The Last Benefit

August 18, 2006
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Grandville trucking academy West Michigan CDL owes much of its 100 percent placement rate to the large number of displaced workers who enter its program. Roughly half of its students come directly from the manufacturing sector through Michigan Works!, the state’s work-force development agency.

At no cost to employers, the academy represents one of a variety of options for what will likely be the last benefit an employer can offer its employees: outplacement assistance.

“We’ve done a lot of training of former Steelcase, Bosch, Life Savers, Bissell, Electrolux — you know: the story of West Michigan,” said Mike Birdsall, West Michigan CDL founder and president. “Now we’re starting to get Delphi people.”

Similar programs are three to five weeks in length, but West Michigan CDL has students ready for work after two weeks of aggressive training. All of the Michigan Works! students are attending on Workforce Investment Act grants, so Birdsall will leave no question about their employment prospects.

“We make sure the individuals are employable prior to starting school; they usually have multiple job offers,” he said.

Michigan Works! provides financial assistance for retraining through the Workforce Investment Act and the Trade Act. Both options require that the training lead directly to employment. The WIA offers one year of school, up to $5,000. The Trade Act, for workers affected by NAFTA, provides two years of school, up to $6,500 annually, with more funds available if needed. The agency can also provide on-the-job training support, reimbursing an employer up to $4 an hour for the cost of training.

Though it has become increasingly popular as workers seek new careers in the lackluster job market, less than half of Michigan Works!’ clients seek retraining. Most clients use only the agency’s traditional services, which can start from the moment an individual learns he or she will soon be without a job.

If an employer consents, Michigan Works! will conduct short onsite information meetings to instruct workers on how to file for unemployment compensation, what retraining opportunities are available, and what other free services they can use to help find work.

“So when they’re laid off, they know exactly what to do,” said Maureen Downer, program manager for Michigan Works! in Kent and Allegan counties.

But the more specialized and skilled workers are, the less likely it is that they will find employment through large programs such as Michigan Works! or the more involved version available locally at The Employer’s Association. In these cases, the employers will often bear a greater responsibility in the transition.

Outplacement is one of the core functions of national career management firm Lee Hecht Harrison. Some of its programs are similar to those of Michigan Works! or TEA — seminars on the plant floor and other short classes — but others are very customized and intensive.

“It’s the old concept as you move up the career pyramid,” said Kevin Ecclesine, senior vice president for Lee Hecht Harrison in West Michigan. “At the lower level, the programs are much shorter, but as you move up in terms of professional responsibility, the support becomes longer because it’s going to take those people more time to find a job.”

A process that can sometimes take many months, Lee Hecht Harrison uses a 10-step program that walks the individual through personal assessment to managing the transition to a new job. Course work and career coaching are provided throughout on topics such as interviewing and personal development.

These services are evolving with the workplace. A popular new program at Lee Hecht Harrison is LHH@Home, a blending of physical programs with Internet or phone services that better fits the culture of the mobile professional or telecommuter.

Above all, Ecclesine said, the process should be approached as an opportunity for growth and a positive career transition.

Ken Taber, a pastor, psychotherapist and career consultant, agreed that many of the problems an individual will face during a transition will be mental. A termination triggers feelings of shame, fear, anger and self-doubt. Outplacement allows employers to provide a dignified and hopeful exit, with support through what will likely be an emotional period.

These services are also a benefit to the remaining workers. Knowing that they will be treated graciously should they ever suffer the same fate will keep morale high.

“You have to look at it as if there was a death in the family,” Taber said. “There is a loss for both the individual terminated and the remaining workers.”

Grand Rapids attorney Rob Dubault, chair of the labor and employment practice at Warner Norcross & Judd LLP, said that outplacement services can be a costly but valuable part of the overall compensation picture. He has seen packages costing upward of $10,000 to $20,000.

While a responsible move from a managerial perspective, such services also could provide a buffer against potential liability. Employers will generally require a separation agreement releasing the company of any claims as part of an outplacement and severance package. It will also decrease the likelihood of any possible legal action by getting the former employee to think about the next employer, rather than the last.

“Any time you get someone looking forward instead of backward, that’s a good thing,” Dubault said. 

Has The Tide Turned?

In 2004, there were 15 Worker Adjustment and Retraining Notifications (WARNs) issued in West Michigan, the most of any year since the recession. A WARN is a state-mandated mass-layoff notice from an employer to state and local officials that activates a response team from Michigan Works! and the Michigan Bureau of Workers & Unemployment Compensation.

There were 13 WARNs in both 2002 and 2003, with nine in the first half of 2005. But in the past year, there have been only three, and none since March.


2005

Company

   Location    

      Layoffs     

Dana Corp.

Muskegon

250

Lear Corp.

Walker

207

Steelcase Inc.

Grand Rapids

600

Johnson Controls Inc.

Holland

35

Johnson Controls Inc.

Holland

60

Rogers Department Store

Wyoming

200

Danly I.E.M. Inc.

Ionia

50

Service Transport Inc.

Grand Rapids

11

Sappi Fine Paper N.A.

Muskegon

351

Robert Bosch Engineering       

Kentwood

61

2006

Cracker Barrel 

       Grand Rapids      

70

Tower Automotive            

Greenville

  216 

Cracker Barrel   Grand Rapids  70
Tower Automotive    Greenville  216

*Robert Bosch also issued a WARN earlier in the year that it later rescinded.

Source: Michigan Department of Labor & Economic Growth


Displacement Affects Older More

One of the most critical factors affecting a displaced worker has proven to be the age at which the individual is forced to start over.

“Young people take it pretty much as a matter of course,” said Kevin Ecclesine, senior vice president for Lee Hecht Harrison in West Michigan. “They’ve grown up knowing they’re going to have several jobs in their lifetime. Older people have more difficulty dealing with it because they’re more likely to have been with one employer for a longer period of time.”

In recent years, layoffs have increasingly affected a higher percentage of the Michigan workers that will have the greatest difficulty righting themselves, according to the latest U.S. Department of Labor’s Mass Layoff Statistics.

Note that since 1999, the percentage of displaced workers in the state over the age of 45 has steadily grown.


Under 30

    30-44    

     45-54     

     55 Plus    

1999

21.9

44.0

22.9

10.7

2000

22.3

44.2

23.1

9.7

2001

22.0

42.3

24.2

10.9

2002

20.5

40.9

24.5

13.7

2003      

15.9

37.7

32.0

13.9

Source: U.S. Bureau of Labor Statistics

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