How To Handle Employee Resignation: A Guide for HR Managers

handling resignation
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An employee who was formerly highly motivated, enthusiastic, and passionate has transformed into someone quiet, reserved, unsatisfied, and full of complaints.

You have seen him absent in most meetings, showing a lack of enthusiasm or being passive for the project he is working on, and frequently taking medical or annual leaves in the past 2-months. 

Without any surprise, you receive his resignation letter serving his notice period with the final date of employment clearly stated in his letter. 

Departing employees or seeing a high turnover in your company can be daunting, and you should keep an eye on observing your unhappy employee's transformation before it is too late when retention becomes impossible. 

The Great Resignation

From the U.S. Bureau of Labor Statistics, the number of job openings has increased to 11 million from the February 2023 economic release. On average, four (4) million employees in the U.S. resigned each month in 2022 1. In terms of the annual record, a record-breaking 48 million quit their jobs in 2022.

From the whopping employee exodus, here is a guide to handling employee resignation for department managers and HR professionals from the HR department to deal with an employee who is leaving. 

1. Understand the reason

Be an active listener. Human resources managers tend to ask direct questions like "Why did you decide to leave," and "Where are you going"? Consider if you are the employee tendering your resignation; how would you feel?

Does the company genuinely care for you as an individual, or is the HR department just conducting market research to know your movement, the competitor's offerings, and new market opportunities? 

As an HR professional, be professional, engaging, caring, and with a problem-solving mindset. Suppose the employee is uncomfortable with your exit interview; they will not only change their mind to stay but even restrict themselves from sharing the underlying reasons that they are leaving.

It's time to take the opportunity to identify a human-centric employee value proposition with your employee strategy plans, understand how the employee feels, and dive deep into measuring your employee engagement level from the resigner's statement. 

2. Negotiate for retention

From a talent acquisition perspective, seeing a good employee leave a job is more detrimental than hiring the wrong candidate, especially a terrific team member with constantly high performance.  

According to the great resignation statistic gathered from the 4 million quitters from the US bureau of labor, the top 5 reasons for leaving 2 were low pay (63%), lack of advancement opportunities (63%), feeling disrespected (56%), lack of child care or family needs (48%), and lack of schedule flexibility (45%). 

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A compassionate HR manager would try to understand how an employee feels and perceive their challenges and be able to propose an alternative plan for retention. 

The HR role becomes vital as a mediator between the employee and department head. The employee might have thought of the proposal before but would think it is impossible due to the company culture.

The HR manager can work on a flexible working arrangement if family commitment is a concern as a retention strategy.

3. Create the transition plan

Most HR personnel will only focus on the administrative aspects when dealing with employee resignation, such as calculating the payroll based on the notice period, ensuring the company's property is returned, and preparing non-disclosure agreement to protect confidential business information from being misused inappropriately. 

The above is the usual checklist to facilitate a resignation process. However, HR can help to ensure a smooth transition beyond the administrative tasks explained. Here are some suggestions: 

  • Suggest conducting an exit interview earlier if the decision is firm. 
  • Request the employee to list out their major responsibilities and daily tasks.
  • Request the employee to explain their job challenges.
  • If a mismatched job expectation was highlighted, consider hiring a more senior or junior position staff as a replacement.
  • If the employee is willing to share the new company's offer, propose the new budget to the employer to compete with the market. 
  • Consider a temporary replacement if there are urgent projects to complete and if hiring permanent staff is challenging due to the strict requirements and urgency. 
  • What are the suggestions to reorganize the duties if too heavy or insufficient workloads were reported?
  • Possible plans to hand over and train their successor?
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Most HR professionals will only rely on the department's manager's job requirements when drafting the replacement's job description. An important note is that employees might leave the company due to difficulty working with their managers. 

Hence, HR managers need to empathize with the employee's feelings and understand their value proposition if employee experience and engagement are the key objectives for the HR department to achieve. 

4. Notify other employees & ensure a positive departure.

Employee resignation can be contagious, especially if the team members are close and share similar values regarding problems with superiors and pressure in coping with the increasing workloads.

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Notifying relevant employees have at least 3 benefits:

  1. Provide internal opportunities to the team members interested in replacing the resigner's role.
  2. Reassure that HR is seriously concerned about their well-being if the leaving is associated with bad management.
  3. If the employee is considered a good employee, take the opportunity to praise and give credit to their performance. In that case, this will stop the speculation that the employee is leaving for negative reasons. 

Lastly, providing a reference letter or certifying their employment status with the company to the departing employees strengthens the positive relationship in the long term. 

If the employee needs to join the new company soon and does not feel motivated to work during the notice period, consider shortening the required notice period and your employees will be grateful for it. 

Ultimately, the current talent lifecycle looks more like a revolving circle than a linear one. If the resigned employee has a pleasant and positive departure experience, this will enhance the employer's branding and image.

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Need more help in employee retention plans?

How a PEO / EOR like AYP can help in employee retention:

1. Recruitment
We hire A players from anywhere. With our help, a suitable replacement will be filled in quickly according to your timeline. 

2. HR software solution
Track and monitor your employee engagement with our technology solutions. Our solutions will help to create a happier, more flexible, engaged, and more scalable workplace.

3. Streamlined HR processes
A PEO like us helps you take over HR processes such as payroll, tax filing, and employee benefits administration, freeing up time and resources for your company to focus on talent development and engagement.

4. Compliance support
We are equipped with 100+ cross-country legal experts, which can reduce the risk of employee disputes and lawsuits, especially if the resignation involves a contractual issue or a dispute. 

Get a FREE consultation with us on your business plan today!

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References

  1.  Job openings and labor turnover summary. February 2023, U.S. Bureau of labor statistics.
  2. 20 STUNNING GREAT RESIGNATION STATISTICS [2023]: WHY ARE AMERICANS LEAVING THEIR JOBS? Oct 2022. ZIPPIA.
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