Employee departures are an inevitable part of the employee lifecycle. These days, few employees stay with one employer for life, and in fact, some employee turnover can bring positive benefits to your business (as long as you are able to recruit staff).
As with the rest of the employee lifecycle, employee separation is something you can prepare for. Being well prepared for staff separation will help to ease the transition for your organisation, reduce the disruption of staff turnover, ensure that the you meet all of the statutory requirements, to prepare your team, learn from your departing employee, and to decide what to do next.
Employees will leave for different reasons and under different circumstances, each of which will dictate a slightly different process to go through to manage the separation. Broadly, the four reasons for departure are:
- Voluntary separation: the employee decides to leave of their own accord, perhaps to go to another job
- Retirement: the employee decides to leave the workforce
- Involuntary separation: the employer decides to permanently terminate the person’s employment or the employees contract ends
- Layoff / redundancy / furlough: ceasing employment, potentially on a temporary grounds, due to a structural change in the nature of the work
The processes and motivations for voluntary separation and retirement will be broadly similar – in both cases, the employee is likely to have left of their own accord. Likewise, the considerations for involuntary separation and layoff / redundancy will have areas of commonality, but normally mean that the decision for the employee to leave was not their own. Both need careful and considered management.
Compliance with employment law
Most of the processes surrounding the separation of an employee will be governed by employment law within your jurisdiction (country, state or employer). For example, in Australia, Fair Work Leglislation governs most aspects of the employee – employer relationship. Employment New Zealand provides guidance for New Zealand employers, the Federal Labour Standards in Canada provide guidance around employment conditions for Federal employees in Canada.
Normally, these bodies will provide guidance around many of the components of employment, including the period of notice, requirements for pay, sick, annual leave, maternity etc. You, or your HR advisor, should be aware of the statutory requirements guiding your own employment setting and, at the very minimum, ensure that you comply with these.
The following five steps are likely to be similar for any kind of voluntary separation. For involuntary separation and layoff or redundancy, the management of the departure will need to be considered in the context of the departure, however the guidelines below are still likely to be relevant in many cases.
1. Employee gives notice
The required notice period should be stipulated in the employee’s contract, or may be prescribed by your relevant employment law. Changes in the notice period may be negotiated with mutual agreement from the employer and the employee in certain circumstances. If your employee is retiring, you may consider discussions about a phased departure, perhaps a reduction in hours or a change in the nature of work. Notice should be given in writing and ideally, with sufficient time for you to plan to replace staff or develop an alternative plan of action.
2. During the notice period
Depending how you have negotiated your employee’s separation, you can use the notice period to manage the transition of the staff member out of your organisation. This will include deciding the timing and nature of the messages you give to the remaining employees about the departure of your staff member, transitioning the work away from that employee, handing over key tasks or expertise and possibly training existing staff.
Regardless of the reason for the departure and the potential burden it may place on your organisation, a positive separation is critical to maintaining a positive workplace culture.
Employee separation can impact on all members of your organisation. The person leaving is an important ambassador for your organisation – you want to ensure that they leave with a positive view of your organisation, and that they will amplify that message.
Things to consider:
- Don’t take the departure personally (regardless of the reason) and manage the relationship professionally
- Develop a clear communication plan for the remaining staff about the departure, the expected changes, and the impact it is likely to have on them
- Engage with the appropriate people to manage the transition (accountant, finance officer, human resources department where appropriate) so that your employee is clear about their final termination pay (for example, outstanding leave and other benefits)
- Explicitly identify and recognise the value of the departing staff member, what they have brought to your organisation – and tell them
- Let your employee know that you would like to undertake an exit interview and ask them to consider their time with your organisation, what they have learned and what could be done differently (informally at this stage)
- Have a departure ritual, whether it is a farewell dinner, lunch or afternoon tea; a formal announcement; a signed card. This gives all members of the team a chance to acknowledge and participate in the departure and plan for the impact of the departure on their own role. It is also important symbolically to mark the end of an employee’s time with you.
3. Final day
Try to have a clearly agreed final day, and clear expectations about what will happen on that day. Largely, these expectations will be implicit – removing personal effects, returning corporate property including laptop, mobile phone, keys, identification cards etc. Failure to follow through with these expectations can lead to blurred boundaries about who owns what property – particularly portable equipment like phones, laptops and other work-related equipment.
It is worth having a simple checklist of items to be returned and a single person accountable for ensuring the return of those items. Large organisations are likely to have these processes in place – although I have worked in organisations that have been so large that those processes have been lost – and so has a lot of stuff!
4. Finalise administration
Initiate any transitional communication, such as email and phone redirections, to ease the handover for clients or other key partners.
If not on the final day of employment, be clear about when your employee can expect their final payment. Notify appropriate administrative departments and jurisdictions to ensure that they have the appropriate information to close off all of the employee’s relevant accounts and documentation (including pension / superannuation funds, tax, holiday pay etc).
5. Exit interview
Exit interviews are an invaluable way to understand your employee’s experience and identify steps that may help you to improve your staff retention, organisational culture, systems and processes. A well structured interview will also provide a platform for employees to voice grievances – although ideally, you will not hear these for the first time when your employee is departing.
There is no set formula for an exit interview. You may wish to do it face-to-face before the employee leaves, or arrange a time to catch up after their departure. Some employees use a written exit survey, which has the advantage of not putting your employee on the spot, but the disadvantage of being a less personal interaction and you may not be able to respond to or clarify issues that are raised.
An exit interview should consider the following:
Why the employee is leaving
What prompted you to start looking for another role?
What is your new role?
How do the employee benefits in your new role compare with your current job?
Is there anything we should consider in your current role when looking for a new employee to replace you?
What advice would you give us in trying to recruit a candidate to replace you?
Their reflections on your organisational culture
What were the best parts of working with our organisation?
What could be improved to make the experience of working with our organisation more satisfying?
How would you describe your experience of working here to other people?
To what extent do you think our organisations provides an environment that is free from discrimination and harassment?
Management, supervision and support structures
Were your contributions and achievements recognised througout your employment with us? If not, how could we improve that?
Did you have the necessary support available to enable you to perform your role? How could we have improved that?
Did you have adequate resources to do your job? If not, what could be done differently?
What aspects of your new job most appeal to you?
Where do you hope this leads you?
Concluding the interview
At the end of the interview, briefly summarise the key points you’ve taken away from the discussion and ask for any points of clarification. End on a positive note and wish your employee well in their next job.
The processes of managing separation for staff who retiring will be very similar to voluntary separation, but will involve different administrative processes (depending on your jurisdiction) to comply with employment law and ensure that the employee receives the appropriate termination benefits.
For any involuntary separation, ensure that you have complied with all relevant employment law and have a strong paper trail to support your decisions.
If you are terminating a staff member for performance reasons, the notice of termination should not come as a surprise to them. Performance management should not start when staff performance starts waning. In a high performing organisation, staff will always be aware of how their performance is tracking against workplace expectations.
Layoff or redundancy
Layoffs and redundancies can be a little more challenging to manage. Large organisations will normally have a strategy for managing redundancies or staff layoffs which will be communicated to staff and managed accordingly. Smaller organisations may not have the ability to forewarn staff of redundancies. For instance, if an organisation is found to be trading insolvent, then it may need to cease operating very quickly, which can literally mean that staff are terminated without notice. In the current employment environment, this is not common, however COVID-19 forced the rapid closure of a number of organisations.
Employee separation is not something anyone wants to deal with frequently, however being prepared for the transition of staff in and out of your organisation can remove the emotional impact of the separation and optimise the outcomes for your employees and organisation.