HR · 18 September 2018

What to do when your star employee is leaving for a competitor

Employers may be concerned that it will be difficult to replace the departing employee

Associate Director at Peninsula HR, Kate Plamer, explains how an employer should respond if a valued employee leaves the company to join a competitor business.

It can be concerning for employers when valuable and highly skilled employees hand in their notice, especially when they have built up strong and ongoing relationships with company clients.

Employers should take measures to ensure they have clear procedures in place for responding to this occurrence.

Business owners can reserve the right to restrict employees from acting against the company’s interests through the implementation of post-termination restrictive covenants. These clauses are generally used to prevent the departing worker conducting activities in competition with them, sharing confidential information or stealing established clients.

Employers are able to enforce a post-termination restriction if they can prove it is necessary to protect legitimate business interests. It is, therefore, good practice to remind the departing employee of any obligations placed upon them by their contract of employment and warn them of the potential consequences of breaching the agreement.

When an employee announces their intention to leave, an exit interview should be conducted. Here, managers can discuss their reasons for leaving and evaluate if there are any changes that could be made that would encourage them to stay.

It might be that the employee has personal issues outside of work that they are struggling to manage on their current working hours, meaning an allowance for flexible working conditions could be highly beneficial for them.

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Alternatively, the employee may not feel that their current salary is adequate and be attracted by a higher rate of pay at their new role, something that their current employer could consider evaluating. From a wider perspective, the information obtained from the employee may help with retention of other employees.

If the employee does uphold their decision to leave employers should communicate with their remaining employees in order to reassure commitment towards them. If there seems to be a general issue of employee morale within the company employers should investigate what these issues are and consider making changes.



Kate Palmer CIPD is the head of advisory at law firm Peninsula and is a member of its senior leadership team. She joined in 2009 having held a senior HR manager's role in another large company. With a specialist background in facilities management in the NHS, Kate offers a wealth of employment law experience. She's an expert negotiator - one notable case was with the NHS's trade unions over terms and conditions in the Agenda for Change pay system.