What type of movement pertains to an employees departure from the organization?

Have you ever stopped to consider the fact that nearly everyone currently employed by your organization will, sooner or later, and for better or worse, leave?  Yes, it’s all part of organizational “facts of life”.  It’s also not something that we are likely to give much thought or consideration on a regular basis.  We do, however, spend a lot time and energy trying to prevent it.  For instance, improving employee retention continues to be a hot HR topic.  With – among other reasons - an ongoing war for talent, a high investment in resources put forth to train employees in the latest skill sets, and the desire to develop a solid “employer of choice” culture, we have all come to understand that it is more important than ever that we try to keep our best employees.

We may indeed be trying harder than ever these days to retain the best folks, and sometimes we succeed.  But we aren’t always successful…..and, let’s face it, sometimes it’s most definitely for the best that a certain employee finds, or is shown, the exit.  And even with those involuntary reasons for an employee’s departure, we may still try to stop or prevent it – through application of various policies, progressive discipline, and coaching.

The specific paths that employees may take which lead to their ultimate exit from your company could be infinite, but the doors through which they eventually do exit are common among almost all organizations.  Let’s take a closer look.

VOLUNTARY RESIGNATION

One of the most common ways that employees leave your organization is through resignation – with the intent to take a new job, stay home with the kids, etc.  Yes, you want to apply all the retention tools you can to keep the best folks around, but as said before, that won’t always work.  When someone does resign, it’s very important to have a good idea in advance of how your organization will manage that particular exit process.  Let’s start with your policies.  In Texas, for example, an employer is not required to pay any accrued but unused vacation or paid time off at the time of termination, for any reason, provided that they state this position in their policy.  How will your organization handle this?  Also, do you expect resigning employees to provide and be able to work through a standard notice period?   And, if they don’t provide an adequate notice or work through the end of that notice, will you pay them for any available vacation or paid time off?  All these details and more should be considered by employers with regard to employees who resign.

And one more point about resignations.  Although it could easily be considered as a separate form of employee separation, I would include job abandonment in the “resignation” category.  Technically, when someone abandons their job (i.e., doesn’t show up to work after a certain period of time – which can and should be defined in your policy, but would typically be from 1 to 3 days), they are simply resigning without notice.  They are really also “terminating themselves”….which leads us to the next separation type.

INVOLUNTARY TERMINATION (PERFORMANCE-BASED OR MISCONDUCT)

Performance-based terminations are initiated by the organization for unacceptable job performance, and misconduct-related terminations are initiated by the company for inappropriate conduct or behavior – typically, in direct violation of a published policy.  These types of employee exits are, by their nature, “involuntary” in that the employee does not typically seek separation of employment.  They can range from mildly unpleasant to critical emergency situations which put the organization and its employees at risk on a variety of levels.  In addition, the potentially volatile employee relations situation that naturally goes along with an employee’s involuntary termination can be a major challenge for any organization, and one for which I strongly recommend that you call me.

As with voluntary resignation, your organization will need to determine its policy on what to pay a terminating employee with regard to accrued but unused vacation or other paid time off.  Again, with Texas employers, there is no requirement to pay for any unused vacation or paid time off at termination, and many of our clients will choose not to pay this to those employees who are terminated for misconduct, but may indeed pay it to any employee who is terminated for performance reasons.  Whatever you choose to do, it’s very important to apply your policy consistently to every employee whose employment is terminated for these reasons.

RETIREMENT

We have all probably heard a lot about the topic of retirement, and we all probably have our own opinions about what it even means anymore.  It’s an idea that is ingrained in our culture to such an extent that it’s part of the American dream.  Financial services firms bombard us with advertising about being financially prepared for retirement, and HR departments are still very concerned with administering our 401(k) retirement plans and the very few traditional pension plans that still exist out there.  However, modern workplace reality reflects overall shorter employment tenures in just about every industry, and it seems obvious that the days of working for the same employer for your entire career are long since over and done.  Does anyone really formally “retire” anymore?  It’s an evolving concept, to be sure, but – at least for the time being – I would argue that traditional retirement is still enough of a “thing” that it should remain among the main categories of employee separation in the world of HR administration.  As with the other separation types already discussed, organizations must determine the expectations of and for employees who intend to formally retire.

MEDICAL SEPARATION

A medical separation occurs when an employee is unable, for health reasons, to continue to work.  Depending upon the size of the organization, as well as the employee’s particular employment status with the organization, such a separation may be classified as a family or medical leave of absence (including a leave under FMLA), a workers’ compensation injury, or a personal injury or illness.  Whatever the particular issue leading to the need for such an exit from the organization, the employee is very likely to have had a personally difficult time up until that point.  It’s important for the organization to be cognizant of that fact and sensitive of the employee’s situation.  It’s also important to ensure that the termination can in no way be considered retaliatory, and to also be prepared for the potential need for coordination of long-term disability or workers’ compensation administrative details, if applicable.  And, as with the other types of separation, organizations must know what they are prepared to do with regard to final payout of accrued vacation, sick leave, and other paid time off.

REDUCTIONS-IN-FORCE

Organizational changes such as office closings, corporate relocations, mergers and acquisitions, reorganizations, consolidation or elimination of job functions, restructuring, or business downturns may sometimes require the termination of employees.  From time to time, particular industries seem to be hit hardest by such events – witness the oil and gas industry today as a prime example! 

As compared to other types of employee separation, even more preparation and consideration is very often warranted when it comes to employee layoffs.  For example, will you offer the affected employee(s) any severance pay?  If so, how much, and on what are you basing that pay decision? Have you reviewed your list of potentially affected employees to ensure there is not adverse impact based on protected employee class? Do you plan to use a formal separation agreement, and if so, who will prepare it?  Will you provide outplacement assistance to help the individual prepare for their next career opportunity?  Will you provide additional compensation for COBRA insurance continuation?  Will you forgive any outstanding employee debts to the organization?  These questions and more must be answered by the organization in advance of any reduction-in-force event. Ineffective or incorrect handling of reductions-in-force can directly expose an organization to legal claims, and handling them well can mitigate or prevent problems - so it’s critical to get this right. 

Regardless of the type of separation encountered, there are some additional administrative details that are common to most of them.  For example, you will surely want to retrieve the company’s property from the departing employee – everything from laptops and passwords to office keys to company vehicles may need to be recovered.  This will obviously be easier with some types of separation (reductions-in-force, retirement, medical separation, and – usually – voluntary), and not so easy in others (involuntary).  You will want to have a plan in advance of how this will be accomplished in all of these situations. 

Additionally, you may find that conducting exit interviews for resigning employees is beneficial.  Done well, exit interviews will allow an organization to potentially track and ultimately address some of the reasons behind some employee departures – both internal (such as lousy managers or even harassing or discriminatory activity) and external (such as the higher-paying competitor across town).

Also, be aware that in Texas at least, resigning employees will receive their final pay on the next regularly scheduled payday, and employees terminated by the company must be paid within six calendar days from the date of termination.  Other states may have completely different requirements for employee final pay, so make sure you understand your responsibilities in this area.

Regardless of which type of exit your employee may ultimately take, my firm and I are here to help you and your organization with the process. 

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