Outplacement Services Market Intelligence

Industry Outlook & Drivers

Market Overview of Outplacement Services

The outplacement industry is growing exponentially in the past two years, increase in layoffs is the major reason, but organizational shift or reorganization is also driving the outplacement services across geographies.

Key Drivers for the Growth in Outplacement Industry

• Increase in layoffs, due to changes in political reforms across the US
• Organizations restructuring their workforce strategies across geographies
• Flexible workforce is an emerging trend for revamping the organizational structure and retain employees
• Increase in virtual programs for outplacement service supports buyer to maintain confidentiality

Key Buyer: Supplier Insights on the Upcoming Global Revenue Growth

• The outplacement industry has become a highly consolidated market with staffing companies, such as Adecco acquiring LHH and Manpower acquiring Right Management, sharing 45 percent of the market share between two of them
• In response to this, the US outplacement providers, RiseSmart, has had an alliance with Europe's regional provider BPI, capturing 6–8 percent of the market share
• In Europe and the US, Challenger, Gray, and Christmas are among the other suppliers, with 3–5 percent of the market share providing outplacement services predominantly to the high level employees

Sourcing Models

Types of Sourcing Strategy

Global approach

• Global firms engage with a single vendor operating with internal HR team for outplacement and redeployment services
• Buyer can engage with a global vendor across geography or can engage with two or more outplacement vendors in EMEA, the US, and APAC
• Global sourcing strategy is widely adopted model
• Companies have attained volume discount rates of 2–5 percent by adopting the global vendor

Bundling of Services

• Buyers can engage with a staffing vendor and manage outplacement activities through the bundling of services
• Bundling of services have lower adoption rate compared to global sourcing strategy
• Companies who have managed to structure their procurement and HR Team have attained volume discounts of 18–22 percent by bundling outplacement with staffing services

Pricing Models

Fixed fee/employee is a traditional model followed by many companies. The adoption of the sequential billing model has moved from 25 percent to 30 percent among the large-sized companies in the past few years, as new technology advancements provided by outplacement service providers have helped the buyers to evaluate them continuously through various KPIs.