Europe has patchwork approach to outplacement

In the City of London, outplacement, or "transition advice", is offered as a matter of course. Financial services firms are sold on its benefits.

By helping departing employees cope with redundancy and find new jobs, they hope to preserve their reputation as employers. In turn, this is intended to make it easier to attract staff whenever headcount is next increased.

In continental Europe, such considerations rarely result in outplacement. Employees on the Continent have traditionally received generous financial assistance, but little more.

Nowhere is this more the case than in Italy. Because Italian redundancy packages comprise several years' income in employment, helping employees to find new jobs through outplacement is deemed unnecessary.

Roberto Manzoni, managing director of Corium, one of Italy's outplacement providers, says: "Outplacement is very rare in Italy. When you have a salary for three months after redundancy you need immediate help. But when you have a salary for three years, you don't care about anything."

As a result, Manzoni says that most of his work is with multinationals operating in the Italian market, not with Italian firms.

Corium has worked with a few Italian bankers, but Manzoni says they were mostly Italian nationals coming back home after being made redundant in London.

Outplacement is similarly uncommon in France.

Yves Cahen, a consultant at the French outplacement provider Garon Bon Valot, says no more than 5% of managers in France are offered outplacement following redundancy. Although Garon Bon Valot works with French banks, Cahen says their use of its services is very far from systemic.

Continental labour laws have done much to suppress demand for outplacement.

Otto Genee, managing director of RightCoutts in Amsterdam, says Dutch banks usually provide outplacement in-house instead of using external providers.

As Dutch employees must be informed of redundancy four months prior to the event, there is plenty of time for the provision of in-house assistance.

Labour law has played an equally restrictive role in Germany. Herbert Mühlenhoff, managing partner of the German outplacement provider Mühlenhoff and Partners, says onerous contractual obligations mean that offering redundant employees extra help has traditionally been considered unnecessary.

Nevertheless, Mühlenhoff says Germany's use of outplacement is spreading slowly. Similarly, Genee says Dutch business may not be booming, but it is growing. French outplacement provider Altedia adds to the good news: turnover for first half of 2002 was up 13.2% on a like-for-like basis versus the first half of 2001.

As the European market grows, international organisations are strengthening their hold.

The French firm Garon Bon Valot is part of RightCoutts, the Nasdaq-listed international outplacement provider based in Philadelphia.

Together with Lee Hecht Harrison, which is owned by Adecco, and DBM, which is owned by the Thomson Corporation, RightCoutts is one of the three international outplacement providers in the European market.

Stuart Walkley, international business director at RightCoutts, estimates that 55% of the European market is in the hands of the international providers.

In response to the international challenge, local firms have united in a pan-European alliance: Corium in Italy, Mühlenhoff and Partners in Germany, and Penna Meridian in London, are among more than 30 members of Arbora Global Career Partners.

Francis Cook, head of international affairs at Penna Meridian in London, says international scope is imperative: "The financial markets are globally structured and outplacement must be as well. Individuals need to have support anywhere in the world."

Competition between European outplacement providers is likely to intensify in future.

Customers are looking to cut costs: as the market grows, European firms complain that the contract length has been cut. As a result, soaring redundancies are not fully translating into demand for outplacement services.

In Germany, Herbert Mühlenhoff says the number of candidates is rising faster than revenues.

Eva Von Rohr at Von Rohr Associates, an outplacement provider in Geneva, says: "Outplacement in Switzerland is in the process of becoming a commodity."

Von Rohr says that the golden days when clients were offered unlimited outplacement until they found a new position are over. Instead, courses are increasingly restricted to three months.

Matters are made worse by competition on new fronts. Mühlenhoff says German headhunters are diversifying into outplacement to escape the shrinking executive search sector.

Von Rohr says that in Switzerland, individuals are opting for training instead of outplacement. She says this is especially the case in financial services, where the lack of jobs makes it worthwhile to train for something else instead of looking for jobs in the same sector.

Even if clients are won, the conundrum of what to do next seems to be vexing outplacement providers Europe-wide - how do you help people find a new job when there are no new jobs to be had?

Deitmar Salje, managing consultant at BPI Management und Personalberätung in Frankfurt, is one of those wracking his brains for a solution.

He says times have changed: "It used just to be individuals: we had a couple of bankers a year and it was easy to place them in new positions. Suddenly, the number is much higher and there are no jobs for them to go to."

The implication is that with the chances of finding a new job reduced, outplacement may do less to mitigate the unpleasantness of redundancy.

More than labour laws, it is this that may hinder the European spread of outplacement in future.