The Exiting Employee

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I wanted to start a discussion about employees voluntarily leaving, which can sometimes be a surprising loss to the business. During times of economic recovery, employees may leave for what they see as a better opportunity.

How you react as a business owner and the steps you take can help reassure your team and gain a possible opportunity for the future.

Have a plan and process in place

Having a plan and process allows you to better manage the emotional impact on remaining employees.  Your plan and process should contain:

  • A written policy regarding giving notice so that people know what to expect.
    • State laws vary on whether you have to pay earned vacation and other time off.    Have a written policy on what is paid out so that you are not seen as capricious or unfair.
  • A policy on offering or not offering COBRA.
  • Instructions on the transferring of vested accounts (retirement, etc.)
  • A thorough set of questions for an exit interview.  These questions should put the exiting employee at ease and then delve into the reasons for their departure.  Sometimes, an unbiased third-party may be required.
  • A checklist of items to gather from the exiting employee.
  • A plan in place on the best use of time remaining for the exiting employee, or if it might be best to request that they leave earlier than indicated.
  • Know when the last paycheck should be issued.  The requirements vary according to state law.

Be available – Listen without judging

Instead of starting your question with “Why?” ask “How”?  and “What?”  “Why” can put people on the defensive.   How did this new opportunity arise for the employee?  What are the benefits of this new opportunity?

Find out the reasons and evaluate the employee’s behavior first to determine if you can ask them to reconsider.  Are they really excited for this new opportunity?

Make certain about what you can offer or change to make the employee stay.

Is it unrealistic?   Can it be seen as unfair by the remaining team members?

Asking for 2 weeks’ notice or asking for more time

In an “at will” employment relationship, employers and employees can end the working relationship with or without notice. If you think you need more time from the exiting employee, ask for it.  Even if the employee has a starting date at the new employer, it could be modified.

If someone needs to leave right away, have a checklist and a communication method to handle this. You want to know what to do if a person leaves without a resignation letter, leaves their personal property behind or has to be escorted off the property same day.

Confidentiality and non-compete agreements should have been signed when the employee first came on board.  You can ask an exiting employee to sign documentation, but they can refuse.

Return of company equipment, materials and technology.

Be aware that many state laws prohibit the deduction from the employee’s paycheck of lost, broken or unreturned company property.


Analyze the situation calmly and find out what information you can use to make changes for the future.  See this as an opportunity to make things better and/or promote someone on the team, if possible.

This is just an overview. This article is for informative purposes only and is not to be construed as legal advice.  You need to consult your experts, such as human resource consultant, attorney, to be aware of federal, local and state regulations and exceptions.

Mary Dunlap, CFP®
Mary Dunlap Consulting
Pottstown, Pa.

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