standard
cover letters with its clients and asks them to approve the final version.
"While the introductory and closing paragraphs are similar across many
cover letters, the meat of the cover letter is individualized by the
client," Mr. Challenger writes.
Though pieces of advice may seem
"silly," he said they are part of an overall message to always think
about perceptions of the interviewer. "Ordering ice tea, water or coffee,
doesn't stand out. Ordering cranberry juice might."
Write to Phred Dvorak at phred.dvorak@wsj.com and Joann S. Lublin at joann.lublin@wsj.com
Printed in The Wall Street Journal,
page A1
Copyright 2009 Dow Jones & Company, In
Out of Work, and Too Down to Search
On
Steve
Hebert for The New York Times
“You send out so much, and you don’t
get responses. Then when you get called in, you’re treated like you’re too
old.” RAY RUCKER, a 62-year-old former facilities manager from Overland
Park, Kan. More Photos >
By MICHAEL LUO
Published: September 7, 2009
The
New York Times
They were left out of the latest
unemployment rate, as they are every month: millions of hidden casualties of
the Great Recession who are not counted in the rate because they have stopped
looking for work.
Slide Show
Faces of the Uncounted Unemployed
Enlarge This Image
Michael F. McElroy for The New York
Times
“There are thousands of people
applying for every job I’m looking at.” RICK ALEXANDER, a master
carpenter living in Florida More Photos »
But
that does not mean these discouraged Americans do not want to be employed. As
interviews with several of them demonstrate, many desperately long for a job,
but their inability to find one has made them perhaps the ultimate embodiment
of pessimism as this recession
wears on.
Some have halted their job searches
out of sheer frustration. Others have decided it makes more sense to become
stay-at-home fathers or mothers, or to go back to school, until the job market
improves. Still others have chosen to retire for now and have begun collecting Social
Security or disability benefits, for which claims have surged.
Rick Alexander, a master carpenter
in Florida who has given up searching after months of effort, said the
disappointment eventually became unbearable.
“When you were in high school and
kept asking the head cheerleader out for a date and she kept saying no, at some
point you stopped asking her,” he said. “It becomes a ‘why bother?’ scenario.”
The official jobless rate, which
garners the bulk of attention from politicians and the public, was reported on
Friday to have risen to 9.7 percent in August. But to be included in that
measure, which is calculated by the Bureau of Labor Statistics from a monthly
nationwide survey, a worker must have actively looked for a job at some point
in the preceding four weeks.
For an increasing number of people
in this country who would prefer to be working, that is not the case.
It is difficult to assign an exact
figure, because of limitations in the data collected by the bureau, but various
measures that capture discouragement have swelled in this recession.
In the most direct measure of job
market hopelessness, the bureau has a narrow definition of a group it
classifies as “discouraged workers.” These are people who have
looked for work at some point in the past year but have not looked in the last
four weeks because they believe that no jobs are available or that they would
not qualify, among other reasons. In August, there were roughly 758,000
discouraged workers nationally, compared with 349,000 in November 2007, the
month before the recession officially began.
The bureau also has a broader
category of jobless it calls “marginally attached to the labor force,” which
includes discouraged workers as well as those who have stopped looking because
of other reasons, like school, family responsibilities or health issues. But
economists agree that many of these workers probably would have found a way to
work in a good economy.
There were roughly 2.3 million
people in this group in August, up from 1.4 million in November 2007. If the
unemployment rate were expanded to include all marginally attached workers, it
would have been 11 percent in August.
But even this figure is probably an
undercount of the extent of the jobless problem in this country. There are
about 1.4 million more people who are not in the labor force than when the recession
began. Some of these are retirees, stay-at-home parents, people on disability
and students. But it is also rather likely that many of these people have given
up looking for work at least partly because of economic reasons as well.
Here are four people’s stories:
Rick Alexander: A Builder by Trade,
With Too Much Time
In the worst case, Rick Alexander
figured, he could scrounge up a job at Home Depot.
He was a master carpenter, after
all. He had skills. He had run his own successful home-restoration business for
28 years.
In early 2008, however, he moved to
Florida to take care of his ailing parents, leaving his business in Connecticut
to his daughter.
After helping his parents into an
assisted-living facility, he began applying for jobs. He devoted eight hours a day
to the task, sometimes sending out three or four applications a day.
“It was a full-time job,” he said.
At first, he focused on jobs in
construction, applying to be a site supervisor. He looked for anything within
an hour’s commute of where he was living in Jensen Beach.
But the real estate industry had
fallen off precipitously, bringing building to a near standstill. Mr.
Alexander, 58, began branching out to suppliers, applying at lumberyards and
other wholesalers. Eventually, he expanded his search to Home Depot, Lowe’s and
mom-and-pop hardware stores. Finally, he began applying for “everything under
the sun,” even the overnight shift at convenience stores.
By that summer, he had still
received no callbacks for interviews. He went back to Connecticut for several
weeks to do a renovation for an old client to earn some cash. When he returned
to Florida in August 2008, he tried to start his own business, selling
advertising on video displays mounted in coffee shops and other places.
He networked furiously with local
businesses, but by then the economy had nose-dived. Mr.
(Page 2 of 3)
“There are thousands of people
applying for every job I’m looking at, and potential employers won’t even give
me the courtesy of acknowledging I applied,” he said. “The entirety of that
causes me not to bother. It’s a waste of my time and theirs.”
Skip to next paragraph
Enlarge This Image
Michael Stravato for The New York
Times
“I was just discouraged, fed up and
angry, feeling like my career had betrayed me.” JENNY SALINAS, a manager
turned stay-at-home mother in Houston More Photos >
The Recession’s Impact
Faces, numbers and stories from
behind the downturn.
Multimedia
Slide Show
Faces of the Uncounted Unemployed
He has applied to just two jobs this
year, both several months ago. The unemployment rate in his area, Martin
County, now exceeds 11 percent. After prodding from his companion, Dona
Olinger, he went down to Home Depot a little over a month ago to re-activate
his application there.
His savings are gone. He lives with
Ms. Olinger, who makes $10 an hour as a volunteer coordinator at a food pantry,
Harvest Food and Outreach Center, where they also get groceries every week. It
is her salary that pays their rent.
Mr. Alexander’s parents have since
moved out of the assisted-living facility and back into their home, so he tends
to them most days. He reads Robert Ludlum
novels. He sleeps. To fill his time, he is looking into volunteer work. The
other day, he cut the grass on his small lawn using just a pair of clippers.
Ray Rucker: Feeling Counted Out With
Years Still Left
Ray Rucker came home from a job
interview several months ago, sat down in his living room with his suit still
on and wept.
The meeting with the interviewer had
lasted 10 minutes. The man did not even open a folder in front of him to study
Mr. Rucker’s résumé. It was just “jibber jabber,” Mr. Rucker said later.
Mr. Rucker, who lives in Overland
Park, Kan., had little doubt about what had happened. He is 62 years old and,
as he puts it, “I look 62.”
He lost his job as a facilities
manager for Starbucks in Kansas City and Wichita, Kan., last November, when the
company closed hundreds of stores across the country. He had done similar work
for years for other national restaurant chains and retail outlets.
He landed his first interview within
a month, with a retail chain. He was invited back to talk to the vice president
of operations and to the director of operations. He was also invited to meet
with the company’s chief executive.
But as Mr. Rucker was finishing with
the director of operations, she asked him straight out whether he was retiring
soon. Shocked, Mr. Rucker answered, truthfully, that he planned to work at
least 10 more years.
The meeting with the chief executive
never came. Mr. Rucker said he thinks his interviewer simply did not believe he
planned to continue working.
A month ago, he found a job posting
that seemed tailored for him, a facilities manager for a national restaurant
chain. He sent in his résumé and three days later got called for an interview.
The company official said he was in a hurry to fill the position. But Mr.
Rucker soon learned that this one, too, had slipped from his grasp.
“That’s the one when I kind of threw
in the towel,” he said.
Mr. Rucker said he was done looking.
His wife, who works at a small nonprofit organization, protested, saying there
was more he could do to look.
“You don’t know what I’m going
through,” Mr. Rucker said he told her.
“You send out so much, and you don’t
get responses,” he said. “Then when you get called in, you’re treated like
you’re too old. Why am I doing this?”
So he made an appointment with the
local Social
Security office to begin claiming benefits. He might try to get some
kind of hourly job to help make ends meet. He has mapped out some home
renovation projects he wants to do.
The Social Security checks will not
equal even a third of what he used to make. But he is now preparing for semiretirement.
Jenny Salinas: From a Nonstop Career
to a Focus on the Home
Jenny Salinas never envisioned being
a stay-at-home mother, taking care of the children and keeping house. She was
the one with the high-powered career, the six-figure salary, always jetting off
to Russia or China.
She put her 5-year-old daughter,
Mia, in day care when she was three months old. Mia got so used to her mother
going away she would simply say, “Mommy’s on a trip,” and blow her kisses when
she left.
But after searching unsuccessfully
since January for a job, Mrs. Salinas, 37, said her priorities had shifted. She
is now content to stay home and focus on her family. She and her husband are
even talking about having more children.
“It’s just amazing how it changes
your perspective on what’s important,” she said.
Skip to article
Published: September 7, 2009
(Page 3 of 3)
Mrs. Salinas had been a manager of
corporate marketing and media relations at an oil and gas company in Houston,
where she lives. She was so focused on her career, she said, that she never
noticed her daughter had a lazy eye. Mrs. Salinas’s mother mentioned something
to her, but only after Mrs. Salinas was laid off did she realize that her
daughter needed to see an ophthalmologist.
Skip to next paragraph
Faces, numbers and stories from
behind the downturn.
Multimedia
Slide Show
Faces of the Uncounted Unemployed
“That’s how much I was on my
BlackBerry,” Mrs. Salinas said.
Mrs. Salinas was initially confident
that she would land somewhere quickly. She seemed to be doing well, too,
scoring interview after interview for senior-level corporate marketing
positions. But each of those prospects dried up, usually because of a hiring
freeze or some other obstacle.
So, for the last two months, she has
not looked at all. Partly, she has been busy, selling their old house, moving
into a new one they are renting at half the monthly expense, seeing her
daughter off to kindergarten.
She is helped by the fact that her
husband, a vice president at an advertising agency, still has his job. After
the couple realized that her job search might take time, they decided to cut
back on their spending.
She has in mind a specific set of
companies, but they are all still not hiring. Unwilling to settle for just any
job, she said, she would rather bide her time.
But the process of searching for
work and coming up empty has also left her feeling spent.
“I was just discouraged, fed up and
angry, feeling like my career had betrayed me,” she said.
Her daughter used to be in day care
or preschool from 7 a.m. to 6 p.m., but Mrs. Salinas began dropping her off
later and picking her up earlier. Some days, they skip day care completely and
while away the day together.
Tatjana Jovanovic-Grove: Moving From
Serbia, Scraping By Online
Tatjana Jovanovic-Grove now occupies
her days with arts and crafts projects. She makes a little money selling them
online undefined $10 here, $50 there undefined but mostly it beats the sense of futility that
used to envelop her each day during her quest to find a job.
“I stopped looking because that
feeling of being rejected again and again is hard,” she said. “It’s just like
somebody punching you in the face.”
Ms. Jovanovic-Grove, 41, has
struggled to find work since she immigrated in late 2005 to the United States
from her native Serbia, where she was a biology researcher at a prestigious
research institute in Belgrade.
She had married an American, Doug
Grove, 42, a Wal-Mart mechanic she met over the Internet. The couple initially
lived in Glendale, Ariz., with their three children from previous marriages,
but they moved to Winston-Salem, N.C., in late 2007.
They were attracted by the weather
and the low crime rate. They also thought Ms. Jovanovic-Grove, who earned a
master’s degree in Serbia in environmental protection and zoology, would have
an easier time finding a job in an area rich with universities.
“I was really thinking I would have
no problem,” she said.
The need for her to find work became
more urgent after the couple took on thousands of dollars in additional debt
after they turned their Arizona home over to a bank in lieu of a foreclosure
settlement. They had been unable to sell it amid the state’s collapsing real
estate market.
But aside from a few temporary jobs,
Ms. Jovanovic-Grove has come up empty on everything from research assistant
positions to retail jobs. Meanwhile, her husband’s hours at Wal-Mart, where he
is paid a little more than $14 an hour, have been cut back.
In May, she stopped looking
completely, concluding that the job market was saturated. Winston-Salem’s
unemployment rate exceeded 10 percent.
“You figure out it’s just like when
you toss a piece of meat at a pack of hungry cats,” she said. “I just gave up
because I could not compete.”
Instead, she has turned to making wood
handicrafts and selling them on Etsy.com, an online marketplace. The
small payments she gets often mean she earns less than fifty cents an hour for
her effort. But she reasoned it is better than wasting gas driving around
applying for jobs she believes she cannot get.
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