May 27. 2020
“Trends and Opportunities now and after Covid19”
This is the third resume of our serie of webinars regarding the effect of Covid19 on our outplacement industry.
A webinar which was well attended. Which not only shows that the topic has our full interest but also that members benefit from being part of an international network of senior outplacement professionals. Obtaining inside information, exchanging opinions and best practices, not only binds us but also makes us as an industry stronger.
Enjoy reading the resume and hope to see you at one of our next webinars.
Pascal Laurent Favre
President ACF International
Pascal Laurent Favre
performance development partners
This webinar is about “Trends and Opportunities now and after Covid19”, divided into 4 parts.
1. What are the developments in outplacement during and after Covid19?
2. Which experiences did we make?
3. Sharing best practices
The expectation is when the 1st furlough scheme comes to an end (end of June), organisations have to pay for their own staff and will start to look for the people that are not needed anymore and outplacement will be requested.
The second wave will come in September, October, when the 2nd furlough scheme comes to an end in which the government and employing organisation both will split the support regarding furlough.
Covid 19 has a large impact on our business. A lot of our broader work (coaching, mentoring and leadership development work) came to a hold. People are saving money and dealing with uncertain times. Many individuals put coaching and L&D work on hold. We are offering most of the time the virtual delivery model. Social distancing means people do not come into the office like we used to. We are reducing our office portfolio as less office space is needed. We are encouraging clients to make use of virtual outplacement by using zoom for face to face meetings/coaching.
All together: Difficult times but significant opportunities ahead. We are well positioned to address them.
Pascal Laurent Favre
The lock down is being loosened. People are going more back to the office. Shops are open again. We are going back to normality. As long as the government is paying there will be little or less lay offs. The moment the government will stop paying (2nd half of the year), we expect a large demand for our outplacement services.
We are seeing some signs that companies are preparing to look at major restructurings with an important number of people being laid off. The labour market is OK. People are still being able to find a job. However one has to work harder to present oneself as it is more difficult to get an interview.
We have experienced a slight reduction in our activities due to the preoccupation of HR managers dealing with the effect of Covid19 on their activities (home office etc). This has come to a more less an end. Group programs are not possible as groups may are restricted to a maximum of five persons. We work with Zoom, Skype and other media. Some people still prefer to come to our offices, but this is a minority. Programs offered, both face to face and virtual, are accepted.
We had a very low unemployment rate these last couple of months, but this will grow. We expect that the job market for some industries will become more difficult. For instance the banking industry. When they are all laying off, it is not a company but a whole industry.
Candidates can not stay in the same industry but have to look for a complete new sector. The next challenge for us is not getting the mandate, but getting the results.
Most of the companies in Germany are busy in fulfilling all requirements in house.
We expect business will pick up by the last quarter of the year. Outplacement is very important at the moment. It is hard to find a new job. Outplacement is the thing at the moment.
Mühlenhoff & Partner
Our concern is a possible 2nd Covid19 wave which would mean extra lay offs and shut downs.
Companies are now trying to reduce temporary lay offs.
– an update of the German market –
- The actual statistics shows that over 12 Mio applications for Short-Time Work Allowance, have been made. How many people will actually take the allowance? (2009: 3,3 Mio applied and 1,2 million took the Short time allowance). The industry is busy with the requirements on the application modus.
- Unemployment rate increased from 5 to 5,8 % (abs. 2.65 Mio). This is not a bad figure in total. It could be the effect on the Short-Time Work Allowance instrument. At the same time the demand of qualified Specialists decreased by 20% in March and April by 130 K people.
- We see a severe impact primary in the food industry and special IT service and automotive industry and secondary in the Steel, Machinery, Fine Chemicals and Finance / Insurance sector.
- Restructuring needs were already overdue last year. As for Q1, we had to deal with a changing market behavior and technology / Digital Transformations which makes it complicated to predict what will be the total effect.
ACTUAL PUBLIC LABOUR MARKET MEASURES
- All Covid19 „affected“ Companies can apply for the Short-time Work Allowance. Which will grant employees from 60 up to 87 % of their net income for 12 months)- 100% gvt, without any administration. The application can be done in a retrospective mode (applying f.i. in May for the month April).
- Transfer companies (will require a 3 side separation agreements and guarantee up to 87 % of the net income) (87% gvt) for avg. 12 month. The company can do an increase themselves up to 100% if they would like to do so. This has an impact on the labour market.
- Unemployment Benefits <24+3 months > 68 % of net income(100% gvt)
- A Combination of these instruments is attractive for 58 + age to reach retirement age w/o big financial disadvantages.
TRANSFER COMPANY – TRANSFER GESELLSCHAFT
A tool from the government, which can be applied for by companies where a restructuring has already been planned. Effected employees can stay on board but in a transfer company for approx 12 months (80% net income), depending on the general terms.
What is a Transfer Gesellschaft in general?
The purpose of transfer companies is to provide employees of a company who are at particular risk of unemployment with a maximum of twelve months’ employment. The sole purpose of them is to put the supervised employees back into new employment relationships as quickly as possible. Switching to a transfer company is voluntary for those at risk of unemployment. Transfer companies are installed using a legally defined procedure in close cooperation with the employment agency.
The establishment of a transfer company is based on an agreement between employee and employer representations in a company, and “information about changes in operations”. This agreement usually takes the form of an addition to the social plan or a specially adopted transfer social plan, which provides employees with specific placement and qualification offers.
Usually a “third party” is commissioned to run the transfer company and to employ unemployed people in a transfer company. On the basis of a contract, the company and the organization commissioned with the transfer company agree on the cooperation in the transfer company. The company concludes a termination agreement with the respective employee and at the same time this employee concludes a temporary employment contract with the transfer company (tripartite contract).
Current new situation
What companies now do is combining 3 tools: the Short Term Allowance, the transfer company allowance and the unemployment benefits (24 months with an extension of 3 months). It has a certain barrier (Euro 6.200). The whole package covers 40 to 50 months. Companies, who are low in cash at the moment, are using this package to offer a early retirement to older people offering . This is a phenomena which we have not seen before.
The interesting current situation (Covid19) is, that after the 12 months in the Transfer Gesellschaft the employee still has the possibility to apply for the unemployment benefit in an unrestricted way, if he has not been able to find a job meanwhile. The outplacement services are being done by an outplacement company, working for the unemployment office. The outplacement company does a restricted program f.i. profiling, coaching etc. based on what has been agreed in the contract between the Transfer Gesellschaft and the employer.
OBSERVATIONS AND MARKET OUTLOOK
- March/April: High Usage of Short-Time Work Allowance Application (>12 Million).The Market is involved to implement application process and fulfill requirements.
- May-July: restructuring plans will be in execution or in progress (involuntary approx. 80%). Early Retirement Programs to target 55+ employees. These employees are not that keen on having a new job.
- Positive: Individual, long term Outplacement Services are expected to increase instead of higher severance payments
- The Labour Market is temporarily disturbed due to „Short Time Working Allowances“
- Many Companies will need to announce „restructuring“ and objectives with effect in FY 2021.
- First Implementations (restructuring) will be taken likely in Q3/Q4 rather than in Q2
- Needs of our clients will be more clear after Q2/Q3 – remote Coaching (Digital) is increasingly demanded / required
- Is the economy in the branche in a V or a U shape?
- Is a steep recovery to be expected or will there be areas who have a significant problem and are not likely to recover quickly, like the travel industry?
Bertschat & Hundertmark
1. Which vitual services are on the market?
2. Are they sustainable?
3. Will these services always have a permanent place in our consulting portfolio?
We are working since 1,5 years with Microsoft dynamic which also includes Teams and made it for us relatively easy to switch to our clients to virtual. Our workshops have been moved to Zoom and Teams. Only a few of our HR customers have requested for service in person. As for our staff, we have been keeping in close contact with channels and chats, to keep the team motivated.
How to keep your place in the market?
Our brand is the one to one personal connection. With that piece taken away, how do we shift our message from that to being virtual and still keep our place in the market? We shifted our message slightly. We market now that we really invest in our coaches and people. Although virtual, you still get the senior executive coaching service. For us virtual is second best.
Service Delivery Manager
We have managed to switch our services to virtual. All of our coaches seemed to have switched quite easily to virtual tools (zoom/Skype). A couple of programs were group size. We have found working solutions and reduced the size of the groups instead of 12 persons in a room now 6 persons on a zoom call.
Face to face is still preferred. We are developing a chat function for the career management platform. Here people can login and chat to a coach if they feel the need to be connected to someone.
Differentiation in our services
We switched from virtual and distant in a couple of weeks. We are evolving to a blended solution. We have to keep in mind that the work force in all countries has now been trained to virtual/distant part of working.
Diversify our strategy
Work life after Covid19 will be different. People want to work more from a distance and companies and people are now looking for a new combination 80/20%, 60/30%. As an industry we have to diversify our strategy. We need to go for a differentiation in our service offering from outplacement to leadership development, talent development, strategy.
senior advisor to the board
Pascal Laurent Favre
Flexibility and Blending
The population density in Switzerland is high and you would not expect distance coaching. However the opposite is true. We have two kind of candidates. Candidates from international companies, expats who are accustomed to digitalization. The other category are the local candidate, living outside the city. They prefer distance coaching because of the flexibility. It is easier to make a virtual appointment which not involves travelling. The people of the international companies, would still like to have the face to face meetings as well.
By the end of the year we will offer blended programs consisting of face to face meetings and virtual meetings. We have to reinvent the socialization of other events (40% face to face and 60 % virtual).
Distance coaching versus virtual program
We make a difference between distance coaching and the virtual program. The virtual program for us is with a robot. Distance coaching is still with a qualified coach and experienced manager, who helps you with your situation. In Switzerland we do make this difference.
NEW WAYS OF PERFORMANCE
1. Will the portfolio evolves to employability?
2. Do we recognize new opportunities and new offerings?
We have assessment, leadership coaching, change management. Is there a potential in what we are doing? Will the portfolio moves towards employability? What does employability mean to me, to us?
Ongoing career management is partly career balance and partly career planning. In France, for instance, it is common use to make a career planning every five years and the government will pay for this. The same thing applies for Geneva. These are regular services which are in house with the client and you can bind the client to yourself. Are we developing in this direction and is this a viable option?
NEW OPPORTUNITIES AND OFFERINGS
Do we have to start a new way of thinking? Our model is depending on the employer paying. This model could also be a model that the employee is paying. There are possibilities in the market. The individualization going with the digitalisation is a point to reflect on.
The employer today thinks that the employee should look after himself. Especially as employment is becoming shorter and shorter. Is the labour market changing, and are we developing towards work on a project basis? If that is the case we, as an industry, have to adapt.
Co founder & Senior Advisor
Work life cycle
We are thinking of a work life cycle. With the outplacement methodology/psychology, the know how round outplacement can be used in the beginning, middle, changes, at the end of your work life cycle. This is definitely a way to go.
When the employee has to take more responsibility, we come into the topic of self leadership. This is embedded in outplacement and could easily be a stand alone project. Could this is become a b to c business?
We could also join forces with an insurance company and create a career insurance for employees that they can utilize in the different stages and cross roads that they have in their careers.
Career resilience is part of the agenda
People struggle and are not used to having to find work quickly. They are used to be employed for a long time by one employer. People do need to take responsibility for their careers. Back in the ’70/’80 career management was something that the employer directed. Career management in the ’90 , we saw that every men had to take care of themselves. The last 20 years we see a vertical position.
Careers have to work for individuals and organisations. Employers want different things from employees and vice versa. How can employees develop their career against the changing backdrop of employers demands? These are challenging demands for our industry.