Employee Separation | Benefits and Types

Employee Separation

The termination of employees from membership of the organization is referred to as employee separation. Moreover, the rate at which employees leave the organization is measured by the rate of employee separation.

The Costs of Employee Separation

Employee separation always results in some costs. The intensity of the incurring costs varies based on the decision of the management. In fact, either the empty position of the separated employee is replaced by a new employee or the position may be eliminated permanently. The following are the costs that are linked with employee separation.

• Recruitment Costs
• Selection Costs
• Training Costs
• Separation Costs

Benefits 

On one hand, there are costs attached to employee separation. However, on the other hand, there are some resulting benefits too. The following are some of the Employee Benefits that are associated with employee separation.

• The labor cost is reduced
• All the employees who perform poorly, are replaced
• The innovation is increased in the organization
• The diversity is enhanced in the organization

Types 

There are two main types of employee separations based on the initiation of the employment relationship termination. These two types of employee separations are as follows:

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:

• Quits
• Retirements

Involuntary Separation

When an employer of an organization ends the employment relationship with any employee. Then this employee separation is called involuntary separation. There may be several 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:

1. Discharges
2. Layoffs
3. Rightsizing or downsizing

Managing Early Retirements

When an organization decides to downsize its operating scale based on certain circumstances. Then its first activity is to find different alternative options for the lay-offs. For this purpose, an early retirement is a popular option.

Characteristics of Policies of Early Retirement

There are two main features or characteristics of early retirements and which are as follows:

• Early retirement is associated with some attractive package of financial incentives. Specifically, for those senior employees to be retired before their estimated time.
• The duration of the offering additional financial incentives for early retirement is short. So that senior employees make quick decisions and these incentives are no longer valid after the specified period.

Problem Avoidance with Early Retirements

When the early retirement decision is made by the management of the organization. Then the policies of the early retirement should be designed carefully. Similarly, these policies should be properly implemented and administered.

If the policies of early retirements are not managed properly, then this would result in the creation of a lot of problems. Hence, the management of the organization should treat their senior employees similar to the treatment with other employees. So that the senior employees do not feel any discrimination.

Managing Lay-Offs

When an organization is unable to decrease its labor cost by any other method. Then it is compelling to employ the method of layoff. However, before the application of the layoff method in the organization. The management must ensure that they have employed other alternative methods of reduction in labor cost.

Alternatives to Layoffs

Several methods can be used as alternatives to the layoff for reducing the labor costs in the organization. The following are a list of these alternative methods.

1. Employment Policies
2. Changes in the Design
3. Pay & Benefits Policies
4. Training
5. Nontraditional Alternatives to Layoff.

Implementing a Lay-Off

The layoff should be implemented with great care and tact by the management. Since, it can influence the lives of hundreds of people. Certain issues should be considered before implementing layoff policies in the organization. These issues are as follows:

1. The notification to the employees
2. Development of the criteria of layoff
3. The communication method with laid-off employees
4. Coordination with media relations
5. Maintenance of security in the organization
6. Reassurance to the employees who are survivors of the layoff.

Outplacement

The special programs that are designed by the human resource management of the organization for the support of the separated employees. As to bear the emotional stress of their loss of job by assisting them in search of a new job, is referred to as outplacement.

More From Business Study Notes:- Human Resource Management 

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 follows:

• The laid-off employees face some moral problems. So they are supported by the outplacement programs of the organization. Although, they remain productive in the future.
• Outplacement is helpful in the reduction of the litigation that can be started by the employees who are laid off.
• The laid-off employees are assisted in searching for new jobs that are comparable to the previous one.

Outplacement Services

To achieve the goals of outplacement, these services are provided by the management of the organization. So, following are the major services that are provided by the management in the shape of outplacement.

• The laid-off employees are supported emotionally.
• The laid-off employees are assisted in the search for new jobs.