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Updated Jan 03, 2024

What to Do When Your Best Employee Quits

While every staff member plays an essential role, losing one good employee can impact the entire company.

Tejas Vemparala headshot
Tejas Vemparala, Business Operations Insider and Senior Writer
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Excellent workers know they are valuable. When your best employee announces they plan to leave your company, there are many factors involved in that decision. It could be that they’ve found another company that appreciates their input or they are finding their current tasks not challenging enough. Ultimately, your best employee will leave one day, as that is the nature of employment. 

Your top employee leaving might cause panic, confusion or a drop in motivation among your team. After all, your best worker played an essential role. Losing such an employee can impact the entire small business or create a big gap in a large company.  

“Losing a valuable employee is always painful,” said Chris Sier, ICF-credentialed executive coach and owner of Executive Potential Plus. “When they leave, their experience, skills and overall knowledge also leaves with them.”

What to do when your best employee leaves

While no one wants to see an excellent worker leave, in order to make the transition run smoothly, employers must handle resignations in a professional and legally compliant manner. Here’s how to proceed when an important employee decides to quit.

Thank them.

People like to receive acknowledgement that they did a good job. Excellent employees know they are valuable, and they sometimes feel that they never received verbal appreciation. Thanking them for what they gave to your small business or to your team will go a long way.

Make sure to commend the hard work they put in, and coordinate with the other employees to show them appreciation from the entire team. This will go a long way in the future; you never want to burn any bridges.

Key TakeawayKey takeaway
Showing employees appreciation in small but meaningful ways can avoid top talent from leaving.

Stay calm.

When one of your best staff members quits, the worst thing you can do as an employer is to lash out at them. “People rarely appreciate a ‘how can you do this to me?’ scene when they first give their notice,” said Chuck Post, chair of the Labor and Employment group at the Weintraub Tobin law firm.

The best thing to do is to remain calm and ask the employee why they are planning to leave, Post said. While it’s not good to demand information or to put the employee in an uncomfortable or high-pressure position, you may be able to learn something that will help you craft a counteroffer or find another means of retaining that person.

Issues might range from a lack of growth opportunities to poor management. Some might be fixable, while others aren’t specifically related to your company. Consider the best way to address the situation given the employee’s explanation; dig deeper than the surface.

“People may think offering more money will solve anything, but … money only works for a very short time and doesn’t address an overall sense of unhappiness,” said Sier.

Regardless, be considerate of their decision. If they insist on leaving, be cordial, wish them well, and ask them if they’ll stay for an appropriate amount of time to make a transition (usually two weeks).

Review your legal obligations as an employer.

If the employee decides they are definitely leaving the organization, the next step is to make sure you’re in compliance with all employment laws concerning termination.

“Legally, termination of employment can be a source of liability,” said Post. “It is prudent … to ensure that the employer has fulfilled all mandated end-of-employment obligations.”

Post noted that the legal obligations owed to a departing employee are as follows:

  • Pay all accrued wages.
  • Disburse any accrued benefits that must be paid upon termination (either under law or company policy), or document the employee’s non-entitlement to said benefits.
  • If applicable, account for and establish a schedule for commission or bonus payments that will be made after the termination. This is usually governed by law and the terms of bonus and commission plans.
  • Provide the employee with the required legal notices (COBRA benefit continuation, unemployment and workers’ compensation notices, etc.).

If the employee has signed confidentiality notices, noncompete/nondisclosure agreements or other legal documents protecting your company’s intellectual property, these should be reviewed as well so that both you and the employee are clear about the terms of these agreements once they leave the company.

Conduct an exit interview.

Holding an exit interview, whether face-to-face or via email/online survey, is more than a way to gain insight into an employee’s personal experience with your company. When you speak with a departing staff member, you also take an important step to tie up any loose ends and potential problems down the line.

“Employers should take reasonable and lawful actions to ensure that all that leaves the company is the employee, and not information or customer relationships,” Post said.

During the interview, Post advised confirming and documenting that the employee has returned all company property; that they have not taken, copied or transmitted any intellectual property or sensitive company information; and that they are aware of any continuing obligations not to use or appropriate your company’s business information.

Your exit interview can also help you shape your strategy for the future of that particular position.

“There can be an effect on morale to consider,” said Sier. “If the person leaving is unhappy, the team may also be unhappy. Implementing change based partly on feedback by the outgoing employee and conversations with the team is essential in creating a better workplace environment and a stronger team.”

Here are some questions to ask and formally document in the exit interview, outlined by Sier:

  • What are your reasons for leaving the company?
  • What did you like about the company?
  • Are there things the company should do differently?
  • What did you like about your job?
  • What didn’t you like?
  • What was your relationship like with your supervisor?
  • What could your supervisor have done differently?
  • Were your expectations met with the goals you were given?
  • Were your goals clearly stated and measurements given on what constituted achievement?

Find a way to fill the gap.

Whether you’re planning to directly replace the departing employee or changing someone else’s role internally, you’re going to have some gaps to fill. But hiring the first new candidate who expresses interest may not be the best solution, despite the immediate, perceived benefits to your company.

“Create development plans for the team according to their goals in alignment with the goals of the organization,” said Sier. “The important thing is to ensure follow-through of those plans.”

You should also develop a succession plan to prevent the same issue in the future. That way, the position can easily be filled temporarily or permanently, even on short notice, said Sier. Maybe your employee who is leaving has a recommendation or has worked with someone in the past who can fill their spot.

Recruiting and hiring top talent

Replacing a talented employee is not easy. While there are plenty of qualified candidates, a new employee needs time to gain the skills, knowledge and cultural understanding that the top employee who just left had. Here are some potential ways to replace such top talent:

Promote from within. 

In some roles, cultural fit is just as important as skills and knowledge. In these scenarios, consider an internal hire for the role. Maybe a top candidate from another team is looking to change their responsibilities and wants to try something different at the company. Other employees in your small business might know how to do the task that your former employee did, and it is only natural to recognize their skill sets and reward budding talent with a promotion.

TipTip
Employees should know how to grab their boss’s attention and get the job they want. Here are six proven ways to get a promotion.

Develop an effective job description before external hiring.

Understanding exactly what your top employee did will be important when you are looking for a new candidate. If that employee went above and beyond their scope of duty, make sure to include those tasks in the job description, with appropriate pay for that extra work. It’s usually easy to notice these tasks after the top talent has left your team. 

Spreading out those jobs among your team can lead to burnout, reducing your team further. There may be instances where a top employee cannot be replaced by one individual and you’ll have to consider hiring multiple candidates.

Use an external hiring company.

If you are a small business with no HR team, as the manager or owner, you may not have time to spend on hiring. In this case, your best employee leaving creates extra work for you. Using an outsourced HR team or professional employer organization (PEO) will take up fewer hours and be a better investment for your team. [Read related article: The Best PEO Service Providers of 2024]

For a breakdown of the most common pricing models and benefits based on the type of employee you are looking to get, see our reviews of the best HR outsourcing companies.

An excellent company culture attracts top-notch people.

Building a good working culture takes time. When a top employee leaves, it might be because your current environment does not entice them to stay. Understanding why they are leaving is important, and thanking them for their quality work provides an avenue for top talent to return in the future. 

Finding another candidate to replace that important employee is often difficult, but sometimes having an internal worker fill that role is good for continuity. For certain situations, using third-party companies to find a replacement is best for the business. No matter what the hiring process is, though, a business should continue improving its climate. After all, an excellent working culture not only attracts but also keeps top talent.

Additional reporting by Sammi Caramela and Nicole Fallon. Some source interviews were conducted for a previous version of this article.

Tejas Vemparala headshot
Tejas Vemparala, Business Operations Insider and Senior Writer
Tejas Vemparala is an operations coordinator and analyst who specializes in recruiting and hiring candidates for open positions in small businesses in New York City. In his role, he actively seeks out top talent to support local entrepreneurs as they grow their businesses. Tejas understands the challenges small business owners face firsthand as a former food truck owner and operator, where he focused on providing fast casual Indian cuisine to communities throughout the five boroughs. Tejas holds a dual-degree in economics and marketing and imbues his advice to small businesses with his extensive expertise in these areas.
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