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Advantages of lay-off versus resigning?
Old 04-05-2014, 10:19 AM   #1
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Advantages of lay-off versus resigning?

Are there any advantages / disadvantages to getting layed off versus resigning?

And is it better to lay-off someone or ask them to resign?

I know some folks quit out of disgust and usually may not get a severance package while a lay off may come with a severance package.

It may even be illegal to ask someone to resign. But as an employer if the employee offered to resign with a severance packeage, would it make any difference to either the employee or the employer?

I also suppose under some circumstances things may be negotiable. What has been your experience? On both sides … as employer and as employee.

Thanks!
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Old 04-05-2014, 10:35 AM   #2
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I thought and hoped (for a little bit) for a layoff with a severance package. I would have gotten 6 months pay in a severance package. I had to quit on my own instead.
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Old 04-05-2014, 10:45 AM   #3
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In my experience when an employer asks someone to resign they will offer severance to avoid litigation. Even in "employee at will" states litigation can be costly to the employer.

The advantage of being layed off vs resigning is the former would make you eligible for severance and unemployment compensation benefits.

If the employer wants the employee gone they may accept the employee's offer to resign with severance.
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Old 04-05-2014, 02:54 PM   #4
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Advantage to resignation is employment record.
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Old 04-05-2014, 03:09 PM   #5
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I've not been laid off (but furloughed, which is more of a group action). A pleasant resignation and a thanks all around seems to be an advantage.
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Old 04-05-2014, 03:39 PM   #6
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Advantage to resignation is employment record.
This may have been so when layoffs were rare and employment for life was possible. In technology field I have not found this to be a concern.

Most states will not provide unemployment for voluntary termination (resignation), but will for layoff. Also, most layoffs have a termination package, but resignations rarely do.
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Old 04-05-2014, 03:41 PM   #7
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This may have been so when layoffs were rare and employment for life was possible. In technology field I have not found this to be a concern.

Most states will not provide unemployment for voluntary termination (resignation), but will for layoff. Also, most layoffs have a termination package, but resignations rarely do.
Agreed. Layoffs have become so common place that it's not the "red flag" it used to be. Many employers know that a lot of good workers are being laid off without cause and through no real fault of their own. Now if you have a history of being repeatedly laid off an unusual number of times, it may give them pause.
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Old 04-05-2014, 04:25 PM   #8
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Agreed. Layoffs have become so common place that it's not the "red flag" it used to be.
+1

Back in the day when I was a hiring manager, I found that among the pool of " currently not working" candidates, those that had been layed off and those that had resigned (not to go to a new job) were more or less equivalent.

While the "layed off pool" might contain a few candidates fired for attendance or fired for inability to perform the job, the "resigned pool" often contained some real characters. Folks that resigned to backpack around Europe for six months, folks that hated their boss, folks that hated their co-workers, folks whose personalities were incompatible with employment, folks that hated working but had now run out of money, folks that couldn't stand the commute so just stopped commuting, folks who resigned during a divorce thinking their ex would have to pay more alimony, folks that wanted to go back to school but changed their mind, folks that liked to sleep late but couldn't get a 10:00 AM start time, etc., etc. There were a million stories and few of them helped me have confidence the candidate was going to be a good hire. I'd just as soon have heard they were layed off for lack of work.

The real distinction is not layed off or resigned. It is whether you are currently working or not working. If you're not working (hole in the resume), then the question as to why not needs to be answered. I found that folks who were layed off were more likely to have a more plausible, legitimate reason than folks who resigned voluntarily but decided to re-enter the job market.
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Old 04-05-2014, 04:40 PM   #9
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Advantage to resignation is employment record.
A resignation is only an advantage if there is a career supporting reason for the resignation. There are an infinite number of reasons for resigning that would not look like acceptable reasons to a future employer.
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Old 04-05-2014, 04:49 PM   #10
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A resignation is only an advantage is there is a career supporting reason for the resignation. There are an infinite number of reasons for resigning that would not look like acceptable reasons to a future employer.

I think that career could include eventual retirement. It's my impression there are quite a few who did that. You're done, you're happy, you planned, and you feel good about it
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Old 04-05-2014, 04:51 PM   #11
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I think that career could include eventual retirement. It's my impression there are quite a few who did that. You're done, you're happy, you planned, and you feel good about it

Absolutely. After all, "retiring" is just a special case of resigning for folks who spent their lives traditionally employed.

Of course, if you're "retiring," resigning has the disadvantage of likely disqualifying you for severance packages and unemployment benefits as discussed by others.
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Old 04-05-2014, 04:54 PM   #12
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Absolutely. After all, "retiring" is just a special case of resigning for folks who spent their lives traditionally employed.

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Old 04-05-2014, 07:04 PM   #13
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If a person is laid off, they can claim unemployment. If they resign or are fired, they typically cannot do so.
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Old 04-05-2014, 10:52 PM   #14
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This may not be the case for the OP, but for me and my Megacorp job there are some very large advantages to being laid off vs. resigning. All of the following will be provided if laid off, but not in the event of resignation:

1. 6 months of severance
2. 6 months of unemployment
3. 3 months of health insurance
4. (By far the biggest difference if one is age 49-55). If laid off after age 49 one can retire at 55 as a laid off, but still current, employee. This status lapses after 6 years and one becomes a former employee. The effect of this difference on the pension one receives is profound. In my case if I am laid off today at age 54 and then start receiving my pension at 55 my monthly payments would be fully 50% greater than if I simply resigned. Once on reaches 55, however, this distinction vanishes.

All of these taken together result in a "resignation penalty" of several hundred $K - maybe not quite golden handcuffs, but at least silver or bronze, and the reason we have very few folks voluntarily leave the company in their early 50s.
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