The termination of employees from membership of the organization is referred as employee separation. The rate at which employees leave the organization is measured by the rate of employee separation.
The Costs of Employee Separation
The employee separation is always resulted in some costs. The intensity of the incurring costs varies on the basis of the decision of the management that either the empty position of separated employee is replaced by a new employee or the position may be eliminated permanently. Following are the costs that are linked with the employee separation.
- Recruitment Costs
- Selection Costs
- Training Costs
- Separation Costs
Benefits of Employee Separation
On one hand there are costs attached with the employee separation, but on the other hand there are some resulting benefits too. Following are some of the Employee Benefits that are associated with the employee separation.
- The labor cost is reduced
- The employees who perform poorly, are replaced
- The innovation is increased in the organization
- The diversity is enhanced in the organization
Types of Employee Separation
There are two main types of employee separations on the basis of the initiation of the employment relationship termination. These two types of employee separations are as follow.
- Voluntary Separation:
When an employee terminates the employment relationship, then this form of employee separation is known as voluntary separation. Voluntary separation is further divided into two categories.
- Involuntary Separation:
When employer of an organization ends the employment relationship with any employee, then this employee separation is called involuntary separation. There may be a number of reasons for involuntary separations like the employee does not fit with the requirements of a particular job or due to economic necessity. Involuntary separation is further divided into the following categories.
- Rightsizing or downsizing
Managing Early Retirements
When an organization decides to downsize its operating scale on the basis of certain circumstances, then its first activity is to find different alternative options of the lay-offs. For this purpose early retirement is the popular option.
Characteristics of Policies of Early Retirement:
There are two main features or characteristics of early retirements and which are as follows.
01- Early retirement is associated with some attractive package of financial incentives for those senior employees to be retired before their estimated time.
02- The duration of the offering additional financial incentives for early retirement is short, so that senior employees make quick decision & these incentives are no longer valid after the specified period of time.
Problem Avoidance with Early Retirements
When the early retirement decision is made by the management of the organization than the policies of the early retirement should be designed carefully. Similarly, these policies should be properly implemented & administrated. If the policies of early retirements are not managed properly, then this would result in the creation of a lot of problems. The management of the organization should treat their senior employees similar to the treatment with other employees of the organization so that the senior employees do not feel any discrimination.
When an organization is unable to decrease its labor cost by any other method, then it is compelling to employ the method of layoff. But before application of layoff method in the organization, the management must ensure that they have employed other alternative methods of reduction in labor cost.
Alternatives to Layoffs
There are several methods that can be used as alternatives to the layoff for reducing the labor costs in the organization. Following are a list of these alternative methods.
- Employment Policies
- Changes in the Design
- Pay & Benefits Policies
- Nontraditional Alternatives to Layoff.
Implementing a Lay Off
The layoff should be implemented with great care & tact by the management because it is can influence the lives of hundreds of people. There are certain issues that should be considered before implementing layoff policies in the organization. These issues are as follows.
- The notification to the employees
- Development of the criteria of layoff
- The communication method with employees that are laid-off
- Coordination with the media relations
- Maintenance of the security in the organization
- Reassurance to the employees who are survivors of the layoff.
The special programs that are designed by the human resource management of the organization for the support of the separated employees to bear the emotional stress of their loss of job by assisting them in search of a new job, is referred to as outplacement.
The Goals of Outplacement
The main purpose of outplacement is that it ensures the productivity of the employees in the organization. There are certain goals of outplacement, which are as follow.
01- The laid off employees face some moral problems so they are supported by outplacement programs of the organization so that they remain productive in future.
02- Outplacement is helpful in the reduction of the litigation that can be started by the employees who are laid off.
03- The laid off employees are assisted in searching of new jobs that are comparable to the previous one.
In order to achieve the goals of outplacement, outplacement services are provided by the management of the organization. Following are the major services that are provided by the management in the shape of outplacement.
01- The laid off employees are supported emotionally.
02- The laid off employees are assisted in search of new jobs.