Two office colleagues talking on a non-occupied office

What Do You Do When A Key Employee Leaves?

How do you deal when a key employee resigns from the company, or worse, decides to go to your competitor?

For small businesses, the impact of a key employee leaving can be significant. The impact on the business will be are the more obvious if the one leaving is client-facing.

According to HR experts, the best way to handle this is for a business to acknowledge that employees will quit sometime in the future, and that more often than not it would happen without your prior knowledge.

Conducting constant conversation with employees about their goals and dreams is a good idea, but there is minimal effect when this is done in a proper setting in the pretext of a performance evaluation.

As an alternative, maintain some kind of formal system for reciprocal feedback and review and at the same time ensure that you are talking to your team members on a regular basis about what their goals are with their function.

Reasons Employees Leave

Nowadays, people resign from their jobs sooner and more frequently, particularly if they are younger. You’d be disappointed if you expect people to remain with your company for five to 10 years.

In most cases, the main reason why people leave jobs is not because of how they were being paid.

What was discovered during exit interviews is that the key reasons people go is the training and the manner on how they were managed. They were not being given the opportunity to grow and learn, or the way they had been managed was not right.

It was also found that a company making a counter-offer of higher salary to the employee doesn’t work very often. In most cases, when the employee does accept the counter-offer, they still leave within six months anyway.

People look for intangible things from their role, which they get from having constant communication with them about their role.

Uncertain business

The key is to be prepared, if a key person in your organisation is leaving and you can’t do anything about it. Businesses must carry out a risk audit, drawing up the roles and responsibilities of each employee.

Ask yourself what the impact to your business would be if employee X walks out tomorrow? Does this person do a task that only he or she can do? Do they have several clients that need to be informed of their leaving?

The audit will give you a rough summary of the skills and capabilities that you have to take care of in the short and medium term should a key employee resigns.
This will put you in a better spot to come up with a strategy.

An essential thing that you can do if a key employee resigns is to have an exit interview. This can be done by you, but an independent party will most likely obtain more truthful views on an employee’s time with the company.

The next course of action

It can be disturbing when a colleague resigns and you didn’t get the reason for their leaving. This lack of information can result in office gossip, amplifying the complaints the employee may have had. By being open and transparent as much as possible about the reason why the person resigned, you can provide the right information and handle the narrative.

It is also important to have a plan for your next course of action.

Provide employees the information about what you are going to do to handle the person’s leaving. For example, you can inform them on when the employee’s last day in the office is, when you will begin the hiring process for the replacement, or the date you expect to have a new person on board.

Lastly, if the employee is leaving to take a post with a competitor, make sure to run by them again any IP protection or confidentiality provisions in their contract. While not offering full protection, this would protect you in some ways.

After all of these, don’t forget to rally the troops. Any time that something bad happens in the business, getting people together is crucial. This may even allow you to give someone else the chance to fill the void left the by employee’s resignation.

If you are in need of accounting and other related services, contact PJS Accountants. We offer accounting and other bookkeeping services to individuals and companies, big and small. Allow our team to evaluate your business and advise you on the right measures to create an excellent financial management strategy for you.