You’re having a great day when one two of your key employees walk in and quit!

I’ve been in business for over 21 years and I have had more than a few key employee come and go.  It is part of what you signed up for when you became a business owner and entrepreneur.  Unfortunately, I walked in on Monday morning and had not one but two employees give their notice to quit.   Actually one quit and the other one retired.

Now What?

My two employees quitting had nothing to do with each other but you may find times when you have a mass exodus in your company and that’s when the shit really gets serious.  But for the purposes of this podcast, let’s just assume you are losing one key employee.   What should you do?

Take a second to Breathe

Speaking for myself (because that’s the only one I can speak for),  my initial reaction when someone quits is to blow fire either into their face or through the phone line!  Over the last twenty-some years, I have learned its much better to just slow down and take a few deep breaths.

If the person is sitting across from you this might be hard to do and maybe you want to postpone the discussion for a few minutes if that will help you get your act together.   Your first reaction is to take it personally but most times it isn’t.

Top performers or key employees don’t just work hard on your business they work hard on themselves too, if you want to build a team of the best people you need to expect turnover especially if they have outgrown the role you have for them.    If you cannot provide them with advancement then you should expect them to go chasing after a new opportunity.   Before you speak to the key employee that is leaving, try to adopt a mindset of being grateful for what they have brought to your team.

Then open your mouth…

And have a warm, friendly conversation with your key employee that is moving on.   Try to get to the real reason they are leaving but don’t judge or disagree.  Whether they believe it or not at this point is irrelevant.  They feel it.    Leave your ego at the door, most times we are the employee bear at least some of the blame as to why they are leaving.

Remember you have NOTHING to gain by making this adversarial.   You have everything to gain by acting with respect and warmth.  Think about that quick answer you might need a month from now, or that glassdoor review the employee might give you or the fact that if times changes there may come a time that you would want this employee back on your team.  I have hired back a few employees over the years.

Decide what you want

There may be times when you what to really fight to keep this key employee.   You will need to make a split decision on what you want to do.   Some people, usually when they are desperate, will make a counteroffer to the employee.   Unless they are truly a key employee then I would suggest you re-think this.   Making a counteroffer at this stage is often like when a couple has decided to divorce and then they decide to reconcile.  The damage is already done, there is a lot of healing that needs to occur.  Most times this is not worth it in business.

Set your Expectations

Make sure you review any employment agreements and your expectations for the future.   If there are references in your employee agreement about customers, other employees and intellectual property make sure you remind the employee that these exist and they are non-negotiabl.

A word about non-competes

We have them in all of our agreements but we don’t always enforce them.  Most of the time when a good employee is leaving it is because either you cannot or will not give them what they need.    Why would you hold them to a non-compete?  Make sure they understand they are to have no contact with your employees or your clients but other than that set them free.


Tell your Team and Turn a Negative into a Positive

First and foremost you need to be honest with your team about the key employee leaving.  If you are less than truthful they will see right through it and you might spook others into leaving.

Use the departure as a way to solicit help from your team and pull them together to “get through” the tough times.   Have them help you build a plan and then have them help you get by.   Rally them together and make sure they understand that you wish the key employee well and there are no hard feelings.

Take Advantage of the 2 Weeks Notice

Get your ass in gear.  Two weeks fly by and life always gets in the way…all the time.  You need to move quickly and smartly to take advantage of the remaining time you have with the key employee.

Knowledge Transfer

This is one of the most important things.   Regardless of how well you document your processes and procedures that key employee will always have information and relationships that exist only in their heads.   Start having someone shadow that person right away,  the day that the employee gives notice.   I like to do this on a screen sharing tool like GoToMeeting so I can record the sessions for reference later.   If the key employee is technical then start running through their key responsibilities.  If they are in sales then start visiting or calling customers to make a smooth handoff.

In sales situations you might want to go out and meet with the clients yourself, regardless of your role and who might eventually take the position of the key employee.  Just like with your employees you need to make your clients feel that you have this totally in control.

Review and Update Documentation

Run through each piece of documentation that the key employee was involved in.  Make sure it is valid and accurate.  If it involves passwords make sure they work.   If you don’t have accurate documentation then I recommend the recording method above to capture as many details as possible before the key employee is off the books.

Don’t forget to review key contacts at your vendors or clients that this employee has formed relationships with over the years.

Make a Hiring Plan

Not to sound like a broken record, but the time to act is now.  The longer you wait to get a job posting up they longer it will take to start getting qualified applicants in the door.

Do you need to replace this person?

The only thing you need to do before you post your job advertisement is to decide whether or not you really need to replace this person.    In my situation this week one of the employees was a telemarketer and the other one was a DBA.   We had some discussions internally whether or not we even wanted to replace these people.  In the case of the telemarketer the world is changing and it is getting harder and harder to get ANYONE on the phone and in the case of the DBA we have other resources that can fill in and perform the work at least short term.   By increasing our labor efficiency we are generating more profit for the company.

Assuming you do want to replace the key employee

Get working on your job description and get the advertisement posted.  Check out Episode 9 of The IT Provider Network for some great processes and tools for finding great talent.

If you need help on the whole hiring process,  check out these resources.

The Exit Interview

You should make sure you are communicating clearly all through the key employees last two weeks but it is especially that you have a frank conversation during the exit interview.   If you have done a good job of really wishing the key employee well and fostering a good work environment during the last two weeks then the exit interview might give you a chance to get even deeper into the reason(s) the person is leaving.

Again remember to check your ego at the door and listen.  The information might be valuable in saving the relationships with other key employees that may be dissatisfied with their position in your company.

Review any Employee Agreements or Contracts

Run through the employee agreements, severance agreements if any and all of the final HR type documents.  Make sure any questions are answered or have a follow-up plan to get the employee the answers they need.    Restate your position on intellectual property, clients, employees and any equipment that needs to be returned.

Clean up the house on the last day

When it is finally over and the last day has come, make sure you clean up your house.  This includes but certainly isn’t limited to:

  • Disabling the User Account
    • Active Directory
    • Email Accounts
    • Line of Business Applications
    • Cloud-Based Services
  • Disabling Remote or VPN access
  • Archiving off Email
  • Creating an email forwarder for incoming email to the employee
  • Collecting Company Credit Cards
  • Notifying the Payroll and/or HR companies
  • Cancelling any subcontracted services for the employee
  • Changing any shared passwords or access into clients

Take time reflect on what happened

After its all over, but not too far after you lose your key employee, take some time to reflect on what if anything you could have done better to prevent the employee from moving on.

Sometimes there is nothing,  sometimes it’s just the right time for the relationship to end.

A  study from Deloitte Consulting called Talent 2020, polled 560 recent job changers.  The study says that the biggest reasons people quit have little or nothing to do with pay. Instead, what most often makes them move on is the opportunity to develop and use more of their skills and abilities, over 42% of the respondents cited this reason.  The next biggest response, over 25% of the respondents cited a lack of career progress and finally 21% of them said they just weren’t challenged.

In other words, people get bored.

What you can do to do better

Download my 8 ways to Retain Top Talent nuggets.   Print them out, put them on your wall and add to your daily routines.


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