UK – How to recover from the loss of a key employee

What can seem like a crushing blow at the time can often be turned into a key move forwards in the life of a growing business. It is up to you to turn a potential disaster into a great opportunity.

Whenever an enterprise loses an executive or senior member of staff, this often creates a knowledge gap and can be the cause of unease among employees. There is a wide range of strategies available to avoid this and to trigger positive energies.

Get over the shock of betrayal.

On hearing of the resignation, most business owners react emotionally. If you have grown to really rely on that person, you may feel deserted and alone. Brace yourself and get over it quickly! It is usually nothing personal.

Do not be surprised when this happens.

It is bound to happen in all growing businesses, so plan for it! Get the word out and start communicating the new plan to everyone involved, starting from the top down. Order is important. Get the whole team involved in creating the new plan and build consensus round it.

Communicate the departure company-wide as soon as possible.

Do not let rumours spread. Be candid with your employees. Be prepared to say clearly that the departure is unwanted, change is unavoidable, but we do have a solution to make it through the turbulence. You cannot control how others react to the news, but you can control how it gets communicated. Collaborating with your exiting employee on how to best present the departure is critical. Sometimes it works better if the person leaving is able to make the announcement. Gather input on your proposed plan from as many stakeholders as possible. Resist trying to solve the problem on your own.

Conduct an exit interview.

Give the employee the chance to say what they dared not to while they were there, including ways that you can improve as their boss. Ask them who they think should replace them? Perhaps they know of someone in or outside your business. Show that you care, that you want them to stay, but do not necessarily counter-offer! Even if you are upset, engage in a warm and friendly conversation about the person’s future plans. Do things right so there is no bad blood.

Try to understand the “why” behind the employee’s decision.

Very often you can do nothing about it and it will be difficult to persuade them to stay using pure logic. Employees usually find it hard to back down from such a big decision. Most of the time the person has simply got a better offer and their mind is made up. But, occasionally, you can discover new information that will help you construct a solution, particularly if they are resigning for personal reasons.

Counter-offering is never really a good idea.

You are making the assumption that pay is the issue; if it is, this should have come out in an earlier appraisal. Just remember that no-one is indispensable! Once he/she has gone through the thought process of leaving, it is hard to trust them again fully.

Enticing them back, after they have left.

A much better strategy is to “retain a relationship” with the leaver and then re-recruit them in a year. At that point they may have realised that the grass is not always greener. If the employee returns after a spell at a competitor’s and can bring back valuable data, then everyone wins.

Swallow your pride and take them back!

Do not assume you must instantly replace him/her. Although you need to formulate a plan quickly, you must also take time to evaluate the needs of the vacant role, compare them against the existing employees’ capabilities, and only then determine how the role should be defined, or who should fill it. Reconsider configuration of your team. This could be a chance for someone else to expand and grow into the role. Sometimes their departure is a great opportunity to upscale on talent. Embrace the opportunity for change. You may have improved the business over the last few years to a degree where you could now attract a better candidate than at the time you last recruited. Most businesses outgrow their own employees (and their bosses, sometimes!) as they expand.

Transfer knowledge.

You will have some difficult decisions to make about how to divvy up responsibilities while you are short-staff ed. Acknowledge that your team will have a “workload problem” for a time and that people are likely to feel overburdened, but also use the departure as an opportunity to talk to employees about their careers and opportunities for growth. During the employee’s notice period, set up a “shadowing mechanism” so that those taking over his responsibilities can absorb what they need to. The biggest challenge is transferring the “sticky knowledge” — the things an employee knows that cannot necessarily be shown on an Excel spreadsheet. For this, you need to negotiate continued communication with the person aft er they have left so you can tap their knowledge either by email or phone when problems arise. All the more reason to run the exit programme in a friendly way (see above).

Have a party.

On the employee’s last day, it is important to gather your team to thank the person who is leaving and wish them well. It does not have to be a big one but the act of celebration is key. After all, it is not only about the person who is leaving. It is also about the people who are staying. You are rewarding the people for whom it is going to be a difficult few weeks. Failing to acknowledge an employee’s departure and his or her contributions sends a bad message to your team.

“The first reaction to losing a key employee is to treat it as a major problem, but if properly handled it can also turn out to be an opportunity for new developments.”
Christopher Jenkins Partner, Ecovis, London, UK

A few tips

Businesses should not be taken by surprise at the loss of a key employee. It will almost certainly happen again to you, so be prepared this time.
Revise all your contracts of employment. Have you built in sufficient notice period for senior people? But know also that using legal defences such as non-compete clauses and entering into contractual fights generally does not work
Put key person policies in place to protect against the loss of a key individual through death or disability.
Disability insurance is seriously expensive. Try instigating a self-insuring policy for the first six months and then go out to a third party.