Inside View of Outplacement : The Art of Making an Executive Job Loss a Career Gain : WILLIAM K. ELLERMEYER

William K. Ellermeyer worked for years as a personnel officer at large corporations. Then in early middle-age he found himself out on the street after a change of management at AirCal.

Ellermeyer started an outplacement company in 1979 and, about 10 years later, sold it to Lee Hecht Harrison Inc., a New York-based outplacement firm.

What is outplacement? For a fee, such a firm will counsel executives who have been fired or laid off, provide them with offices and telephones in its offices, and give them advice on resumes and interviewing. For lower-level employees, the company runs group counseling sessions.

Lee Hecht, whose Orange County offices are in Irvine, has worked for companies with as little as $5 million in annual revenue and for ones whose revenues put them among the Fortune 500. In Orange County alone, the firm did work for 142 companies last year, including blue-chippers such as the Irvine Co. There are about 100 executives in its Orange County program right now.

Ellermeyer graduated with a degree in business administration from Principia College in Illinois. He worked as a personnel officer for Hunt Wesson and other companies before starting the Ellermeyer Co., the concern he sold to Lee Hecht. He lives in Irvine.

Ellermeyer, 54, now a senior vice president of Lee Hecht, talks about the outplacement business with Times staff writer Michael Flagg and offers advice to executives who have been fired or laid off.

Q. Why would a company hire you?

A. A very small company might use us because it’s an intimate corporate setting where everybody knows each other. So if you let the controller go, it’s quite a visible thing. Often these people even know each other’s families. A good example of this would be an entrepreneurial company that’s growing. They’re going to go public, (but) the controller is not a certified public accountant and really not qualified but has been with them from Day One. It’s traumatic. So outplacement is one answer.

Q. What sort of executives come in here?

A. They tend to earn from a low of $45,000 to a high of $300,000. The average salary is probably around $90,000. So we’re talking about senior management. Many of them are given this service as a perk.

Q. Speaking of perks, how much severance will an executive usually get these days?

A. It’s all over the map. There are some companies that, shall we say, are a bit on the tight side. Even for a person with long service, they may give a week of severance for every year of service. For a senior executive--we’ll qualify that by saying anyone who makes more than $75,000 a year--they’re likely to get three months at a minimum if they’ve been there over three years. A good average for a person who’s been there five years would be six months of severance. Quite common, but it’s not an absolute.

Q. One might assume you thrive in recessionary times such as these. Do you?

A. We get some business from an economic downturn, but it’s generally lower-level, non-management people. There’s a lot of tentativeness in the marketplace now, so there’s less change, less movement in CEO positions, fewer mergers and reorganizations. So there’s less business for those of us who do executive outplacement. And a downturn is tougher on us from a cost standpoint because it takes longer for people to get a job. The average length of time an executive spends in here has usually been about six months. It’s running closer to seven right now.

Q. Just because of the economy?

A. They’re also in here longer because more of them are looking at career changes, like starting their own company or buying a business, particularly those people with a little more money and who are over 40. Those people could be here a year.

Q. So the downturn isn’t good for you, either?

A. Right. Our growth really came in the 1980s during the good times, when there was a lot of change and restructuring of corporations going on.

Q. Is this a crowded industry?

A. I’d say there’s a lot of competition. It’s becoming a mature industry in the major cities. In Southern California, there have got to be 25 or 30 viable, fairly substantial firms.

Q. How long has it been this competitive?

A. Oh, I think from the mid-1980s on. Just in the last couple of years in Orange County alone three East Coast or Midwest outplacement firms have opened offices.

Q. What are your fees like?

A. They’re pretty standard across the executive outplacement industry: 15% of the person’s annual compensation. It’s a onetime fee paid upfront by the corporation. The individual stays in the program until such time as they get a job, however long that takes. Group workshops for non-management people might be in the neighborhood of $1,500 a day per consultant. In the executive-search world, by the way, the standard fee to go find an executive runs about 25% or 30%.

Q. So you don’t compete on the basis of fees?

A. No, the competition is based on the quality and experience of the counselors.

Q. As for your clients, what changes do you discern in the last few years in corporate policies toward firing or laying off executives?

A. The major change is they approach it from a more humane standpoint. There’s a recognition that the most valuable asset the company has is people, so it isn’t just the people you let go you need to worry about, but the people who remain behind. If you’re seen to take care of people whom you have laid off, the people that remain behind can say: “Well, I understand why they had to do that, but at least they took care of them.”

Q. How long has this new attitude been around?

A. It’s hard to track exactly, but the outplacement business developed in the mid-1970s on a small scale, primarily in Chicago and New York. It began to grow in the early 1980s, when you started to see it on a national basis.

Q. Why did this new attitude toward firings start in the 1970s?

A. I think it was a time of realization in the corporate world that people are much more productive when you take care of them. The old autocratic command-and-control system began to fade, and a more egalitarian kind of philosophy evolved in American industry that is still developing today.

Q. What sort of philosophy?

A. It’s along the lines of helping people, coaching them to fulfill their potential. When I started in industry it was: “Do what you’re told to do, and don’t ask questions.” It was very much more the military model. Well, that model doesn’t work in corporate America anymore, and companies that still practice it won’t keep the best employees in the long run.

Q. What was the business like back in the beginning?

A. After I started my firm in 1979, the first two years it was very difficult to even get people to understand the concept. I was continually being confused with executive-search firms. People think we’re in the placement business. We’re not. In fact, we’re the direct opposite of executive search: We get paid to take people out; they get paid to put people in.

Q. Are there particular industries that use your services more than others?

A. The food industry, financial services, consumer products, high-tech electronics, real estate, health care, medical products and the defense industry. All those industries are growing and undergoing a lot of change.

Q. Is that mix changing at all?

A. It’s broadened. In the early 1980s here in Orange County, we saw a narrower focus; we dealt mostly with large corporations. Now we’re finding even much smaller companies using outplacement.

Q. In what kinds of situations might your firm be called in?

A. Well, as an example, you might have a smaller firm with, say, a talented person at a senior level who’s a personality misfit. He may be vice president of operations, for instance, and he and the president just don’t work well together; the personality clashes get intense. We see a lot of situations where you have someone who doesn’t fit into a corporate culture. In one company, an individual may not fit at all. But over here at another company, he’s a hero.

Q. Is the outplacement business growing?

A. Strongly. I think the total billings of all outplacement firms have got to be somewhere between $500 million and $600 million a year. It’s gotten to be big business.

Q. Because of this new corporate attitude toward terminations?

A. Yes. Corporations know it’s good business to take care of employees they have to let go. It’s not just that they have a heart. Corporations spend lots of money on public relations, so taking care of people as they’re going out the door makes sense. A lot of good will and good public relations can be negated by not taking care of people who no longer fit in the business.

Q. Given the salary ranges of the people who come through here, can one assume most of your clients tend to be older white men?

A. Definitely. We’re seeing an increase in the number of women, but I would say women make up 10% or less. That’s a reflection of where they are and their numbers in the corporations. We see senior women more in financial services, probably, than any other area.

Q. At this level, do they still face more problems than the average male in finding a job?

A. My guess is yes. There’s always a feeling that “it’s a man’s world and therefore it’s set up to benefit men,” and to a certain degree that’s true. Women senior executives probably have to be better than their average male competition. On the other hand, they have increasing numbers of support groups that don’t even exist for men. If you’re a 55-year-old man and you go out in the marketplace, you’re not going to find many organizations that start with “Men’s Assn. of . . .” Women are better at building support groups.

Q. Why is that?

A. Women in some ways are more effective in coping than men. There’s the ego blow to the male, where the loss of the job is often translated into loss of self-esteem. That’s because in our culture the job is your identity. So when you lose your job, you lose your identity. I can speak firsthand on that, having departed a couple of times from corporations in situations where I was not the person making the decision; I recall how miserable I felt about it.

Q. How do you help both men and women deal with age discrimination?

A. It’s a reflection of their energy. I’ve met 60-year-old people who are energetic and powerful. I’ve met others who are 38 years old who seem like all the air has been let out. Of course, there’s still age discrimination, but it’s getting increasingly better for people over the age of 45 or 50.

Q. Why?

A. More and more companies are looking at productivity instead of age. We’ll even see senior people coming back into the job market in the 1990s, when there will be less talent available. The youth emphasis we saw in the 1970s has definitely gone by the boards: On television, half the commercials you see now have people with gray hair.

Q. What percentage of executives would you estimate are going to find themselves being fired or laid off in their careers these days?

A. I would say the odds of that are pretty high. It’s rare in this day and age for a person who’s a mover and shaker to go through a career without having it happen once or twice. From Lee Iacocca on down, talented people get dumped out at various times during their career.

Q. So sometimes these are the more talented people in the corporation, not the less talented?

A. Yes. The most active and the most aggressive executives often have this happen more than once because they are risk-takers and often get themselves into a situation where they don’t fit within the company. The old model of 30 years and a gold watch is definitely gone.

Q. What’s the likelihood someone will be able to find another job and stay in Southern California?

A. Southern California is probably one of the best job markets in the country. So when somebody says, “I have my home here in Orange County, and my kids are in school,” it doesn’t bother me that much because I figure this is a good area to find another job.

Q. Being fired can be devastating, obviously. How do you advise a person to cope with that?

A. The first thing you need to do is to take stock. Most people are in such a hurry to get a job--it’s like clothes, they feel naked without one--that they don’t take the time to assess themselves and their skills. We all have more talent than we know, but we rarely take time to find out what that talent is.

Q. What do your counselors look for?

A. We look at what people have achieved inside and outside of work. Often by looking at those achievements, you can see various themes. When I did this myself--and I was already 43--I found that I tended to be a counselor-teacher. I also found that I tended to be directed, self-sufficient and a risk-taker, and so having my own business made sense.

Q. What advice do you have for an executive who’s been fired?

A. After taking stock, get a very focused, short, sweet, 1- to 1 1/2-page resume stating simply where the person has worked and some of their accomplishments. Most people think more is better. In fact, when it comes to resumes, less is better. People sometimes feel that if they throw everything in there, something will hit. What that really does is invalidate the resume.

Q. What’s the next thing he or she should do?

A. The third thing would be to get good at talking about yourself. Practice your verbal skills on friends. We talk about everything but ourselves, so you need to be able to define your strengths and what you’ve accomplished. Work at being natural--informal, yet professional. First impressions are very meaningful.

Q. How do you prepare for an interview?

A. You should do some research on the company you’re interviewing with. For years when I was in the corporate world, I was amazed at how little the individual often knew about the company he was applying to.

Q. Anything else?

A. Finally, you should have a marketing plan and the centerpiece should be a word that gets tossed around a lot: networking. All the research shows that about 70% of all jobs happen through some sort of personal contact. Many people want to find a job on paper and through the mail. They make a mistake. They’re guaranteed to be in the market a long time if they’re not out pressing the flesh.

Q. What exactly do you mean by networking?

A. Networking is giving, not getting: It’s going out and sharing with others your idea about what you want; it’s connecting with people so you get visibility in the marketplace. It’s the most powerful method of marketing. There are meetings of all types of associations all over Orange County, and you should be going to them.

Q. Do you see a lot more mid-career changes in the future?

A. Absolutely. It’s very possible now for persons to have three very separate careers in their lives.