Types of Termination: Attrition, Layoffs, Resignation, Retirement & RIF

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  • 0:02 Overview of Termination
  • 0:26 Voluntary Terminations
  • 2:36 Involuntary Terminations
  • 4:05 Lesson Summary
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Lesson Transcript
Instructor: Shawn Grimsley
An organization's labor force is almost always in flux: sometimes employees need to be replaced and sometimes they don't. In this lesson, you'll learn about the different ways employment can be terminated. A short quiz follows the lesson.

Overview of Termination

Rebecca is the vice president of human resources for a construction company. Part of her job is to oversee the staffing of her company to ensure that it has the right employees in place to achieve its goals. A related responsibility is managing the process when an employee's employment is terminated. You can break employment termination into two general categories: voluntary termination and involuntary termination. Let's take a look at each.

Voluntary Terminations

Some employee terminations are within Rebecca's control, and some are not. An employee is voluntarily terminated from employment when the employee decides to leave. Employers cannot stop an employee from quitting. The primary means by which employees voluntarily leave Rebecca's company is through resignation or retirement. Resignation is simply quitting a current job, while retirement tends to be a permanent exit from either the workforce or a specific career. Of course, some employees 'voluntarily' leave by way of death.

The decline of a company's workforce through voluntary termination, including resignations, retirements and deaths, is referred to as employee attrition. In fact, sometimes a company will use employee attrition to reduce its labor force 'naturally.' No one gets fired; employees are just not replaced. Of course, attrition can also adversely affect a company if valuable employees that are hard to replace leave. Rebecca knows that there are three general factors that affect an employee's decision to voluntarily terminate employment.

First, desirability of leaving is an important factor. Some employees will find it desirable to leave because they find their work or work environment dissatisfying. On the other hand, some may find it desirable to leave for reasons that really aren't related to jobs, such as having one's first child or having a spouse receive an overseas job offer.

Second, how easy it is for an employee to leave employment is also a very important factor. Most people need to work to provide for life's necessities. If an employee has a set of knowledge, skills and abilities that are in high demand and the labor market is favorable to job applicants, then it will be easier to leave current employment. On the other hand, if an employee's skills are narrow and specific to his current company and there is a high rate of unemployment, it may be pretty tough to leave.

Third, alternatives currently available to an employee are also a large factor determining whether an employee will leave. For example, an employee with highly valuable skills in high demand may be offered a better deal from a competing company even before that employee makes the decision to quit.

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