What are Employee Separations?

Employee septations happen when a worker no longer is a member of an organization, thus making them separated. Managers should already be thinking ahead in how to control the outflow of their human resources. Their policies will ensure sustainability and a smooth transition for both their employees and their companies.  They should also be thinking about the different types of costs included in separations of employees. Those costs include:

Recruitment Costs – The cost of retirement payment and possible pension payments.

Selection Costs – Occurs when requiting a new employee, the costs associated with the hiring.

Training Costs – The costs associated of training or developing the employee.

Separation Costs – Costs associated with retirement, severance, or pension.

Along with the cost’s managers should be aware of the benefits in the separation of their employees. These benefits include:

Reduced Labor Costs – Less employees means less people on a business’s payroll. If the labor is not resulting in greater profit it may result in the separation of the employee.

Replacement of Poor Performances – Firing a poor performer may result in recruiting a more proficient performer resulting in greater efficiency.

Increased Innovation – With new employees comes new ideas and possibilities of innovation.

Opportunity for Greater Diversity – With serrations the opportunity for greater diversity is the result. It provides the opportunity for people of diverse backgrounds and culture to work for a company.

(Gomez-Mejia, Balkin and Cardy 2016, 621-624.)

Types of Employee Separations

Employee separations can occur both voluntarily and involuntarily. A good example of a voluntary separation would be retirement. On the other spectrum involuntarily can occur because of a recorded history of bad performance. When a employee is not meeting performance standards the requirements for a layoff record require much more documentation.

Voluntary Separations – This is when an employee makes a conscious personal or professional decision to leave a company. The decision to leave can be due to a multitude or reasons such as, new job opportunity, changing careers ,or wanting more family and leisure time for some examples. They can also be avoidable or unavoidable.

Involuntary Separations – Involuntary separation usually occurs because of poor performance, or other negative reasons. However, management can also decide to involuntary eliminate its relationship with the employee for economic reason. However discharges are more common and is due to performance issues. (Gomez-Mejia, Balkin and Cardy 2016, 624.)

Managing Early Retirements

Early retirements can be a inevitability, this influencing certain actions that must occur by management. This usually occurs during the downsizing process. However, the first task of management is to examine alternatives to layoffs. One of best actions for a business is the possibility of early retirement. There are two main features in retirement policies:

1. A package of financial benefits that make it more appealing to senior employees to retire early.
2. An “open window” that restricts eligibility for early retirement.

Financial incentives commonly based on a formula that accelerates senior employees eligibility for retirement. (I’ve witnessed this been done in bulk in the U.S. military. When the government decided to downsize the branch of the military a large number of its soldiers decided to retire early.

Managing Layoffs

It is common for businesses too implement layoffs when it cannot reduce its labor cost by any other methods. However, managers can also consider possible alternatives:

Employment Policies – One of these alternatives is when managers create policies that eliminate the introduce on day to day activity that are not beneficial to the company.

Change of Job Design – Another is that change of job design that and the transference of employees by utilizing their human resource department to change their job design by sending employees other units of the company to benefit the costs of the company.

Pay and Benefit Policies – Pay and benefit policies ensure the reduction of cost by enforcing a pay freeze when no wages or salaries are increased. To avoid discrimination these freezes should be done across the entire organization.
Outplacement

Outplacement occurs when the human resource department has a program that helps newly separated employees cope with the emotional stress of job loss and provide assistance in finding new job opportunities. (Gomez-Mejia, Balkin and Cardy 2016, 624.)

In my own experience I have seen this in military separation procedures. In 2010 I was on a path to leave the military and a outplacement course was an obligation that all soldiers prior to separation must attend. In 2010 it was a two-day course. Prior to my final separation it was two weeks to allow more preparation for separation.

By the military investing in the smooth transition it helped ensure a comfortable separation for the soldier returning to the civilian lifestyle

Case Study 1: Nokia closes plant in Germany and relocates in Romania

According to the article the Nokias branch move from Germany to Romania upset the Germans. They did this to a reduce the cost since Romania because it is a lower-cost area. Even with state assistance it seems Nokia struggled to be profitable in Germany due to Germanys global competitiveness despite state assistance. Nokia said in a statement that the location within Germany was not a competitive success. They Germans said that if they moved the company it would damage their image among Germans.

The reasoning to move seems justified to me. Unprofitable location equates to profit loss and I see no reason for Germany to be so upset with their business decision since it was professionally unwise to remain in Germany.

Case Study 2: Nokia cuts 3500 jobs to “to ensure profitability

Another article involving Nokia about their job cuts total up to or more that 3500 positions to ensure profitability. The location is Cluj, Romania were t be closed by the end of 2011.  By cutting these locations they hoped to ensure the survivability within Hungary, Mexico, Salo, and Finland.

I understand the reasoning that Mr. Savander used telling media that the job cuts were due to it being unprofitable to manufacture in Europe and long-distance shipping. Seems to me a perfectly reasonable for job cuts due to the transferring of products not resulting in profit.

Case Study: 3 Hundreds of Nokia’s outsourced Symbian developers leaving Accenture

The hundreds of former employees of Nokia that transferred to Accenture were reported to eave the company while obtaining severance packages. Accenture attributed to a lack of work resulting in some workers being ile. The severance packages seemed to be agreeable to those that were offered the packages.

The company stated that due to a lack challenge and workload the employees were more than happy to accept the severance packages. I agree with their action of offering severance packages because it offered a proper incentive for employees to comfortable leave the company without having the fear of worrying about their own finances. This made the layoffs much easier to cope with for the employees.

References

Gomez-Mejia, L.R. Balkin, D.B. & Cardy, R.L. 2016. Managing Human Resources. Global 8th ed. Pearson. London.

 

Communicating Labor Rights, 2008. Nokia Closes Plant in Germany and Relocates in Romania. URL:https://communicatinglabourrights.wordpress.com/2008/01/17/nokia-closes-plant-in-germany-and-relocates-in-romania/ Accessed: 9  November 2020.

YLI.FI, 2011. Nokia Cuts 3500 Jobs “To Ensure Profitability https://yle.fi/uutiset/osasto/news/nokia_cuts_3500_jobs_to_ensure_profitability/5431070 Accessed: 23 September 2020.

YLI.FI, 2012. Hundreds of Nakia’s outsourced Symbian developers leaving Accenture. URL:https://yle.fi/uutiset/osasto/news/hundreds_of_nokias_outsourced_symbian_developers_leaving_accenture/5252177 Accessed: 9 November 2020