Handling Employee Resignations

Last Updated Feb 28, 2007 1:14 PM EST

The era of lifetime employment in one company is over. In one poll, 100% of the respondents said they expect to change jobs “every few years.” Even in the so-called “best companies to work for,” it’s proven hard for any business to guarantee employment to anyone for a lifetime; more than that, many employees grow restless and want to change employers. Companies need to be prepared to handle the movement of employees out of their organizations in an efficient, professional manner, since resignations, especially of key employees, can disrupt the smooth operation of business.

Losing key people is a disappointment, but a company then has an opportunity to make changes that will make it more productive.

What You Need to KnowOne of my key employees has just resigned. How can I tell his team and maintain their morale?

There are a number of things to think about. It’s best to meet with the whole team, including (if possible) the employee who has resigned, to convey information and discuss the future. Ask for team members’ input as well as their reactions, so that they have a sense of control of the situation. You can then discuss resources and changes in the operation of the team that can improve its functioning.

When one of the key employees in my group resigned, the whole team followed. How can I keep this hemorrhaging of talent from happening again?

This mass exodus necessitates your examining work conditions and processes. It gives you the opportunity to identify and solve problems of which you may not have been aware. Do your competitors offer better salaries or benefits? Are company policies adversely affecting this group? Is the problem your management style? Exit interviews conducted by a third party will give you insight into the situation. You can then involve the remaining staff in planning changes to correct and improve the situation. Your employees may also be able to suggest others inside the organization to replace those who resigned. What’s critical is that you have to regroup as soon as possible with a major focus on building a new cohesive team.

A member of my team has expressed interest in leaving full-time employment to work with us on a project basis. How should I respond?

Your decision should focus on the relative costs and benefits of this new situation. Using contract workers cuts payroll costs, since contractors no longer receive health insurance, vacation pay, etc., from the company. Contract employees will often charge more for their services than they previously received in salary, however. If the contract worker will be working with other companies, you also need to insure that the she will be available when you need her. A clear statement of work can insure that there is no ambiguity about how responsibility will be assigned and how the team will work together. You also need to make sure the employee signs a confidentiality agreement, especially if he or she plans to work with a competitor. If your company does not have existing contracts for new contractors, there are many samples online.

I accepted the resignation of someone I am glad to replace. He changed his mind, however, and now wants to stay on the job. What should I do?

If you feel that this individual is not an asset to your team, you are within your rights to deny his request to stay, although it’s always wise to be sure this posture is consistent with company policy. However, if you feel that he can be a contributor somewhere else in the company, suggest that he check out other opportunities with the human resources department.

What to DoBe Prepared

A certain amount of turnover can be expected in any company, as employees change jobs, leave the workforce, or move to other cities. Handling their departures in an efficient, professional manner reflects well on your company’s reputation. Processing a resignation requires specific steps to comply with policy and legal requirements. A sudden increase in resignations may be a warning sign that policies and procedures in your company should be re-examined. Make sure you access some kind of checklist to deal with resignations, expected or not.

Establish a Resignation Process

Your employee orientation meeting and handbook should detail the steps in the resignation process. An employee should submit a formal letter of resignation to his or her supervisor, and a copy of the letter should be forwarded to the human resources department so the process of removing the employee from the payroll and preparing a new job listing can begin.

Confirm the Departure Date

The period of time between formal notice of resignation and departure date may vary according to the position and seniority of the departing employee. If the employee wants to negotiate an early departure, you need to consider your existing resources and the pending work. If the schedule permits, you may be willing to go along with the request. Special requests should be handled by your Human Resources department.

Plan the Transition

The employee and his or her manager should jointly develop a plan for the smooth transition of projects and responsibilities. Others involved in a project should be included in the transition discussion.

Such a plan will include briefing co-workers, tying up administrative loose ends, and perhaps initiating training in areas where special skills are required. If the employee isn’t going to be replaced, the person’s responsibilities need to be reallocated.

If the employee who is leaving has developed relationships important to the organization (for example, personal relationships with clients or suppliers), you need to plan for continuity. Having clients or suppliers meet with the employee’s replacement, perhaps with the departing employee present, can help maintain continuity in key relationships.

Conduct an Exit Interview

Exit interviews should be conducted by a third party, usually a member of the human resources department. The interviewer should ask departing employees to discuss their job, their reasons for leaving, and any other subjects of concern to them.

Exit interviews can reveal company policies or practices that should be reviewed, and, consequently, they provide an opportunity to change the company for the better.

Keep In Mind Other Considerations

An employee may be asked to leave the premises immediately, if, for example, he or she has access to confidential company information. Non-compete agreements may also be negotiated, which forbid the employee from working for competitors or in the same line of work for a specified amount of time. In these cases, a severance package is designed that both the company and employee agree to.

What to AvoidYou Take the Resignation Personally

An employee’s resignation does not mean that he or she is disloyal to the company or supervisor. Although the situation may be distressing to you, try to be objective when talking to employees about their leaving.

You Procrastinate

Ignoring someone’s imminent departure will cause disruption down the line. All of those affected by an employee’s leaving need to work together to create a smooth transition.

You Show Disrespect

It is disrespectful to the departing employee to show happiness that he’s leaving, no matter how difficult it has been to work with him. Behave with professionalism from the moment you receive the resignation throughout the exit process. After all, you may be working together again some day.

Where to Learn MoreBook:

Bliss, Wendy and Gene Thornton. Employment Termination Source Book: A Collection of Practical Samples. Society for Human Resource Management, 2006.

Web Site:

Employment Ending Checklist: http://humanresources.about.com/od/whenemploymentends/a/end_employment.htm