Business Brisk in Outplacement as Layoffs Increase
Mark Alch, an Irvine employment consultant, is getting more last-minute notices about layoffs at his client companies these days. One recent Wednesday, he received a fax informing him that an Orange County hospital planned to lay off 10 workers the following Monday.
He quickly asked three of his outplacement job counselors to clear their calendars and prepare for the task of soothing angry workers and helping them find new jobs.
As the economy continues to weaken and corporate layoffs rise, companies that provide employee counseling and job search services are benefiting from brisker business. Alch, a senior vice president at the Irvine office of Drake Beam Morin Inc., a New York-based outplacement consulting firm, said he has 25% more executives and at least 75% more lower-level people using his services than last year.
The increase is making for busier days. “We very rarely get a call saying, ‘By the way, in three months we’re going to do some downsizing,’ ” Alch said.
His office is one of about 30 outplacement firms in the Southland feeling the growing joblessness in the aerospace and defense, electronics, financial services and other industries.
Bill Ellermeyer, senior vice president of New York-based Lee Hecht Harrison Inc.’s office in Irvine, said his firm has seen an increasing number of corporate layoffs in 1990 and more senior management job cuts than last year. Although senior managers are finding jobs, it is taking longer: an average of 6.5 months compared to 5.8 months a year ago, the company says.
Outplacement firms report that corporate cutbacks began to rise in the fall of 1989 and have accelerated in 1990. Lee Hecht’s office in New York predicts that major layoffs will be widespread through at least next summer.
“Nearly all industries are downsizing,” said Robert Hecht, the company’s co-chairman. “Even blue-chip companies and firms that are not in trouble are revamping operations and finances.”
Robert McCarthy, president of a Century City outplacement firm, said some senior managers laid off from large corporations are settling for jobs with smaller firms or starting new careers. One former manager of a solar products company, for example, decided to open a video store in Ventura County.
Some big corporations have hired outplacement firms to prepare their employees for future job cuts.
Alch, of Drake Beam, was hired by General Dynamics, the giant defense contractor, to help plan for the consolidation of its Pomona and Rancho Cucamonga plants. General Dynamics has said it will lay off 1,500 to 2,000 people in the Los Angeles area by the end of 1991.
The project presents some unusual problems for Alch because General Dynamics notified employees of its layoff plan so far in advance. “Your best performers are the people who will bolt first during a downsizing, and the people who remain will be jittery,” he said. “It’s up to us to be on site, talking to people, measuring their mentality, to keep up internal morale.”
Alch worked as a Drake Beam outplacement counselor before he was named to head the Irvine office in 1985. As a counselor, he organized group workshops in which recently laid-off people could vent their frustrations and learn job-hunting skills, such as how to prepare a resume.
He said hourly workers are often better prepared to ride out a dip in the economy than salaried employees. They are less surprised by misfortune than are senior managers, he said, and many have small businesses or investments on the side to carry them through.
The six counselors in Alch’s office stress creativity now when they advise people where to look for work. Whether out of spite or necessity, many people think first about looking for jobs with competitors of the firm that fired them.
But Alch warns against that strategy. “It’s easy for competitors to squeeze that individual like an orange and throw away the rind,” he said.
The time-honored strategy of finding a job through “people you know” in the same business works sometimes. But if your industry’s hurting and no one’s hiring, that won’t get you very far, Alch said. His suggestion: Look to your former company’s suppliers and customers; if you worked for a chemical manufacturer, for example, try contacting the company that used those chemicals to make its products.
Alch advises people to use their expertise in a different way within the same industry. Five years ago, when the petrochemical industry was laying people off, many laid-off managers started consulting businesses. Some found work advising their former employers.
“You can’t take out a whole layer of senior people and expect (the company) to run,” Alch said. “You have to bring them back somehow.”
Drake Beam has programs to help people start a consulting practice, plan a retirement or set up a new business.
One out-of-work banker decided to open a frozen tortilla factory. Alch worked with him to develop a detailed business plan before he opened for business.
A Minnesota native, Alch, 45, holds a doctorate in education from UCLA and retains a hint of an accent from the Midwest. He has changed jobs himself three times: He managed a dry-cleaning business in Minnesota, was assistant vice chancellor at UCLA, and was head of training and development for Fluor Corp., the Irvine engineering and construction company.
He recalls the bitter experience of losing his job at UCLA when his mentor there was fired. The experience gave him an understanding he has used to counsel people who have recently lost their jobs. “It teaches you some resourcefulness,” he said. “Your self-esteem doesn’t have to suffer if you put your mind to what you have to offer in another arena.”
One of his most difficult assignments was counseling a marketing manager moments after the man had been fired after 14 years with his company.
“He was explosive; he said he was going to sue,” Alch said. “He said the company was abusive, that he had hated working there and that he should have left long ago.”
Alch said he asked the man why he hadn’t left before. The marketing manager thought for a minute and seemed to have a change of heart. “He said, ‘Why am I mad? There are lots of opportunities out there.’ He shook the president’s hand on the way out and thanked him for the severance package.”
