Exit Management

 

This blogpost I am going to focus on how companies deal with exit management and what employee separation actually means. There are always coming times when economy faces challenges and society have to adjust with it and usually at the beginning this is a shock for everyone. People are losing their jobs and when times are difficult it might be hard to find replacement. Companies and organizations try to find equal way how to treat their workers in times like this and it always involves many negotiations. 

 

Employee separation happens when the employee leave from the company either voluntarily or involuntarily. It includes both costs and benefits. Costs are quite straight forward like, recruitment costs, training costs and costs from selection phase. Benefits on the other hand are reduced labor costs, replacement of not motivated employees and opportunity for greater diversity. Employee who leaves voluntarily are usually people who want to switch their career path and try something new or the retirees. Involuntarily means that company are facing some issues, usually financial and they have to cut off their costs. This means that companies either use layoff system or terminate the employment contact completely (Mejia Gomez, 2016.)


 

This subject is quite hot topic at the moment because of the situation that we are facing with this pandemic. I personally have experienced effects from this to my employment in forms of long layoffs. The field that I used to work is suffering a huge impact from this pandemic and that’s why the company had to make hard decision and lay off most of the staff because work situation wasn’t normal, and expenses were too high for them. Even though layoff situation is not admirable it is better for employee’s sake rather than getting discharge permanently. 

 

Other good example that I read for this subject was Nokia’s case in 2011. Nokia had major reductions for their staff because they had to close one of their plant in Romania and it affected immediately for their employees by cutting of job contracts internationally. Nokia wanted to ensure their profitability in the future, and this meant that they couldn’t keep all their staff anymore because of the expenses that employees cause for them. As we can see from these articles Nokia used outsourcing as well because it has minor expenses than using their own staff. Labor agreements are different for the outsourced staff than company’s own (Yle, 2011 & 2012.) 


 

Outsourcing is kind of a jackpot for employers because it allows them to use staff how they want and reduce expenses. Hiring own staff is expensive for the companies and it is also very hard to get rid of the employees if situation occurs when it would be needed. By outsourcing companies can gain more flexibility with the outsourced staff and keep productivity still high. Companies will like to cut their operating costs and when having ability to outsource they save enormously (Blog: Benefits of Outsourcing, 2021.)




 

References:

 

·       Blog: Benefits of Outsourcing Staff. URL; https://www.solvereone.com/pages/outsourcing-staff-benefits/. (Accessed 17 April 2021.)


·       Gomez, M. 2016. Managing Human Resources. Eight Edition. Pearson. Chapter 6. 


·       Yle. News, 2011. Nokia cuts 3500 jobs “to ensure profitability”. URL; https://yle.fi/uutiset/osasto/news/nokia_cuts_3500_jobs_to_ensure_profitability/5431070. (Accessed 17 April 2021.) 


·       Yle. News, 2012. Hundreds of Nokia's outsourced Symbian developers leaving Accenture. URL; https://yle.fi/uutiset/osasto/news/hundreds_of_nokias_outsourced_symbian_developers_leaving_accenture/5252177. (Accessed 17 April 2021.)

·       My own exeriences

 

 

 

 

 

 

 

 

 

 

 

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