In today’s podcast we will build on a recent theme of my blog posts: career management and career transition.
In part one, we will explore outplacement services – what it is, how does it work, who pays for it, why it is so important for executives who have been laid off or terminated, and how to request this important benefit.
In Part 2, I will share a story about a Chief Operating Officer who, in the summer of 2015, learned that his health system no longer required his services.
I am in the career management business – both as an executive search consultant and as a career coach. I have always assumed that executives understood what outplacement or transition coaching is, how the program works, who pays the tab for the service and why it is such an important benefit for executives who find themselves back in the job market.
The surprising reality is how many executives don’t understand what it is or why it is important.
So before we revisit the story of the Chief Operating Officer that I wrote about in 2015 , let’s talk about outplacement or transition coaching – what it is, what it is not, who pays and why an executive should insist that it be included in their severance package. I believe it is worth fighting for.
First, what is it? Outplacement is a program designed to assist a departing executive be prepared to re-enter the job market and to expedite the time it takes to find their next better position. It is all about helping an executive confirm, or redefine, their career value brand which is the foundation of why someone would want to hire them. It begins with understanding their value, continues with the development of a resume, and incorporates insights on developing a personal career brand, as well as the power of social media, messaging for key issues, preparing for interviews, prepping the references and finally, closing the deal.
Now, what outplacement is not. Outplacement is NOT a process where consultants find the out-of-work executive a new job. The only person who can find the new job is that executive. Outplacement consultants help the executive prepare and provide support for their future search, it is not a placement service. The executive must put in the time and effort.
Who pays? Typically the former employer funds the service. The cost to the organization is anywhere between $1,500 to $15,000 or more, depending on the size of the business and the departing executive’s salary. Companies are willing to pay more for the outplacement of their top executives. The larger systems typically have “national” contracts with the brand-name companies like Challenger Day & Christmas, Drake Beam Morin and others. Then there are a host of boutique firms that are industry specific as is the case with healthcare. We are one of those firms along with Wiederhold & Associates and others. Some of these firms charge the candidate directly, and they advertise services beginning at $850 which is a bare bones approach, probably not much more than a resume review service.
Some firms offer memberships to their premium networking group which is another way to sell services and supposedly enhance the value of the experience.
We advise executives to avoid the temptation to pay a firm a $25,000 to $50,000 fee with the promise that they can find you a job because they have a deep pool of corporate connections or that they know about openings that no one else knows about. As my Grandmother Jackson was fond of saying, “If it sounds too good to be true, it probably is.”
In our case, we focus on providing our executive clients a portfolio of skills that will allow one to take control of his or her career so that they will never need outplacement services again.
Why do I need outplacement? In my extensive experience in executive search and career coaching, I can tell you that some of the brightest CEOs I have ever met all typically have one weakness: they are not experts in finding a job.
Most lack the experience because, for the most part, they have been very successful and have limited exposure to the fun and games of being a candidate in an executive search.
Even for those executives who have made three, four or five transitions, they, too, can benefit from outplacement because today’s job market is changing so dramatically and so quickly. Over the last three years we have seen extraordinary changes in terms of what the clients want to see from their candidates, and over the last year, we have seen some well-known executives not be selected for senior leadership searches because they did not see, or respond effectively to, these significant changes in the job market.
The meeting with his boss was a shocker.
What the 55-year-old Chief Operating Officer thought was a routine weekly update meeting with the Chief Executive Officer would be his last with the company.
He was informed “the organization wanted to go in another leadership direction.” The System was facing new regulatory, reimbursement and competitive pressures. They were making money but the CEO knew they would have to do much better to survive. Year over year, earnings were flat. Expenses, productivity and satisfaction scores had not changed that much.
They would provide a severance package including benefits, a year’s salary and outplacement assistance. They would also provide a supportive and official reference from the Vice President of Human Resources.
This executive should not have been surprised. His boss had been talking more and more about how everyone needed to step up their performance, that the organization could not tolerate just “best effort.”
They needed people who understood the new realities of healthcare delivery.
That aside, as he left the building with his white banker’s boxes filled with personal belongings, he thought that all would be OK. After all, he had a year’s salary, benefits, plus four months of accrued vacation time. Following a break for some down time for rest and relaxation, our deposed executive believed that he would quickly land a job with a bigger system making more money and move on with the last 10 years of his career.
He initially turned down the transition coaching package, requesting additional cash instead. The Vice President of HR strongly discouraged him but he was confident that spending money on a transition coach would be just a waste of money.
Possibly, but there are no guarantees, especially for executives moving into the final phase of their careers. Fortunately he gave in and agreed to see the outplacement counselor.
For our departing COO, 12 months to find a new position sounded like a long time, and, for the moment, that helped make his visibly shaken spouse take the news a little better. That and his repeated assurances that he had this. He knew what to do.
Let’s dig in to get additional context on his situation, and what contributed to his career transition challenges:
- His resume was not current. The last time he even looked at the document was 12 years ago when he joined the system. He did not keep a career journal so he would have to reconstruct the metrics of his performance. He would have to rely on the VP of HR to help him get that information.
- He had never invested any time in networking. When asked how many relevant professional contacts he had who he might be able to network with for a new position, the COO listed 25 to 30, a devastatingly small number by any standard.
- He had no contacts in the executive recruitment industry. He never took their calls. Why should he, he had a good job that paid well? His plan had been to finish his career and retire with his now former organization.
- He did not have a profile on LinkedIn and he had no clue how to build one. That was just a social platform for kids, right?
- When the outplacement counselor did a career intelligence assessment, she concluded this guy was at least 10 years behind the times, a serious deficit.
In his first outplacement meeting our now unemployed executive became increasingly frustrated with the advice he was provided. To say there was major league pushback would be an understatement. At one point, in a flash of anger, he barked, “I have been managing my career for more than 25 years and doing a pretty good job of it. I am not going to change now.”
That statement was the career suicide equivalent of a pulmonary patient with diabetes arrogantly ignoring his physician’s pleas to stop smoking or he would be dead within two years, all the while puffing on a cigarette and eating a box of chocolates.
In the case of our unprepared executive, the chances of landing an equivalent job in another city within the year were poor. Of course there is always luck, but research is fairly conclusive on the subject: luck is a very ineffective career management strategy.
In this case the candidate’s career management “to do” list was not going to provide much time for his wife’s long list of projects she wanted done around the house or her desire for that trip to Europe they had always talked about. Her husband was years behind the job search curve. Those priorities would have to be postponed.
The outplacement counselor asked me to speak to her client in hopes that a career coach who was also an executive recruiter could help him realize that the job search market had undergone a radical change. Here is the plan of attack I suggested.
- It was too late to build relationships with recruiters for this transition. Building relationships with recruiters who can produce real value in this type of situation takes years of give and take – taking recruiter calls and giving by referring candidates or alerting them to possible new business. Not taking calls from any recruiter was a bad choice.
- He needed to master LinkedIn. Now! No arguments. This is where internal corporate recruiters, those search people who actually handle the majority of assignments at the management and executive levels, live. Being a well kept secret on LinkedIn is another very bad mistake, especially if there is a sense of urgency to finding a new job as quickly as possible.
- He needed to actively build a LinkedIn network by targeting potential employers – those organizations he would like to work for – and then connecting with people who worked there or professional contacts who knew people who work there. This is called strategic networking.
- He needed to establish a brand as a competent thought leader on LinkedIn by posting interesting, relevant and appropriate content as well as commenting on key industry trends. By appropriate I mean no snarky political broadsides. What you think is a mainstream political view is, more than likely, not shared by all potential employers.
- He needed to establish a routine for his new full-time business: finding a job. Monday through Friday, get up, dress and go to the “office”, probably in his home. And then:
- Read industry news briefings and select some excellent content to post. Check to be sure someone has not beaten you to the punch by posting it first. You are not going to be unique if you are the third person who has posted the same article.
- Look for new contacts to help you connect with your targeted companies. Schedule coffees with other industry personnel who routinely track market developments – sales representatives, industry consultants and even colleagues at competing institutions.
- Follow up with those executives and recruiters who received an introductory email with your resume from your outplacement counselor. When they say they do not have a job, ask for other names in their networks who they think would enjoy connecting with you. Do not be rude, but push a bit to get new potential contacts. Remember, you have been derelict in this important part of the career management process. You have a lot of ground to make up. As you expand your network, think of this in your mind as an epidemiology flow chart. Map the contact relationships.
In the end, between his outplacement counselor and I, we encouraged, nudged and shoved the executive into spending the time he needed to invest in his career to get back into the game.
So, how did it work out?
What our former COO did not know at the time he left his former company, is that it would take him almost 20 months to land a new position. He accepted an offer from a smaller organization outside his targeted geographic zone. To win the offer, he had to compete against more than 50 other “very qualified” candidates, he was told.
The salary, incentives and benefits package were all about the same, not the big bump that he was hoping for, but at least he was able to stop draining his retirement plan to cover his living expenses. He would now be able to build up his assets again and once more he will be able to have an estate plan with something worth giving (click for more information on estate planning).
The last time we spoke he confessed that he was very happy, that he believed he was profiting from his experiences with his former employer. He and his wife settled into the community and were enjoying making new friends and benefitting from many leisure time opportunities.
Just as he was about to hang up, he said this: “I know I was a little bit of jerk when I began to realize all of my serious deficits in career management. I can tell you this, I will never make those mistakes again. I devote time every week to focusing on my brand and developing my professional network.”
I think this is going to work out for a long time but in healthcare today, you can never tell.