One industry, at least, is benefiting from the economic downturn, according to a report by Hardman & Co, the corporate research company. Outplacement, or career transition, specialists are reporting increases in business activity as they are brought in to help organisations to cut jobs.

Outplacement specialists help people to cope with redundancy – advising them on new employment, retirement or freelance opportunities. The report focuses on figures from Penna and Savile Group, the two biggest outplacement providers.

Outplacement made up 59 per cent of Penna’s income in April to September, an increase of 39 per cent on the same time last year. The report places significance on these numbers because Penna has a 30 per cent share of the outplacement market and its experiences are likely to be felt by the whole industry.

The report also says that, although outplacement is experiencing growth, this is not a bonanza. Stuart Lindenfield, the head of the transitions practice at Reed Consulting, agrees. “There isn’t a direct correlation between company closures and outplacement trends,” he says.

There tends to be a lag of three to six months between “landmark events”, such as a bank going bust, and the outplacement industry experiencing an upturn, he adds. This is because such events do not have a direct effect on outplacement trends – a bank going bust is unlikely to use an outplacement company, simply because they are going through too catastrophic a time to think of it.

Mr Lindenfield estimates that Reed’s outplacement service has grown 50 per cent quarter-on-quarter recently. “But the real shift will probably be February to May of next year,” he says. “What’s mainly happening now is we’re having planning conversations with organisations that are thinking about how they are going to downsize.”

However, Michael Moran, the chief executive of Fairplace, Savile Group’s outplacement company, says that business activity in his company since the second quarter of this year is up by 100 per cent already, which he puts down to most of his clients being in the financial services sector.

Whatever the reasons for the surge in activity that these companies are experiencing, they are agreed that it is probably temporary and have flexible enough business models to cope.

Mr Moran believes that the boom may encourage other companies such as recruitment consultancies to offer outplacement services, but the organisations that will survive the inevitable downturn in the need for outplacement as the economy eventually recovers will be “those that already have long-standing relationships with corporate clients”.

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