The Effects of Poorly Executed Termination
The process of termination is not simple. If done incorrectly your business can face severe consequences. A report by the Havard Business Review found that downsizing 1% of your workforce can lead to a 31% increase in voluntary turnover the following year. The remaining employees also saw lower commitment, job satisfaction, and performance. This shows how a simple structural change can cause a brain drain and transform the work environment of your company for the worse.
Your employer brand will also take a hard hit as the public perception of your company will be negative from the destructive divorce between you and your employees. A company’s brand can take years to build but one wrong step can send it crumbling down. Glassdoor reported that 84% of job seekers said that a company’s reputation plays an important role when applying for jobs. If your company can no longer retain and attract good talent, the quality of service you can provide your clients will drop significantly.
LinkedIn carried out a study that showed employers with weak brands had 28% higher turnover rates. Turnovers can cost employers 33% of the employee’s annual salary and the cost of hiring & training new employees will add extra financial burden. To reduce these costs, it is important that your reputation as a good company is strong.
As we are currently in a global recession, it is inevitable redundancies will occur in some companies. When termination is out of your business’ control, tarnishing your company’s reputation with poor handling of redundancies would be foolish. Bad termination management could lead to lawsuits from former employees and have severe ramifications on your company image and finances. The impacts of litigation can linger long after the situation has been resolved.
The effects of poor termination cannot be understated. With many companies looking to restructure their business in economic downturns, it is important to protect your business and ensure a good termination process.
Mid-Year Job Market Report 2020: |
▼ Information Technology (IT) |
▼ Administration & Human Resources |
▼ Banking, Finance & Accounting |
▼ Sales & Marketing |
▼ Sourcing, Supply Chain & Manufacturing |
What is Outplacement and How Does it Stop the Potential Impacts of Bad Termination?
Outplacement is a service that helps terminated employees’ transition to new opportunities. It provides assistance to the employee by offering career management advice, developing CVs, connecting them to new jobs, and offering relevant training.
You may be wondering how helping terminated employees can benefit your business, or why you should continue to invest in people no longer part of your company? However, if you look deeper into the situation you will understand that in the long-term your enterprise will benefit from using outplacement.
How Outplacement Helps Your Business
Protects Your Employer Brand
As mentioned earlier your brand plays an important role in your company’s ability to attract and retain talent. Outplacement is an excellent way for corporations looking to take a responsible approach and maintain their reputation as a good place to work. By connecting released employees with new opportunities, it demonstrates care and shows the business world you really value employees as you are looking after them even though they are no longer part of the company.
Reduces Chances of Lawsuits
Corporations using an outplacement service saw a 12% decrease in redundancy lawsuits (Havard Business Review). In offering genuine help to employees in transitioning departing staff into opportunities bitterness towards your business will change to appreciation. Outplacement will help them understand that the termination was solely a business decision and nothing personal toward them.
Maintains Business Morale
The remaining internal staff will feel uneasy seeing coworkers being terminated poorly, ultimately hurting their enthusiasm and commitment to the enterprise. Going the extra mile by providing outplacement in their severance package will give off a positive vibe for all staff. Research from the Aberdeen Group showed that companies that offered outplacement programmes had more highly-engaged employees compared to those that did not.
Professional Consultancy Advice Through the Process
The whole termination process can have companies lost and making the wrong moves. Good outplacement service providers will advise you through the whole process and act as your business’ personal consultant.
Let the professionals plan out the process. As a strategic partner, a step-by-step guide will be tailored to your company on how you should carry out a termination. Advertise your corporation as a responsible one that cherishes employees.

3 Key Takeaways
A Bad Termination Strategy Will Hurt Your Business in the long-term
When making structural changes you have to ensure your termination process doesn’t hurt you in the long-term. Poor management of the situation will wreck your employer brand, impact your employee’s morale, and increase the risk of litigation.
Outplacement Benefits Your Business in the Long-term
Businesses should look at the long-term benefits of outplacement before dismissing the service. The small investment you make in an outplacement programme can protect your business from the possible financial and reputational damage of poorly executed terminations.
Don’t Let Company Morale Drop
Protect your employer brand and keep internal morale high by transitioning departing employees to future opportunities with outplacement. If you are making plans to restructure your workforce, learn more about how Links International’s professional outplacement programme can benefit your business!
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Links International is an industry leader in innovative HR outsourcing with services such as payroll outsourcing, visa application, PEO/EOR Secondment, outplacement, recruitment and more! Contact us for more information on how we can help leverage your HR function.


