Outplacement definition

Outplacement services are offered by downsizing organisations to former employees, particularly those made redundant, to help them more easily transition to the job market and move into a new position. Outplacement services are most often paid for by the employer but provided by third parties, and combine both psychological and emotional support with practical guidance and advice for improving employment prospects. Some outplacement firms also offer tangible tools, like an office environment, to help people maintain momentum and motivation when going through the job application process.

In the UK, outplacement services provided by an employer are only tax-free if the employer pays for the services directly. Some companies provide redundant employees with a set amount of time to spend as they will, but this money is not exempt of tax.

One of the frequently-cited advantages of outplacement is the goodwill built up between the outgoing employee and the employee, which may otherwise have been tainted by the unexpected severance of the employment contract.

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