Strategies for Smoothing Employee Exits and Ensuring Proper Handovers

Dear All,

Our organization is facing a problem in the exit process of an employee. Our organization is a small enterprise with just 40 employees in total. The problem we are facing is that almost all employees leave the organization without any prior intimation. This means they do not serve the notice period and exit without a proper handover. Such behavior hinders the smooth functioning of any particular department.

Our director has always been liberal in making policies or interacting with the employees. Therefore, he has never given any wrong message to the employees that could lead to unprofessional behavior.

To tackle this issue, we are considering asking for original documents like qualification certificates at the time of the employees' joining. This way, we can retain these certificates until they hand over their responsibilities or work to the organization at the time of their exit.

Kindly advise if this policy would help or worsen the situation. Also, please suggest how we can solve the aforementioned problem.

Regards,
Tandeep

Instead of doing this, you can follow any of the below:

1. Review the clauses of the Appointment letter regarding the notice period.
2. Redesign the salary structures; include the variable component that can be retained by the company in case the situation arises.
3. Sign an agreement with the employees and, if possible, keep a certain amount as security or make arrangements from the salary.
4. Do not give feedback to the future employers of these employees.

Thank you for the reply, Anurag. I would like to request you to kindly shed some light on the two points you mentioned. What could be the variable component of the salary that the company can retain if the employee does not hand over his work properly or leaves without notice?

Dear Tandeep,

In continuation of what Anurag said, you can have a process whereby:

1. Paid leaves that get accumulated in one's account should be reimbursed only at the time of separation.
2. Service/Experience letter should not be issued unless necessary documentation is done.
3. Variable payouts could include a bonus, to be considered only after the completion of a specific period of service. However, the final payout could be disbursed at the time of separation/financial year-end.
4. Notice period clause is followed. 15 days/1-month notice (depending on the nature of the business) to be served. Failing which one month's basic salary would be recovered from the full and final.
5. Moreover, PF, Medical reimbursement, LTA could be certain components that could form a part of the salary structure. Also, you may reimburse medical on a quarterly/half-yearly basis.

However, try to keep the exit process simple. I would suggest the following steps:

1. Take resignation in hard copy, duly approved by the reporting manager.
2. Intimate accounts to stop any payment if the resignation date is close to the payroll date.
3. Design a Final clearance form whereby the employee is supposed to take signatures of different dept. heads after handling charge. E.g., IT for desktops and deletion of email ID, Admin for stationary and cabinet keys, visiting cards, Finance for any kind of dues, Reporting Head for Files, documents, etc. The list goes on.
4. Exit interview form.

Once you get the resignation letter, final clearance form, and exit interview form, duly filled in and signed by the employee; you may send necessary details such as attendance, leave records, etc., to the finance dept. for full and final processing.

Make sure you define processes as to who does what.
Also, design a simple template for an exit interview and Final clearance so the employee just browses through the list and gets it signed by the respective concerned.

I believe this would solve your problem to a certain extent. Feel free to revert if you seek further help. I would be more than happy to help you out.

Regards, Miti

Hi Tandeep,

Thank you, Mitiam, for your valuable inputs!

The problem we are facing is quite common, and I believe many of us are dealing with the same issue.

We have already been following the steps you listed, but our main problem is that employees tend to leave the company after receiving their monthly salary. Even though salary checks are provided on the 4th of each month, they collect them and continue working normally. However, as soon as the salary is credited, they leave without transferring their responsibilities to the relevant person, leaving the company with nothing to hold on to.

You suggested not issuing the experience letter to employees who exit the company without following the proper exit process. These employees may not necessarily require the employment certificate as they can easily obtain a duplicate in the market. Alternatively, they inform their new employers in advance that due to not serving the notice period, they might not receive the employment certificate and related documents.

Regarding Provident Fund (PF), our organization is small, with just 18 employees, and we do not include the PF component in the salary.

In terms of paid leave, if an employee has exhausted all their paid leave entitlements, we are left with no option to adjust for any loss or damage.

Regards,
Tandeep

In that case, if the handover is of high importance, it is advisable to return to the base, i.e., the pre-joining and joining of the employee. It is crucial to have all the details of the employee such as contact numbers, address, and references; make sure to reach out to the person through legal channels. If you have a salary account for the employee, you can request the concerned person at the bank managing your account to reverse the held amount.

Dear Tandeep,

In continuation of what Anurag said, you can have a process whereby:

1. Paid leaves that accumulate in one's account should be reimbursed only at the time of separation.
2. Service/Experience letters should not be issued unless necessary documentation is completed.
3. Variable payouts could include a bonus, to be considered only after completing a specific period of service. However, the final payout could be disbursed at the time of separation/financial year-end.
4. The notice period clause is followed. A 15-day/1-month notice (depending on the nature of the business) should be served. Failing to do so would result in one month's basic salary being recovered from the full and final settlement.
5. Moreover, PF, medical reimbursement, and LTA could be certain components that form a part of the salary structure. Also, you may reimburse medical expenses on a quarterly/half-yearly basis.

However, try to keep the exit process simple. I would suggest the following steps:

1. Take resignation in hard copy, duly approved by the reporting manager.
2. Intimate accounts to stop any payment if the resignation date is close to the payroll date.
3. Design a Final clearance form whereby the employee is supposed to take signatures of different department heads after handling charge. E.g., IT for desktops and deletion of email ID, Admin for stationary and cabinet keys, visiting cards, Finance for any kind of dues, Reporting Head for Files, documents, etc. The list goes on.
4. Exit interview form.

Once you receive the resignation letter, final clearance form, and exit interview form, duly filled in and signed by the employee; you may send necessary details such as attendance, leave records, etc., to the finance department for full and final processing. Make sure you define processes as to who does what. Also, design a simple template for the exit interview and Final clearance so the employee just browses through the list and gets it signed by the respective concerned.

I believe this would solve your problem to a certain extent. Feel free to revert if you seek further help. I would be more than happy to assist you.

Regards, Miti

I totally agree with your views. I appreciate your efforts for writing all the information; it is very helpful to those who don't know the proper process.

Regards,
Rajni Nagpal