What to Do When Your Star Employee Quits
Finding qualified, hard-working employees is a challenge for any small business, so when an employee quits, the negative effects can be significant. No business owner should get complacent about this, either. According to a recent Bureau of Labor Statistics Job Opening and Labor Turnover survey, more than 2.5 million employees in the U.S. left their jobs in May 2014. It's a situation every small business should be prepared to handle.
So what's a useful strategy for coping with a star employee's imminent departure?
Get all the facts you can in an exit interview
Employees make the decision to quit a job for many reasons, money may be only one of those reasons. Once their decision is made, you have a valuable opportunity to learn why. Schedule an exit interview soon after the employee informs you of his or her decision and then have an open, honest discussion about the reasons behind the departure. Of course, "open and honest" may include criticism of you and your managerial style. Becoming defensive or denying what the soon-to-be ex-employee says will get you nowhere. Focus on asking questions that can lead to improvements in your team and culture. When an employee quits, perhaps the most important question to ask is, "What changes to our business might have kept you on longer?"
Refrain from making a counter-offer
It may be tempting to try and entice your star employee from leaving, but in general counter-offers do more harm than good. For one thing, the employee has already made the critical decision, so it's clear that he or she is already thinking (or has made plans) to move on. Also, how will a counter-offer impact your other employees? (Another worker might threaten to quit if he or she believes you'll respond with a lucrative counter-offer.) This approach is rarely successful either as a way to retain an employee or as a tactic in salary negotiations.
Reassure your other employees
A star employee's departure will likely affect everyone in the business. Rather than let rumors spread and damage workplace morale, get in front of the situation and let others know what's happening as soon as possible. If possible, meet with employees in person and give them time to ask questions about the employee leaving. Find out what concerns they have and brainstorm possible changes to the work environment that make the transition easier for everyone involved. How can you help employees cope with the additional workload caused by the star's impending absence? Are there ways to move people around so no one individual is saddled with so much work that he, too, will consider leaving?
"A good company will support and wish its employees well, especially if they know that these employees will be leaving for better opportunities," says business writer Iliana Snow. "Acknowledge the loss for the company and convey your appreciation for the employee's efforts. Let your employee say his parting words and immediately get into action to put your team into transition."
A star employee's exit doesn't have to be all doom and gloom. Instead, it marks an occasion to take a fresh look at work-teams and processes, with an eye toward making changes that enhance efficiency and boost morale.
"The vacancy gives you a chance to evaluate your team makeup — personalities, culture and project management skills," notes Gary Perman, president of PermanTech. "It gives you an opportunity to identify needed skills or personality traits that would make the team stronger and even more vibrant."
Star employees will come and go — it's in the nature of business today. By managing such departures and learning from them, you can create an environment that attracts future star employees to your business.