April 2026
The Value
Our analysis of the $2.2B North American outplacement market reveals that $1.45B never reaches the people it was purchased to help.
Gap.
Outplacement exists because layoffs create costs that extend well beyond the separation itself: slower transitions, reputational damage, survivor anxiety, legal exposure. Companies buy it to contain those costs. The purchase is specific: a service that will produce faster placements, reduce organizational fallout, and demonstrate to remaining employees that a difficult process was handled with care.
Our analysis of the $2.2 billion North American outplacement market found that a large share of the industry is not delivering on that promise. The gap between what employers pay for and what participants actually receive is far wider than most buyers realize.
The numbers
In the North American market, employers spend roughly $2.2 billion per year on outplacement services. Under our central estimate, roughly $1.45 billion of that spend does not translate into value actually consumed by participants. About $759 million appears tied to services that are never meaningfully activated at all. Another $688 million is lost through partial or unrealized use among participants who do engage.
Under that central estimate, only about 34 cents of every dollar spent translates into value actually consumed by the person the service is supposed to help.
That finding should force a reassessment of the category.
Capital allocation, North American outplacement market
Two-thirds of outplacement spending never reaches the participant
Source: FirstSourceTeam analysis. Central scenario estimates.
The real problem
Because the industry's core claim has never been that outplacement looks good on an invoice. Its claim is that it achieves important outcomes. But a service that is never activated, only partially used, or experienced negatively by the people receiving it cannot be assumed to achieve the objectives for which it was purchased in the first place.
That is the real problem.
The industry has been allowed to treat procurement as proof of effectiveness. It is not. Purchase does not equal use. Use does not equal value. And value is the only thing that can plausibly support the goals employers actually care about when they buy outplacement: smoother transitions, reduced fallout, stronger employee trust, and protection against reputational harm.
Our analysis found that too much of the category breaks before it reaches that point.
What coaching actually costs
The component participants value most in outplacement is one-on-one coaching. We computed what employers actually pay per hour of coaching that gets delivered, once non-utilization and session attrition are accounted for.
| Provider | Package Price | Hours Consumed | True Cost / Hour |
|---|---|---|---|
| RiseSmart Empower | $2,499 | 2.5 hrs | $986/hr |
| Right Mgmt 6-Month | $6,025 | 4.2 hrs | $1,426/hr |
| LHH Professional | $5,200 | 3.4 hrs | $1,538/hr |
| Korn Ferry Executive | $22,800 | 11.9 hrs | $1,916/hr |
Open-market coaching rate: $297/hour (ICF 2025, North America average). Effective cost accounts for participants who never engage and coaching sessions scheduled but not completed.
The markup ranges from 3.3x to 6.4x, not because the coaches are better, but because the bundled pricing model obscures the true per-unit cost. Even if every participant showed up and used every session, bundled pricing would still produce coaching costs nearly double the market rate.
Effective cost per coaching hour consumed
Employers pay 3–6x the market rate for coaching they bundle but don't fully deliver
Market rate: $297/hour, ICF 2025 Global Coaching Study (North America). Effective cost accounts for non-utilization and session attrition.
The credibility delta
This concern is reinforced by another pattern in the market: the gap between provider-reported claims and participant-facing signals.
| Provider | What They Report | What Participants Say | Platform |
|---|---|---|---|
| LHH | 97% strongly recommend | 1.7 / 5.0 | Trustpilot |
| Right Management | 98.5% satisfied | 2.1 / 5.0 | Yelp |
| RiseSmart | 92% satisfied | 2.8 / 5.0 | Trustpilot |
Gartner, which surveys corporate HR buyers, rates LHH at 3.7 / 5.0. Trustpilot, where participants leave reviews, rates LHH at 1.7 / 5.0.
These public-review signals are imperfect, and no serious reader should treat them as definitive on their own. But they do raise a larger credibility problem. In a market built around consequential claims, providers have asked buyers to accept self-authored performance narratives without anything close to a normal standard of independent verification.
That lack of scrutiny has protected the industry from the questions that matter most.
How many participants actually activate?
How many use the service deeply enough for it to matter?
How many find it useful?
And on what basis should any employer believe that a service with weak activation, partial utilization, or poor participant sentiment is meaningfully protecting the organization from the costs it was bought to reduce?
These are not peripheral questions. They are the entire case for buying outplacement.
If the industry cannot answer them clearly, then the problem is not just opacity. The problem is that the category's value proposition may be materially weaker than the market has been led to believe.
Outplacement may still have an important role to play. But if the industry wants to keep claiming that role, it should have to prove far more than it currently does.
About this research
This analysis is based on an original economic model using 32 numbered assumptions, each independently sourced and confidence-rated. Data sources include the Bureau of Labor Statistics, EEOC enforcement statistics, the Kaiser Family Foundation, verified provider pricing from published rate cards and public procurement records, the ICF 2025 Global Coaching Study, and peer-reviewed research including the JOBS Program randomized controlled trials and Brockner's survivor syndrome research.
Eight data points commonly cited across industry analyses were found to be inaccurate, including an inverted non-utilization statistic, a fabricated coaching rate, and misattributed productivity-decline figures. Our model uses primary-source replacements for each. Results are presented under three scenarios with sensitivity analysis. Direct service waste estimates are classified as best-supported. Employer externality costs are presented as speculative extensions with wide ranges.
More cost effective.
Easier to use.
Better for the candidates.
Better for you.