Outplacing the Dehired

The job that executives have always hated most is firing fellow executives. It is a task that top managements increasingly face as the business downturn and profit squeeze make superfluous executives an insupportable luxury. In July, unemployment among professional and managerial employees rose to 394,000--up 74% from a year earlier. Now, though, a method has been developed to take some of the sting and embarrassment out of executive firing. Instead of simply bouncing a subordinate, the boss can send him to a firm that specializes in helping unwanted executives to find new jobs. The practitioners have even coined a euphemistic description for the process: "outplacing" executives who have been "dehired."

Rebuilding Confidence. The center of this new profession is Manhattan, where four firms within the past 1 1/2 years have concentrated on working with the dehired. THinc. Career Planning Corp. deals exclusively in outplacement; David North & Associates, Gough Management Services, and Career Directions Corp. also practice conventional executive recruiting. Their fees, paid by the company that fires the client, generally are 10% of the man's last annual salary, with a $2,000 minimum.

All of them help the dehired executive to size up the job market, select companies that might use his services, prepare resumes and develop contacts. THinc. and North also provide extensive personal counseling aimed at getting the executive to assess realistically his strengths and weaknesses and, most important, to rebuild his confidence.

Such services are necessary, the placement people claim, because their clients often arrive bewildered and defensive. Nearly all are men of genuine ability who in the past have made important contributions to the companies that fired them. Many of these executives are squeezed out because of mergers, reorganizations or disagreements with their superiors over corporate policy rather than because of incompetence. Nevertheless, they often find the firing a shattering blow and think that their careers are ended.

Some turn snappish. David North tells of one client, a former financial vice president he calls Tom, who got the ax because he began disagreeing too frequently with the president on how the business should be run. The president, who had been a close friend, referred Tom to North. At first Tom hesitated to accept any help. "Let's be realistic," North told him. "You got fired, and he [the president] is willing to pay for my program. Let the bastard pay." Tom agreed, but initially he objected to undergoing psychological testing. "I suppose you're going to tell me how good my boss was to me," he argued. Tom's attitude began to change when the psychologist, playing job interviewer, sharply asked how a new employer could be sure that Tom was able to run a cost-cutting program; describing the cost cuts that he had put into effect at his old company, Tom began talking confidently rather than querulously. Eventually, he found a job at a higher salary than the nearly $60,000 a year he had drawn from the company that fired him.

Saving Money Too. The outplacement firms have their critics. Some industrial psychologists feel that an executive who has been fired needs the determination to reassess his abilities and find a job on his own. Thomas Hubbard, president of THinc., raises the question of conflict of interest on the part of the companies that do both outplacement and conventional executive recruiting. "No one knows," he says, "when one company's $45,000-a-year dehiree will be touted by the firm to another company as their 'new $50,000 hotshot.' "Officials of the companies involved reply that they keep the two parts of their business rigidly separate. Dehirees are counseled not to hide the fact that they have been fired; the placement people and the firing companies work out a suitable explanation for a new employer who inquires why. One standard line is that the executive's job was eliminated by a reorganization, and the company, despite much effort, could not find another appropriate place for him.

The outplacement specialists see nothing but growth ahead for their business. The increasingly competitive economic climate, they insist, will lead more and more businesses to prune their executive ranks, while expanding firms will continue to seek experienced men. Besides, the outplacers do more than salve the conscience of the boss who sends a dismissed subordinate to them; they also may save him money. Hubbard cites the case of a company that offered to continue the $40,000 salary of a fired executive for a year while he looked for another job. After going through THinc.'s program, the executive quickly caught on with a new company. Even after paying THinc.'s $4,000 fee, the company that fired him saved more than $30,000.

This file is automatically generated by a robot program, so reader's discretion is required.