HR Mavericks

Eddy’s HR Mavericks Encyclopedia

Employee Resignation

An employee's resignation involves more than just turning in a security badge. Do you know how soon an employee needs to be paid after they resign? Do you know why the employee is leaving? Keep reading to find out the reasons behind why employees resign and to learn a few tips on how to begin developing your employee resignation process.

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.
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

  • The 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 payday.
  • 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.

What If an Employee Walks Out Without Resigning?

"Best words to live by in HR, "If it didn't happen in writing, it didn't happen." Meaning, follow up in writing via their personal email address to confirm that they are quitting their role at the company due to walking out of work, if they do not respond within 24 hours to the email, then you will take that as confirmation of separation due to resignation, similar to job abandonment. Then process their separation as a voluntary separation and follow the standard steps you have internally. I always include a Separation Notice with my email when confirming their separation. This is a PDF with the company letterhead confirming their last day worked, what they can expect from their final paycheck and their date, and then mentioning that they will get information following up regarding COBRA, 401K, etc. I have a template for resignations, like in the case of an employee walking out, and for one that is the company separating from the employee." - Kelly Loudermilk "Start with checking what your company policy is. Commonly it's viewed as job abandonment, however, I strongly recommend trying to find out why the employee left. I've had situations where it was discovered that they had been subjected to a hostile work environment, or were being harassed. They hadn't brought it to anyone's attention due to either not trusting the HR department from having a prior bad experience, or fear of retaliation from the employee they were having issues with, they didn't want to appear like a snitch, etc. They walked off the job because they couldn't take it anymore. If you're able to save the employee in those situations awesome, but if not it gives you an opportunity to talk with them, confirm what the intention is, possibly do an exit interview, and hopefully get some feedback. If you can't reach them by phone, send an email with a timeline for them to get back to you and advise that if you don't hear back you will consider them as self-terminated. Follow up the initial communication with something in writing. Whatever the situation calls for - either a notice of investigation or confirmation of the voluntary quit, etc. You will want the documentation for later. " - Heather Anderson SHRM-CP
Emily Kranendonk

Emily Kranendonk

Emily is the HR Manager for PatientBond. She is the excited for the opportunity of creating an HR department with her current employer. Emily pursued a Master's in Human Resources from USU and comes with 4 years of experience from various companies. Emily serves as the Director of Social Media for the Salt Lake SHRM chapter.
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Frequently asked questions
Other Related Terms
Employee Termination
Firing an Employee
Involuntary Turnover
Reduction in Force (RIF)
Voluntary Turnover
Wrongful Termination
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