An employee has good relations with your company but if his exit experience is not good, he might give negative reviews about your company.
1: Employee Attrition
Employee attrition means reasons for which an employee leaves a company. It’s quite natural that an employee leaves one company & join some other company. There are many reasons for such as:
- Retirement
- Shifting to some other city
- Salary hike in other company
- Better career opportunities
- Job in a better company
- Upset with manager
- Unable to adjust to the company’s culture
- No role clarity
You should study the reasons due to which employee leaves your company. You have to consider it from a strategic point of view.
2: Formalities of exit process for employees
Following ate the steps of the exit process:
Acknowledging employee’s resignation: The employee has to give a formal resignation & you have to accept it.
Notice period: You have to formally inform your employee about the time &formalities about the notice period.
Handover pending projects: The employee has to handover the pending projects to his immediate manager.
NOC Form: NOC /clearance form has to be signed by each department. It shows there is no pending object lying with the employee.
Farewell: Team can give a small farewell to the employee. It will give him a good memory when he leaves the company.
Exit interview: You should conduct an exit interview to know the reason behind the employee quitting your company.
Full & final settlement formalities: These are the final formalities done after an employee leaves your company.
All these steps are discussed in detail as follows:
Step 1: Acknowledging the Resignation
When you receive an employee’s resignation formally/informally, you should discuss the next steps with your HR manager. You should make a decision about the next process to be taken on your part. Following are the steps:
Deciding about employee retention: Your reporting & HR managers should mutually discuss if they want to retain the employee. If they are interested in retaining him, they need to schedule an informal meeting with the employee. Also, they can discuss his conditions & see what best could be done in this regard.
Confirm notice period & handover process: If the employee is not interested in retention, discuss with him about the notice period. Also, make a handover sheet to ensure that he completes all the work before he exits.
New Hiring: You have to decide about the new employee. If you require a new employee, start the hiring process immediately. Either you can go for new recruitment or internal sources. Divide this work into the team to make it easy.
Step 2: Notice period & other formalities
After accepting the resignation you should formally communicate employees through an email. Generally, the notice period is decided at the time of joining but in some cases, employees want to adjust their pending leaves against the notice period. You can decide about this mutually.
- • In some cases, when an employee exits, the company buys outs the salary of his notice period. This is known as “ Notice period buyout.” The employee will not serve the notice period & you can cut this amount from his full & final settlement. So, be ready for such situations.
- In some companies, the employee is a part of confidential profiles such as research & high profile client handling companies. In such cases generally, companies don’t ask employees to serve the notice period. They immediately complete all the exit formalities.
You should ensure to complete all the above formalities in such cases.
Step 3: Handing over of Pending Projects
Handing over of pending project is an important part of employee exit formalities. You can do the following things:
Timely handover & follow up: If the employee is handling some client you have to ensure that he hand over the project to another employee in a proper way. Employees might be lazy during his final days in a company. So, you should ensure timely handover & follow up on the employee.
Make a list of transferable documents: Check the information to be transferred. Make a list of transferable documents. If any access password is required you can take the password from the employee. If the employee deals with clients directly, you should inform clients about his exit. You should also inform you about a new employee who will now interact with them.
Step 4: NOC & Relieving formalities form different departments
Before leaving, an employee has to get NOC signed by senior employees from various departments as explained below:
- NOC is called “ No objection form.” This shows employees do not possess anything that he has to hand over to some other department.
- There is a process in which every department checks & give NOC. An employee has to handover the company’s property during his final days. The employee has to return all the things such as laptops, cell phones, office keys, the company’s credit card, etc.
You should send good luck mail to employees that will create a positive image of your company in his mind.
Step 5: Exit Interview
You should conduct an exit interview before the notice period comes to end. The interview is not only for joining but also exiting. You should conduct this interview during the last 2/3 days because the employee will share any problem openly.
The HR conducting the interview should assure the employee to keep his views confidential otherwise the employee will not speak the truth.HR should ask some important questions such as:
- Why does the employee want to quit the company?
- What could have changed their mind of resignation?
- Will they recommend your company to others. If Yes/No what are the reasons?
- Are there some tools that were not given to them during the job time that created difficulty for them?
- What is the best thing they like about the company?
- What is their dislike about the company?
- How is their experience with their reporting manager?
Exit interview gives clarity about three things:
Feedback: You get feedback & you come to know the reason for employee exit.
Share the findings with seniors: You can share the findings with your seniors.
Decide the changes should be made: You can follow up on various things after the exit interview.
You should document the questions of an exit interview for analyzing next time. You can make a log sheet of responses to exit interviews. You & HR will come to know the reasons for employees leaving the company. It will low down your attrition rate.
Step 6: Prepare for Farewell
Farwell leaves a positive impression on the employee. He feels the company cares for him & make his last day memorable. The team can throw a small party & he should feel like he is leaving a family. The team can also buy a gift to an employee or a card wishing him luck. You should organize a small get together to see off the employee.
Step 7: Full & final settlement & Relieving letter
You should do full & final settlement as follows:
- Finally, you have to give a full & final settlement to the employee along with his relieving letter. You have to clear all pending payments within 30 days of the employee leaving your company.
- Full & final includes unpaid salary, LTC, reimbursements, cash against, gratuity. You can perform a separate process for PF for which they have to apply. Your HR should help him with all these formalities.
- After completing all these processes you can give him a relieving letter. That letter relieves him from all responsibilities that might be used by the employee in some other company. You should mention details of designation, service period & resignation time in the relieving period.
Either the exit is due to the employee will or some issues you should ensure employee exit. it is about your company’s reputation, so you should avoid unnecessary delays. You can perform all these steps easily with the help of your HR software.
3: Objectives of Exit Formalities
Following are the objectives of exit interviews:
Prevents legal & security problems: It saves you from any kind of legal & security problems.
Sharing exiting employee’s knowledge: The exiting employee willingly shares his knowledge with his team members.
Improvements based on feedback: You can make improvements in your company based on your employee’s feedback. You can make your company employee-friendly.
Maintain relations with employees for the future: You should maintain a healthy relationship with previous employees. In case they want to come back you can take them back to your company. They are called “Boomerang employees” because boomerang is a tool that returns in a similar way in which it is thrown.
You should ensure that an employee does not quit the company out of some grievances. Employers & employees should focus on their future.
Exit policies are very easy and sometimes companies don’t follow because they don’t see any direct advantage/disadvantage. It is very important for your company& HR management.
You should follow all these steps in your company.You will realize that people are retaining in your company & there is increased employee engagement. You should also involve employee’s feedback in your policies.