What To Do When An Employee Leaves Your Company


An employee just told you they’re leaving… now what?  

When you’re running a small business, every employee matters. From hours worked to expertise to having a good time together, each person in your business plays a vital role in your company’s success. That’s why it’s so difficult to manage an employee’s decision to leave.  

When you find yourself in this situation, you’ll be faced with several immediate challenges: What processes do you need to go through to ensure a clean exit from an HR standpoint? How will you make up for the lost man-hours? What knowledge is leaving with the employee, and how can you retain that? Perhaps most importantly, how much time do you have to make the exit as smooth as possible?  

If you’re at a loss on how to hand your employee leaving, don’t be. Here’s what you need to do:  

HR and Documentation: 

One of the most important pieces of information you need to decide upon is the exact date for the employee’s last day.  This triggers a couple important statutory issues, including wage and unemployment reporting to the government, and – most important to the employee – what appears on the final paycheck.  Most states distinguish between voluntary termination (the subject of this article) and involuntary terminations (e.g. having to fire an employee).  Check with your state about how long you have to issue the final paycheck after an employee gives you notice. 

It is generally advisable to have an exit interview with your employee.  Especially if you did not want the employee to leave, you will want to know what factors led to his or her decision so that you can course-correct for existing and future employees.  Was it simply a compensation issue?  Was the work not what the employee expected?  Were there cultural or other issues why they employee did not want to stay?  Even if you had an open communication with the employee, it can be difficult sometimes for people to express concerns in the moment.  Try to create an environment where your employees can talk openly with you so that there are no surprises – including an eventual decision for an employee to want to go elsewhere. 

Although more common in involuntary terminations, you also have to option to have your employee sign a release when they leave.  A release is a voluntary contract stating that the employee will not pursue legal action against your company after they leave.  Especially if you did not have good communication channels with the employee, you do not want to be blindsided by a lawsuit brought later on!  Releases must be made voluntarily, in writing, and – depending on the state – there may be other conditions to consider. 

Accounts and IT Hand-Over:  

If you have a running list of the accounts your employee has access to and the tools you have given them to do their jobs, this is the time to use it. (If you don’t keep lists like this, you may want to consider doing so.) Most business tools will allow you to disable your employee’s account if you’re an administrator on the software, but if your employee uses a shared login, you’ll want to consider changing passwords to restrict future access. Sound extreme? This formality is an important part of closing out their access to perform job functions later on, even if you trust them wholeheartedly. 

Also, be sure that any technology or resources are also given back to the company. Laptops, uniforms, etc., are all things that you should previously have agreed upon whether they’ll be given to the employee or returned upon leaving. For each, double check the condition of the tool upon its return to the company. If an employee is keeping any property or used their own, make sure it is clear that the both physical or electronic workproduct, data, etc. remains property of your company and should be destroyed locally. 

Workload Transfer:  

Transferring the employee’s daily tasks is a less straightforward part of preparing for their exit. It’s likely that your employee works for you because you need their time, their knowledge, or their skills, so simply delegating their to-do list onto your own or other colleagues’ lists won’t work. There are several options that might help you in making this transfer:  

  • If possible, begin your search for their replacement immediately  
  • Consider hiring a short-term freelancer to pick up some of their responsibilities 
  • Research tools that will automate any aspects of their day-to-day tasks (like marketing automation tools) 
  • Use the opportunity to reconsider the significance of their work, whether you could stop this function altogether  

In the best-case scenario, you’ll be able to find a replacement for your employee before they leave, giving them the opportunity to cleanly pass off responsibilities without causing any delay or lag time. If you choose to work with a contractor, a similar strategy will also have significant reward for your business. If you choose not to replace the man-hours, however, involve the exiting employee in the decision-making process for new automation tools or eliminating low-reward parts of their role.  

Knowledge Retention:  

When an employee leaves, there is an inevitable loss of expertise and knowledge, regardless of what type of company you’re running. However, there are several things you can do, depending on the timing of their departure, to help minimize this negative side-effect. 

Involve the employee in training their colleagues or replacement on the key tasks they manage. This is the most clear-cut way to make sure relevant skills remain in your business, but it’s an often-overlooked aspect of an exit plan.  

For more complex roles, you may want to consider having the employee document their processes. For example: if they manage a blog with any design complexities, have them write a document that outlines every action needing when publishing a post. Documents like this will take time to complete, and that will be time that your employee will be punting other tasks, but the reward will far outweigh the one or two items that have to be removed from their to-do list.  

Close Out Their Experience:  

It’s important to make sure your business moves through this transition period as smoothly as possible, but it’s also crucial to walk your employee through this process in a productive, positive way.  As mentioned earlier, the first thing you should do (as mentioned above) is come to an agreement about the exact date of departure and what needs to be accomplished before then. This may include final projects, account handovers, process documentation, and other items.  

If you’ve been using a project management tool, this is when you can get the most out of it. Run through any outstanding tasks and determine what is most important. Set clear deadlines for each task and stay in constant communication about project statuses. This will make transitioning significantly easier for both parties involved.  

Finally, decide on the relationship you hope to maintain with the employee. Are you still willing to be a mentor or coach? Make clear what you’re comfortable with, and extend the offer.  

Above all, keep things positive. Several great books (like How Google Works) reference the severity of the situation when an employee decides to move on and how you can handle it professionally, but the best advice of all is to honor your employee’s decision. You can take the time to explore why the decision has been made, and test the waters to see if you could provide any incentive to stay. However, if the employee is truly ready to leave, you will need to let them go. It’s better if they become a positive alumnus of your company than leaving a bitter taste in their mouths.  



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