Definition of Resignation:
When an employee chooses to terminate their employment, it is called Resignation. This is a voluntary act, and not to be confused with termination of the employee. The reasons for resignation could plenty, such as;
- New career opportunities
- Unhappy at the current workplace
- Higher education or Professional development
And so on.
How should you handle employee resignation?
These days, companies understand the importance of employee retention. According to the Work Institute, each employee exit costs about one-third of that worker's annual earnings, including expenses such as recruiter fees, temporary employees and lost productivity Hence it is important to invest time on resignation procedure and look for ways to retain the employees. Here are some things to consider:
- Make them feel heard: The first thing that the manager should do is to understand the reasons for resignation and ask for honest feedback. Is it the work environment, or the compensation? Were they not appreciated enough, or are they unhappy with the management? Is it because they received a better opportunity elsewhere? This helps you uncover some of the issues hitherto unknown. Ensure that you make them feel heard, and offer to make amends.
- Be grateful to their contribution: Keep the drama at bay during resignation. Thank the employee for their contributions. If they have decided on the departure, wish them good luck at their new venture and offer to write a recommendation letter as well! Organize a small farewell party, so they feel appreciated and have a positive last day at work.
- Decide how to break the news to the team: Do not talk about their future plans unless the employee wishes to do that themselves. Sit with them and discuss how to inform the team about their departure. You can also for referrals from the employee to fill in the vacant position.
- Work on a hiring strategy: See if you need to hire for the open position or if you can fill in with your existing employees. If you are planning to hand over the responsibilities to an existing employee, set up a knowledge transfer meeting. This ensures that the exiting employee need not be contacted for any official work after their departure.
Designing a Resignation Process:
When an employee decides to resign, they have to inform their manager and submit a formal resignation letter for the HR department to process their departure. Instead of verbally informing the procedure, it is much easier with a Resignation policy that talks about the following:
- The company’s definition of resignation
- How to apply for resignation
- The notice period for resignation for various roles.
- Compensation, reimbursements and encashment of unused leaves.
- Scope for revoking resignation
- Possibility of rehiring.
- Exit interviews
Role of HR in resignation:
HR plays a vital role during the exit of an employee. They conduct the exit interviews to understand the reason for their departure and inform them of the rights and benefits they are entitled to. At the same time, they need to inform employees how their last paycheck will be processed and the notice period details. Give the employee the opportunity to be honest, since it can bring unknown issues to your attention and help you resolve them.
Once the cause of resignation is understood, it is the responsibility of the HR to take care of the termination paperwork and discuss with managers on the hiring/replacement strategy.