Everything You Need To Do When An Employee Leaves Your Business

Bryan Brown | 21 February 2022 | 2 years ago

What to Do When an Employee Leaves Your Business

When an employee leaves your business, it can be a difficult time. There are many things to consider, such as what caused them to leave and what you need to do to ensure a smooth transition. Most importantly, you will need to make sure that you tick all the legal boxes when they leave and that you protect your company from any potential issues.

In this article, we will discuss exactly what to do when an employee leaves your business. We will also offer some tips for recruiting top talent so that you can quickly find the right replacement.

Ask Why They Want to Leave

When someone hands in their notice, you need to ask them why they are leaving the company and what the reasons for resigning are. This will give you a chance to understand what you can improve for the future, and it may help you to retain other members of your team in the future. There are lots of things that could be causing them to leave, including:

  • A lack of career opportunities
  • Unrealistic targets or workloads
  • They don’t feel appreciated by you or their colleagues
  • The company culture is not a good fit
It may be that you can resolve the problems and persuade them to stay with your business. However, if it’s too late for that, then you need to ensure there are no hard feelings when they leave. For example, an employee who feels like they were not appreciated may leave with a bad taste in their mouth and criticise your company to other potential employees. This is why it’s important to try and end the relationship on amicable terms if that is what you both decide.

Offer New Terms

Once you know the reasons why your employee wants to leave, you can also ask them if there is anything you could do with their job role or contract that would convince them to stay. For example, this may involve offering more flexible working hours if they are struggling with their current hours or a pay rise if they feel they are not being paid enough.

If they are leaving because of the company culture, then you could try and change that with new policies or by hiring or retraining managers. Of course, it may be the employee themselves who is the issue in which case it is better to just wish them luck and let them go.

If the employee is leaving to take on a new job role, you may be able to offer them a counter-offer that is more lucrative than their current one. However, it’s important to note that this may cause other members of your team to become disgruntled if they feel that you are not offering them the same opportunities.

Accept their written notice

Accept their Written Notice and Arrange the Notice Period

When an employee gives notice, it is legally required for you to accept it in writing. You also need to arrange the notice period, which is the amount of time they are required to work before leaving.

If you have an employment contract in place, then it will likely state the notice period that is required. If there is no contract, or the contract does not state a notice period, then you should have a conversation with them to work out what is best for both parties.

It may be that you want to waive the notice period altogether so that you can find a replacement for their position as quickly as possible. Alternatively, you might want them to stay until the end of the notice period so that they can train up their replacement and ensure a smooth transition. Whatever the case, it must be an agreement between you and the employee and it must be put in writing.

Pay Your Employee any Outstanding Pay

When an employee leaves, you need to ensure that you pay them any outstanding money that they are owed. This includes their final salary, holiday pay, and any other benefits that may be due to them. It is illegal to refuse to pay an employee when they leave, so you need to make sure that everything is sorted out before they walk out the door.

However, if your employee refuses to work their notice period, then you do not need to pay them for that time. In this situation, it is best to speak to a lawyer so that you know what your next steps should be. Your former employee may attempt to take legal action against you for not paying them, so you must ensure that you are doing the right thing.

Notify HMRC

When an employee leaves your business, it’s important to let HMRC know within a month of their departure date. You should do this using form P45. This is a document that shows their gross pay, tax and National Insurance contributions for the year to date. It is a legal requirement for you to provide your employee with a P45 once they leave your business, so make sure that this is something you arrange before they go.

Your former employee will need this form to give to their new employer so that they can pay the correct amount of tax. If you do not provide them with a P45, then your ex-employee could be fined by HMRC for failing to supply it within 14 days of leaving.

You can find more information about how to arrange form P45 on the government’s website.

Arrange an Exit Interview

Exit interviews are a great way of finding out why people are leaving your business. Unlike your earlier discussion, it may be better if this is conducted by someone who was not the employer’s direct manager or superior so that they are more likely to open up about exactly why they want to leave.

Again, the information that you gather during these interviews can help you to improve the way things are done in future and may help retain some of your other employees who were thinking about leaving too.

It may be that the employee opens up about a reason they had not previously divulged. If this is the case, you could use it to try and negotiate a different outcome with them. For example, they may have expressed dissatisfaction with their working hours or location but if this is something you can change then it’s worth considering as an option.

If they still want to leave, make sure you tell them that the door is always open if they change their mind (if this is the right move for your business).
provide a reference

Provide a Reference

Once your employee has left, you should provide them with a reference. This document will state the employee’s job title, start and end dates of employment, and their key strengths and attributes.

It is best to give your employees a reference as soon as possible after they have left your business so that there are no delays in finding new work. You should also make sure that the reference is accurate and up-to-date.

While you may feel disgruntled about the employee leaving, it is usually best to just give them a reference and move on. This way, you can focus on finding a replacement and ensuring that your business does not suffer as a result of the departure.

Get Back any Company Property

Before an employee leaves, make sure you get back any company property that they may have in their possession. This includes items such as laptops, phones, or other equipment.

If the employee fails to return the property, you can deduct these items from their final pay or make a claim through the Small Claims Court. It is important to always keep a record of all the company property assigned to your employees so that you know exactly who has what. These records should be signed by both you and your employees so that nobody can make false claims or errors when it comes to giving the property back.

Remove the Employee from Chats and Other Company Conferencing

As soon as an employee leaves your business, make sure that they are removed from all company chats and conferencing platforms. This will ensure that there is no risk of them receiving sensitive information about your business.

If you have an internal messaging system, then it’s best to remove the employee from that too as this will prevent them from seeing any messages between other employees and managers. This is particularly important if there are negative comments being made about the ex-employee on these systems – although ideally, this should not be happening in the first place.

You also need to make sure they cannot take any important information such as client lists or Intellectual Property details when they leave because this could be very damaging for your business.
>Have them sign an NDA

Have Them Sign an NDA

If the employee is leaving to work for a competitor, then you may want to have them sign a non-disclosure agreement (NDA). This document will legally bind them not to share any confidential or sensitive information about your business with their new employer.

NDAs are particularly important if you have trade secrets or other confidential information that you do not want to fall into the hands of your competitors. These agreements can be very legally complex so it is always advisable to have a lawyer draw up an NDA for you.

Offer Position Internally

If your business has grown over the years, then there may be other employees that are qualified to take on the role of the person who left. If this is the case, it can save you time and money in finding a replacement externally as they already have an idea of what your business is like and the culture it has.

If you do decide to promote someone from within, make sure that you properly train them for the new role. This will ensure that they are ready to take on the challenge and that there is minimal disruption to your business.

Look Externally for a Replacement

If you do not have any suitable employees internally, then you will need to look externally for a replacement. This can be a costly and time-consuming process, but it is often necessary in order to find the best possible candidate.

When looking for a replacement, make sure that you cast your net wide and consider candidates from all industries and backgrounds. It is also important to remember that you should not hire someone just because they have similar experience as this will not necessarily mean they are right for the role. Instead, focus on finding someone who has the right skills and personality for your business.
Recruit new staff

Tips for Recruiting Top Talent

If you want to make sure that you are hiring the best possible candidate, then follow these tips:

  • Make sure the job ad is clear and concise – this will help to weed out candidates who are not a good fit for the role.
  • Offer a competitive salary package – this will help to attract high calibre employees who are looking for a better opportunity than what they currently have.
  • Make sure your HR department is prepared to handle the influx of applications when they start coming in as this can get overwhelming very quickly if you’re not ready for it!
  • Be patient during interviews – good talent isn’t always immediately apparent so give each applicant a chance before deciding who will be interviewed next round.
  • Follow up with candidates after they have interviewed with you – this will show that you are interested in them and may give them an edge over other applicants.

Final Thoughts

Knowing what to do when an employee leaves your business is important because it will make the transition process easier for everyone involved. It is also useful to know how to prevent employees from leaving in the first place so make sure you ask those who want to leave about their reasons and if possible try to resolve any issues that may be causing them dissatisfaction at work.



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