Rising corporate profit, fewer business bankruptcies and an increased rate of hiring are expected to drag down prices for outplacement services during the next three years as demand declines.
Los Angeles, CA (PRWEB) November 07, 2014
Outplacement services have a buyer power score of 4.7 out of 5, which reflects very strong negotiating power for buyers. Demand has declined during the past three years as companies recover from the recent recession. Outplacement services are countercyclical, so demand increases during times of economic decline when many companies conduct layoffs to avoid financial default. “Although service prices spiked during the recession, prices have since fallen due to recovering corporate profit levels, fewer business bankruptcies and increased hiring efforts,” says IBISWorld procurement analyst Michelle Hovanetz. “Prices for outplacement services are expected to continue dropping through 2017 as the economy further stabilizes and businesses start to expand their operations, benefiting buyers.”
Outplacement services have a low level of price volatility, which helps buyers to better budget for purchases. Price trends are steady largely thanks to a stable supply chain and favorable input cost trends. With relatively few inputs needed to provide outplacement services, buyers face little risk of discontinuity of service due to supply chain problems. “A shift toward increased online service offerings has contributed to falling supplier costs, which have boosted vendor financial stability and improved supplier profit margins,” adds Hovanetz. “In turn, buyers have improved leverage in negotiations.”
The competitive environment is moderately concentrated, but new suppliers continue to enter the market, which gives buyers more vendor options. Large multiline firms have started to incorporate outplacement services as a means to bolster their HR consulting and risk-management portfolios. Market leaders include Adecco and ManpowerGroup, which carry the largest outplacement brands in Right Management and Lee Hecht Harrison, respectively. Furthermore, outplacement vendors have increasingly shifted toward more flexible, cost-efficient virtual platforms, which have allowed a greater number of small suppliers to enter the market, boosting competition. The high number of substitutes available to buyers has also increased competition. Buyers can opt to provide many of the services offered by outplacement firms internally or, alternatively, can provide a different type of severance package. For more information, visit IBISWorld’s Outplacement Services procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of outplacement services, which are designed to help laid-off employees find new jobs following a downsizing event or other related business change. Suppliers offer career counselors and job search experts to assist displaced employees with a variety of services, including interview preparation, resume and cover letter writing, business seminars and resume distribution. The former employer pays for outplacement services as a way to minimize their financial liabilities, avoid potential lawsuits, protect their market reputation and help retain unaffected employees. This report does not cover compensation and benefits planning services or risk-management consulting services.
Executive Summary
Pricing Environment
Price Fundamentals
Benchmark Price
Pricing Model
Price Drivers
Recent Price Trend
Price Forecast
Product Characteristics
Product Life Cycle
Total Cost of Ownership
Product Specialization
Substitute Goods
Regulation
Quality Control
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Imports
Competitive Environment
Market Share Concentration
Market Profitability
Switching Costs
Purchasing Process
Buying Basics
Buying Lead Time
Selection Process
Key RFP Elements
Negotiation Questions
Buyer Power Factors
Key Statistics
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