Voluntary Termination
What is voluntary termination?
Voluntary termination is when an employee chooses to resign or leave their job of their own accord. This decision is typically made without any pressure from the employer and it can occur for various reasons, such as pursuing a new job opportunity, changing careers, relocating, or retirement.
Unlike involuntary termination, where an employee is dismissed by the employer, voluntary termination is initiated by the employee. This process usually involves the employee providing notice to their employer, as per the terms of their employment contract.
Voluntary vs. involuntary termination
| Voluntary termination | Involuntary termination | |
| Definition | When an employee chooses to leave the organization on their own accord | When the employer decides to end the employment relationship, often with cause |
| Common reasons | Resignation, retirement, pursuing other opportunities | Poor performance, misconduct, redundancy, organizational restructuring |
| Severance pay | Generally not applicable, unless stipulated by contract or company policy | Often provided, especially in cases of redundancy or layoff |
| Unemployment benefits | Usually not eligible, as the decision to leave was voluntary | Often eligible, subject to local employment laws and specific circumstances |
| Legal considerations | Generally straightforward unless contract breaches occur | Risk of legal challenges or claims, particularly if termination is not handled lawfully |
Voluntary severance package and unemployment benefits
Severance packages and unemployment benefits are most commonly associated with involuntary terminations, such as layoffs or downsizing. These packages are designed to compensate for the sudden loss of employment and ease the transition for the affected employee.
In contrast, when an employee chooses to resign or leave their job voluntarily, they typically are not entitled to these benefits, as the departure is on the employee’s own accord.
Reasons for voluntary termination
There are numerous reasons why an employee might choose to leave a company voluntarily, and these reasons can vary widely depending on individual circumstances, career goals, and personal life. Some common reasons include:
- Career advancement opportunities: Many employees leave their jobs seeking better opportunities, more challenging roles, or a career change that offers growth and advancement prospects.
- Higher compensation: One of the reasons for leaving a job is the desire for a higher salary. Employees often find that the most effective way to increase their income is by moving to a new company.
- Job dissatisfaction: Unhappiness with the current job due to factors like lack of recognition, limited growth opportunities, uninteresting work, or disagreement with management or company policies can lead to someone voluntarily changing jobs.
- Educational opportunities: Pursuing further education is a common reason for leaving a job. This could be for higher education like a master’s degree or PhD, which opens doors to more advanced career opportunities.
- Retirement: Retirement traditionally occurs when an individual reaches a certain age or career milestone and decides to step back from active employment.
How should HR handle a voluntary termination?
When an employee decides to voluntarily terminate their employment, it’s crucial for the HR department to handle the process professionally and efficiently. Here’s a step-by-step guide on how HR should manage a voluntary termination:
- Receiving and acknowledging the resignation: This usually involves the employee submitting a resignation letter or email, and HR acknowledging receipt of the resignation.
- Conducting an exit interview: An exit interview is a valuable opportunity for the organization to gain insights into its work environment, culture, and processes. Questions should focus on the employee’s motivation for leaving, their experience working for the company, and any suggestion they might have for improvements.
- Managing final pay and benefits: Make sure that the employee’s final paycheck is processed, including any accrued vacation or sick leave. Also, provide information about benefits continuation or termination, as per company policy and legal requirements.
- Retrieving company property: HR is responsible for ensuring that all company property is returned. This might include items like ID badges, laptops, mobile phones, or any other equipment or materials provided to the employee.
- Announcing the departure: Communicating the employee’s departure should be done in a way that respects their privacy while also keeping the team informed. The announcement can be made via email or in team meetings, depending on the size and structure of the organization.
- Continuous improvement: Use the experience of each voluntary resignation as a learning experience. By analyzing exit interview data and the termination process, you can identify trends, issues, or opportunities for improvement in the organization.
HR tip
To prevent voluntary terminations, HR professionals should focus on creating a welcoming and engaging work environment that addresses key factors influencing employee satisfaction and retention. Regularly conducting stay interviews, offering competitive compensation and benefits, providing opportunities for professional growth and development, and fostering a supportive and inclusive company culture are essential strategies.
FAQ
The voluntary termination process typically involves the employee submitting a letter of resignation to their manager, stating their intention to leave the job and their last day of employment. An exit interview may be conducted to provide feedback about their experience with the company. Overall the process allows an amicable separation initiated by the employee’s own choice to leave the organization.
Voluntary termination and resignation are often used interchangeably, but they can have slightly different connotations. Resignation tends to refer more specifically to the formal process of notifying the employer, usually in writing, that the employee intends to leave their job, while voluntary termination can refer to the overall decision by the employee to end their employment.
A “no call, no show” incident, where an employee fails to report to work and doesn’t notify their employer, is not automatically considered voluntary termination. However, if such behavior continues without a valid reason, it may be interpreted as job abandonment, which is a form of voluntary termination.
