What to do when an employee resigns

When an employee resigns, it can blindside a smoothly running team. Leaders can feel hurt, even betrayed, by the resignation of a longtime employee.

Even if the resigning employee is someone you especially trusted, who was particularly reliable, or had particular skills, the truth is, no employee is irreplaceable. If this is someone you turned to often, start thinking about who on your team is eager for more responsibility. If no one on the team has the skills needed for the job, maybe you should consider offering members of your team opportunities to master new skills. 

The resignation of a good employee is a shock and a disruption, but it could also be the prompt to reevaluate how your team is organized. You’ll probably need to hire a replacement, but first take a fresh look at the team.

Pro Tip

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Begin assessing immediately

The key question when an employee resigns is whether you really need to replace them. Could you reapportion the work the departing employee did? Instead of hiring another person, would it make more economic sense to give raises or offer bonuses to your team for taking on the departing employee’s workload? This could be a win-win for the company and the employees, and is worth exploring, even if you ultimately conclude that you do need to hire a replacement.

Hiring is among the weightiest decisions leaders make. This could be your chance to make an offer to a competitor’s star salesperson or to further diversify your team. Think strategically about hires. Many companies are continuously recruiting by welcoming resumes and participating in job fairs and career day activities. Those companies are best positioned to quickly, and confidently, fill an unexpected opening.

Have an HR process ready to go

If you’re hiring talented people, it’s inevitable that at least some will eventually leave for other opportunities. Don’t take it personally, and be ready when it happens. It’s important to properly process the departing employee’s termination to avoid any legal problems

Even if the employee is leaving on good terms, make sure that they submit a signed and dated resignation letter that stipulates they are voluntarily terminating their employment and their reason for doing so. 

An employee who doesn’t state their reasons for leaving might be positioning themselves to claim “constructive discharge” — which is when an employer makes the job conditions intolerable to compel a person to quit. This could qualify the employee for unemployment insurance payments or position them for a lawsuit. 

Ask the employee to make it clear that they aren’t claiming any discrimination or alleging the workplace has a hostile environment.

It’s best to close the loop by confirming receipt of the resignation letter. The Jotform Resignation Confirmation Letter template provides a good starting point for your letter.

Final paycheck and cashing out benefits

The final paycheck is often for a much larger amount than a normal paycheck. That last check can include 401(k) and IRA money (if the employee chooses not to roll over the money into other tax-sheltered accounts), bonuses, commissions, expenses, loans, and accrued vacation and leave days.

The deadline for making the final payment to a departing employee varies by state. California law mandates payment within 72 hours of receiving notice from the employee. Colorado, New York, and Texas mandate payment no later than the next regular payday. Make certain your legal department consults with HR to keep everything within the law.

Depart on good terms

When you think of your brand, you likely think about how your customers perceive your company and its services or products. However, you also have an employer brand. Given the fierce competition for critical talent, take every opportunity to burnish your employer brand. Treating a departing employee well is just such an opportunity, regardless if their resignation stung or if you’re secretly glad to see them go.

Ask how they want to break the news to the team. Hold an exit interview, which is a good opportunity to discreetly collect their laptop, keys to the office, and all the other company property in their possession. Ask why they are leaving. It might be for a better offer, but it also might be for personal reasons, such as moving far away or to accommodate changes in their home life. Everything they tell you will give you insight into your company from the employee perspective.

If they’re leaving for more money, resist any impulse to counteroffer. The money will be better invested on incentives for your remaining team when you inevitably meet to discuss reallocating the work left behind by the departing employee.

A going-away party is an opportunity to graciously thank the departing employee for their work while doing something nice for the remaining team members who will be doing extra work until a new hire is made.

Limiting the disruption when an employee resigns requires a sound HR plan for the employee’s departure and a deep bench of potential job candidates.

Want the full rundown on the topic? Check out the complete guide we created on human resource management.

Peter Page is a professional writer whose career began in print. He has worked with hundreds of entrepreneurs and business leaders as an editor at Entrepreneur.com and Green Entrepreneur. He is now editor for contributed content at Grit Daily News.

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