When a great employee -- someone who has been with your business through good times and bad -- finally decides to move on, it can be difficult to face the situation. Although you might prefer to lock your office door and mourn the loss, the best thing to do is show grace and acknowledge what the person meant to your organization.
Before you turn your attention to a farewell party, it’s essential to do everything you can to prevent the employee from leaving in the first place. Assuming your worker was in a management or executive position, there could be some pretty substantial financial costs associated with replacing the person.
There’s the cost of hiring a new employee, including expenses related to posting the job opening, advertising, interviewing, screening, etc. Then you have the challenge of bringing the new hire on board, which includes training and attention from upper-level management.
On top of that, there’s a loss of productivity. It often takes a new employee 12 to 24 months to attain the same level of productivity as the person who vacated the position. Finally, you may have to deal with other employees who see turnover as a bad sign and start to disengage or worry about their own future.
But how much are we talking? Consider the average cost of losing an employee, according to a recent study.
· For someone who earns a mid-range salary -- $30,000 to $50,000 -- you can expect to spend 20 percent of their annual salary for replacement. In other words, an employee who makes $45,000 represents a cost of $9,000.
· In the case of a highly educated employee in an executive position, the cost could be as much as 213 percent of annual salary. A CEO who makes $100,000 might set your firm back as much as $213,000.
Make sure you grasp the total potential cost of losing a solid employee. The person may be leaving for a very good reason, but never let him or her say goodbye for a petty or small reason.
Sometimes there’s nothing that can be done. Once you realize that the person’s decision is final, don’t drag your feet. The best thing you can do for the future of your firm is to host a tasteful farewell that exhibits your appreciation and enables closure.
Here are some tips worth considering.
1. Understand the Reason for Leaving
The key to throwing the perfect farewell party is to recognize the reason for leaving. If the employee is heading into retirement, you probably want to thank that person for contributions to both your company and the other organizations he or she worked with in the past.
If the employee is being promoted to a higher position within the same firm (perhaps at a different location), the farewell should be more like an encouraging send-off party. Other reasons for leaving include lateral moves or transfers, departure for a new employer, returning to school, or even deciding to stay home with children.
Each situation calls for a different response, so make sure you take the situational factors into account.
2. Ask Close Coworkers to Take Charge
In big companies, upper-level management may not know every employee well. Thus, a farewell party will seem impersonal and forced if it comes from a manager who only knows a little about the individual.
In order to make the farewell truly meaningful, assign a couple of close coworkers to handle the party planning.
3. Reminisce on Fond Memories
A farewell party should be seen as an opportunity to reminisce about fond memories. A lot will depend on how long the employee has been with the company, obviously, but you should be able to highlight a few stories and refer to them during the party.
An even better idea is to create a slide show with photos, words, and music. It doesn’t have to be long or complicated. There are plenty of online tools to make the process easy, and three or four minutes should suffice.
4. Think Carefully About Gifts
What’s a party without gifts, right? Well, perhaps. You’ll have to make sure you don’t violate company rules or put the departing worker in an unfair situation.
Review the company’s gift-giving policy to make sure any gifts fall under the upper limit that can be spent on an employee. Furthermore, be aware that some gifts -- such as gift cards or a cash gift -- could subject the employee to tax obligations to the IRS.
It’s best to let coworkers pitch in and present a gift. This avoids the aforementioned issues and will probably mean more to the honoree anyway.
5. Avoid Surprise Parties
The last few days for your employee could be somewhat stressful. Not only is the person thinking about the next thing on the list -- retirement, a new position, etc. -- but also about handing over responsibilities and information to the individual who assumes the old position.
Then there’s the issue of packing up personal belongings, retrieving information that may be needed from company email addresses and devices, and filling out paperwork for HR. Basically, it’s wiser just to nix the surprise party approach.
It may be fun to do something a little out of the ordinary, but the employee won’t be able to enjoy it as much as he or she would if the party were planned in advance. The person will mainly be thinking about all the things that need to get done.
6. Speak With Remaining Employees
The final suggestion is to take a few minutes and talk with the remaining employees after the party is over. You obviously don’t want things to be awkward, so it may be best to wait until the departing staffer is officially gone and off the premises.
In this conversation, explain to employees how excited you are to move on with another chapter and how you expect everyone to step up and fill in the gaps. The key is to deflect attention from turnover and focus on stability.
We’ve all seen situations where an employee turns in a resignation and things get ugly. IT shuts off access to the person’s computer, security is called to escort him or her out of the building, nasty words are exchanged, and so forth.
Though it may not be easy to say goodbye, drastic measures do nothing but make the situation worse. They create animosity between the remaining employees and management, and have a negative impact on company culture.
If you want to position your company well for the future, giving every employee a tasteful sendoff is the proper thing to do. It’s a chance for you to pause and say thanks while figuring out how to push forward.