What to do when your best employee resigns?

Team Management

What to do when your best employee resigns?

Your week is going well. In fact all in the business seems to be going well when your best employee walks in, and says ‘have you got a minute’ and then drops the bombshell. They are resigning. They slide the crisply printed A4 sheet of paper, with a few sentences of standard clinches including ‘hard decision’ and ‘required notice period’. Your mouth goes dry.

What do you do now?

1. Find out the REAL reason.

Determine if it is a ‘problem’ reason or if they have reached their used by date. They are two different reasons. The first is that they want to stay, but can’t see a solution around their problem, so the solution becomes to resign and try and find another job or employer that will fit around their problem.

Reasons could range from family illnesses or care needs, travel distance to work, short term stress such as divorce or relationship breakdown, a desire to travel for longer than the standard 4-6 week maximum leave policies. A common issue can some times be pressure from the spouse or other half. Economic pressure on payments and mortgages, or just the need or desire for extensions or upgrades to the home, or a new car, as new family additions arrive put them under pressure to perform financially. Other reasons may include internal issues such as bullying, limited promotional and development opportunities - or the problem could be well, you. Consider getting regular, honest feedback on your management style to curtail any future issues. At the end of the day the employee may just want a change or spread their wings. Look at where an inter-departmental (or international) ‘secondment’ for 12 months may ally their itchy feet, with an understanding they return.

2.  Define The Costs.

Workout how much it will cost to replace the employee versus investing in their problem. Towers Perrin research found that it can cost up to and beyond $50k to replace an employee in a mid-level professional role. This doesn’t even include the intangible value of relationship wealth between customers, and team members. In addition, their knowledge of your company, products, policies and processes. If it takes a new employee around 6 months to come up to just a working knowledge ,that gets them by, of company and customer culture, products, policies, procedures and other nuances - you can add on a quarter of their annual salary on top of the current employee replacement cost. In short, before you go down the thought path of ‘solving their problem will cost us’ the alternative makes the cost of retaining your best employee look like chicken feed.

3.  Break The Rules Or Break The Bank

I often see in these situations the fear and control rise to the surface of many managers, HR practitioners and companies cultures as a whole, when the thought of doing something that is outside a policy, procedure or unspoken ‘rule’ is tabled. The ‘Policy Police’ come out in force and all for the sake of maintaining a perceived sense of ‘order’ or ‘fairness’, cost the company the tens of thousands of dollars to lose a good employee, without a thought to what it creates down the line. What does it create? Smaller company profits. What does that mean for all? Less resources to do your job effectively, and if you are not doing your job effectively, potentially less pay rise. Then what happens? Best employees leave. Go figure. Breaking the rules is far more cost effective. So if you can solve your best employees problem to avoid them leaving, invest in it. Small business have the advantage and flexibility of not being tied down with so much policy restriction, so understand your figures around turnover. Just because you can't see the costs, doesn't mean they are not there. 

4.  Keep The Lines Open

Ensure that you are consistently talking to, not only your best employees, but all employees to ensure a ‘temperature check’. Gain their trust to be open and honest with anything that is going on with them so you can head off a potential resignation. I know of one manager who literally at each weekly meeting would openly ask his team. ‘Who is thinking of resigning? Who is searching out there?” He had built up such trust with them that they would tell him what their problems were. He was not afraid of helping people spread their wings in the future and mentored them out of the organization when it was right. He was never caught with out a back up plan this way, and was able to either cross train other employees or plan for a replacement well in advance. It was a win-win situation. However the strategy really worked for him. Because he cared so much about them, they were doubtful they would find a manager elsewhere that was as accommodating.

5. Long Term Fail Safe

Many managers come undone when they have become so reliant on one or two individuals. This comes down to knowing how to and over time building a strong team with a succession plan built in. So in the event it is time for the best person to move on (and it does always come) that you have a strong back up to step up. This doesn’t always have to be from the same team either, but other departments in the organization also. Ensure you are not only cross-training the skills, but nurturing and rewarding behaviors and attitudes that make people a success in your organization.

Being prepared will make the inevitable news less painful and you may even change their mind by open communication and getting the root of their purpose. But accept some times the reason your best employees are the best is because they are continually developing themselves and opening themselves to new opportunities and growth.  After all, that’s what made you the manager you are today right?



Anne-Marie Orrock

Human Resources Consulting, Human Resources at Corporate Canary HR Consulting

Comments (4)
Wendy Huang

Wendy Huang, Full Time Blogger and YouTuber at A Custom Blog in 4 Minutes

Hi Anne-Marie, Great article and raised some pretty great points that I've never thought about. If all businesses took these pointers I'm sure it'll lead to much lower turnover rates :)

John Belchamber

John Belchamber, Owner & Senior Consultant at Invoke Results

Very wise advice Anne-Marie. It amazes me how many business have a 'once they go, never have them back' policy. Having someone get a wider experience, training at someone else's cost and seeing how green that grass actually is can be a good thing sometimes.

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