The paths from insider to outsider: A review of employee exit transitions

• Author: Yiduo Shao,Melanie K. Prengler,Anthony C. Klotz,Brian W. Swider
• Published date: 01 January 2021
• DOI: http://doi.org/10.1002/hrm.22033
• Date: 01 January 2021

ORIGINAL ARTICLE

The paths from insider to outsider: A review of employee exit

transitions

Anthony C. Klotz

1

| Brian W. Swider

2

| Yiduo Shao

2

| Melanie K. Prengler

1

1

Department of Management, Mays Business

School, Texas A&M University, College

Station, Texas

2

Warrington College of Business, University of

Florida, Gainesville, Florida

Correspondence

Anthony C. Klotz, Department of

Management, Mays Business School, Texas

A&M University, College Station, TX, 77843.

Email: aklotz@mays.tamu.edu

Abstract

Employees' roles as organizational members often do not end immediately after they

have made the decision to leave or it has been made for them. Instead, this decision

serves as a turning point initiating an exit transition process. The purpose of this arti-

cle is to consolidate prior scholarship in order to gain an understanding of the state

of the science, as it pertains to exit transitions. Our literature review yielded almost

200 articles that have directly or indirectly studied the exit transition process. In

organizing the insights from these studies, four categories of exit transition scholar-

ship emerged—exit transitions in the context of voluntary turnover, involuntary turn-

over, temporary transitions, and top management exits. Moreover, our review

indicated that exit transitions are shaped by three critical forces—the permanence of

the transition, the magnitude of the identity change associated with the exit, and the

organizational impact of the exit. We review research on each of the four categories

and show how each type of transition is shaped by these forces. Finally, we turn our

focus to the future of work and discuss how changes in the way that work is struc-

tured may alter the study of employee exit transitions in the future.

KEYWORDS

careers, downsizing, turnover

1|INTRODUCTION

At the start of 2020, unemployment rates in the United States and

other countries were at historic lows, creating a robust job market

(Casselman, 2020). As a result of the high demand for labor,

employees had the flexibility to leave their jobs and find new ones if

desired, resulting in high levels of voluntary turnover (Hess, 2020). A

few months later, however, COVID-19 caused a slump in the world

economy that led to historic numbers of jobless claims worldwide,

indicating that many employees had been involuntarily separated from

their jobs (Nebehay & Mutikani, 2020). One commonality among

employees' experiences at both of these ends of the job market spec-

trum is the exit transition. That is, employees departing from a com-

pany go through the process of separating themselves from their role

as employees in a given job at a given firm. This process even occurs

when exits are temporary, such as in the case of voluntary leaves of

absence or involuntary furloughs (S. Lee & Sanders, 2013). Although

compounded by the exogenous shocks such as those caused by the

COVID-19 pandemic, exit transitions are common even in stable eco-

nomic times. Moreover, other economic forces, such as firms' increas-

ing use of independent contractors, suggest that exits will continue to

displace workers in the coming decades. Indeed, as a result of reduc-

tions in the commitment between firms and employees, job roles are

now treated more like “tours of duty”rather than enduring employ-

ment contracts (Hoffman, Casnocha, & Yeh, 2014). Thus, the exit tran-

sition is a widely experienced and increasingly common organizational

phenomenon.

Any turnover event involves two distinct features—the decision

to leave, which may or may not be made by the departing

employee(s), and the process of leaving. Whereas most research

examining the turnover process has focused on the former, the focus

of this article is on the latter, which we refer to as the exit transition.

DOI: 10.1002/hrm.22033

Hum Resour Manage. 2021;60:119–144. wileyonlinelibrary.com/journal/hrm © 2020 Wiley Periodicals LLC. 119

To be clear, most turnover research has focused on the turnover deci-

sion and its antecedents because they are of the utmost practical

importance to both employees and organizational leaders (D. G. Allen,

Bryant, & Vardaman, 2010). Nonetheless, there is more to exiting a

job role or an organization than simply deciding to leave or to be let

go. Once an employee makes the decision to leave or becomes aware

that their employment will end, a transition process from organiza-

tional insider to outsider begins. Sometimes this process occurs simul-

taneously with the decision to leave, such as when one is fired, walks

off the job, or more drastically, passes away. More often, though, the

exit transition takes weeks, months, or even years. Indeed, for aca-

demics in business schools, notice periods of up to a year are com-

mon. Moreover, although separations between employees and firms

are often meant to be permanent, employees also go through exit

transitions when they leave their job role for temporary but extended

periods. The preparation associated with temporary transitions,

whether for an international assignment, maternity leave, or a sabbati-

cal, can require substantial planning and navigation similar to perma-

nent exits. In sum, exit transitions occur whether an organizational

separation episode is fast or slow, voluntary or involuntary, or perma-

nent or temporary.

Beyond being a common element of organizational life, exit transi-

tions are meaningful moments for employees and organizations. For

employees, exit transitions represent a unique liminal space in their

careers in which they are still employed in one role, they know that they

will soon exit that role, and those around them may or may not be aware

that the transition is taking place. Although role exits are relatively

uncommon events over the course of one's career, they are disruptive

moments rife with uncertainty, which can have long-term effects on

employees' work and non-work lives. For organizations, which seek to

motivate employees to commit to their work roles, exit transitions also

take on importance given that they represent periods in which

transitioning employees are actively disengaging from their roles, some-

times against their will. In terms of sustaining organizational functioning

across employee departures, then, exit transitions represent high-stakes

situations for leaders. Given the potential for disruption wrought by dis-

gruntled employees, disengaged employees, or even employees who are

simply unsure of how to handle the transition, understanding the dynam-

ics associated with exit transitions is highly relevant to organizations.

Because of the practical importance of exit transitions, organiza-

tional researchers have explored this transition process from a variety

of perspectives. Yet, the study of exit transitions has been asymmetri-

cal, with areas like retirement and expatriation being deeply studied

for decades, while transitions associated with most other exits receiv-

ing relatively shallow and dispersed focus. In addition to the uneven

nature of prior research, a problematic fragmentation exists in the lit-

erature whereby insights from studies on specific exit transitions are

infrequently applied to or used to better understand other types of

transitions. This unbalanced coverage in the exit transition literature

also stands in stark contrast to the body of knowledge amassed on

transitions at the beginning, as opposed the end, of employee role

cycles. Indeed, the “entry transition”process (also referred to as

socialization or onboarding), wherein employees move into new work

roles, has been extensively studied by HR researchers. With multiple

reviews and meta-analyses on this topic, researchers have facilitated

the development of a coherent and comprehensive body of knowl-

edge concerning the nature, antecedents, and consequences of such

“entry transition”process (T. D. Allen, Eby, Chao, & Bauer, 2017;

Klotz & da Motta Veiga, 2018). As a result, we have a much better

understanding of how employees begin new work roles than how

they exit those same roles. Given the importance of role exits to indi-

viduals and firms, this imbalance requires recalibration. Therefore, the

purpose of this review is to take stock of the body of work on exit

transitions, organize it, and highlight strengths in our understanding of

this process as well as deficiencies that represent fruitful opportuni-

ties for future scholarship.

2|BOUNDARIES OF EXIT TRANSITIONS

Role transitions have long been of interest to management

researchers. In addition to examinations of transitions into a new

work role (Ellis, Bauer, & Erdogan, 2014), daily transitions between

work and nonwork domains have been examined for decades

(Edwards & Rothbard, 2000) and continue to be a robust area of

inquiry (Avgoustaki & Bessa, 2019). It is important to note that role

transitions can be either interrole, which involves movement from one

role to another, or intrarole, which entails adaptations within an exis-

ting role (Louis, 1980). As we are interested in transitions out of orga-

nizations, we specifically focus on interrole transitions. In doing so, we

situate exit transitions within Ashforth's conceptualization of

employee role transitions, which he constrained to “movement

between sequentially held roles”(2001, p. 7).

We are particularly concerned with the interrole transition process as

it applies to employee exit. In her seminal work on this topic,

Ebaugh (1988) developed a grounded model of voluntary role exit that

involved four stages—first doubts, seeking and weighing alternatives, the

turning point, and creating an ex-role. Ashforth (2001) extended this

model to the domain of involuntary exit, proposing that the four stages

would still occur, only in a different order, with the turning point coming

first, followed by doubts, consideration of alternatives, and finally the ex-

role phase. The management literature has given considerable attention

tomostoftheemployeeexitstages.Regarding first doubts, researchers

have studied how employees begin to withdraw from work even before

they have cognitions related to turnover (Hom, Mitchell, Lee, &

Griffeth, 2012). Likewise, the process in which employees seek and weigh

alternatives has been the focus of research on both turnover (Boswell,

Zimmerman, & Swider, 2012) and job search (da Motta Veiga, Turban,

Gabriel, & Chawla, 2018). Regarding creating an ex-role, the careers litera-

ture has deeply examined the consequences of role exits (i.e., career tran-

sitions, Sullivan & Al Ariss, in press). Our understanding of the turning

point, however, has been slow to develop and has advanced in an uneven

manner, leaving us with deep wells of knowledge of how exit transitions

occur in some contexts but shallow pools in others.

To summarize, this review is focused on one phase of the

employee interrole exit process—the turning point phase—which we

120 KLOTZ ET AL.