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What Is an Employee Resignation?
Employee resignation is when the employee resigns voluntarily. Typically an employee gives a “two weeks” notice when they decide to leave the company.
Employee resignations happen for many reasons. It can be a good thing or a bad thing, it just depends on what has taken place. It can be a good thing because that employee’s resignation allows the opportunity to bring in people with new ideas and approaches to the company. On the flipside, it can be costly when people leave.
No company wants too much turnover to take place because it costs money and time to replace employees.
What Are Reasons an Employee Would Resign?
Employees leave companies for a variety of reasons. Companies can take action to deal with each reason behind employees’ resignation. The following is a list of reasons an employee may decide to leave your company:
- Lack of Advancement. Employees may feel there are no opportunities ahead of them to get promoted or they have been told they will not be promoted any time soon. An employee may view a job change as an opportunity to start over and look for a better growth opportunity.
- Poor Supervision. Employees want a manager who provides training on the interpersonal and technical skills needed in a job. It is the responsibility of the company to put in place effective managers. Employees will leave if they do not feel like they have a manager who knows how to do their job.
- Toxic company culture. Does the company walk the talk? Employees want to feel like they are a part of a company who does what they say. Employees don’t want the company to allow bad players to stay just because the company is heavily reliant on them. This does not help your employees to want to stick around.
- Inadequate compensation. Market rates and society are changing and compensation for employees needs to change with the times. If you haven’t visited compensation in awhile then it’s time to put a compensation structure and plan in place. Employees want feedback and they want to know how they are doing.
- Insufficient training. The employee may feel like they were not properly oriented and trained to do their job. If you discover this is a reason for an employee’s resignation, take it as an opportunity to build a formal training program. Train supervisors on how to be better trainers and coaches for your employees.
- Monotonous work. Keeping an employee in one position without the opportunity of rotating jobs can cause that employee to resign. Think about whether or not you are paying enough for such a position. The job may not have enough enriched content to help the employee feel like they are progressing. The problem may even go as far back as not having a realistic job preview.
- Personal Issues. Issues arise in personal lives all the time. If an employee resigns due to personal issues, think about whether or not the company could have assisted with the situation. Training managers on being a good listener and watching for warning signs of burnout can go a long way in assisting employees with personal issues. Educate your employees on what mental health benefits are available to them such as employee assistance programs.
- Labor market issues. The labor market is constantly changing. Staying up to date on changes in supply and demand for a variety of skills is critical. As an HR professional you will want to implement a compensation plan and research if the company is staying competitive. It is important to regularly review compensation and benefits.
How Should HR Handle an Employee Resignation?
An employee resignation is an opportunity to learn about how your company is doing from an individual’s perspective. It is also an opportunity for a company to live up to it’s company brand until that employee leaves.
Step 1: Figure Out Last Day of Employment
It’s good to know when an employee leaves because you then know what your time frame is to get everything done before an employee leaves.
Step 2: Schedule and Conduct an Exit Interview
Find a time to meet with the employee to understand why they are leaving the company and what the company can do better going forward.
Step 3: Provide Benefit Information
Employees need to be provided information on the following:
- Options regarding COBRA, life insurance, supplemental insurance and HSA/FSA reimbursement deadlines if needed.
- Whether or not PTO is paid out upon termination. Refer to your employee handbook for this information.
- Retirement options.
Step 4: Legal Documents
Remind the employee of any legal obligations that go beyond employment, such as non-disclosure agreements or employment contracts.
Step 5: Company Property
Gather all company property from the employee, such as security badge, computer equipment, company phone, company issued credit cards, keys, and any other company property.
What To Do After an Employee Resigns?
The following steps will help you to know what to do next:
Action 1: Compensation
- Final paycheck needs to be processed. If it is an involuntary resignation, payroll needs to be processed within a certain period of time. Check your state’s employment laws on this. Otherwise, the employee will be paid on the next pay day.
- If your company pays out PTO, be sure to include the employee’s PTO balances in the final paycheck.
- Check to see if the employee has any outstanding money balance owed to the company.
Action 2: Document and Track Data
Gather all documentation regarding the employee into their file. File the resignation letter from the employee. Move their files into a termination file. Another thing to keep in mind is the retention of records. Begin to create a system that will help you know how long you have to hold onto documentation.
Action 3: Work With the Hiring Manager
Talk with the manager to find out whether or not the position needs to be backfilled. If it does, work with the manager on getting the position ready to be recruited for. Review the job description to get it posted. Start the recruiting process again.
Action 4: Inform IT
Return the employee’s computer equipment to IT. It will be important for IT to remove the employee’s access to company sites, disable passwords and delete accounts as needed.
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