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Managing Employee Notice Periods
Notice periods are a two-way street. On the one hand, they protect the business, giving it time to replace a departing member of staff.
On the other hand, it allows the employee a time and/or financial buffer if the company wants to part ways with them.
In this article, we’ll examine notice periods and how you as an employer should use them when a team member resigns.
What is a notice period?
Simply put, when an employee announces their resignation, they are giving notice of their intention to leave. Running a business would be hard if the staff could get up and walk out the same day. Who would do their work? Where were they on particular projects or sales progressions?
Therefore, the notice period is a contractual period (the length is in the employment contract) where the employee has to remain within the business.
Even if a written contract doesn’t exist, you must provide minimum statutory notice periods, depending upon how long they have worked:
- Less than one month - no notice
- One month to two years - one week’s notice
- Two to 12 years - one week’s notice for every year worked, up to a maximum of 12 weeks
Now, the company has time to recruit a replacement and to reassign the leaver’s workload. It keeps disruption to a minimum.
Are notice periods longer for senior managers?
In many cases, yes. As an employer, you want to protect your interests by extending the notice period for senior management. Three months is typical, while the highest company positions might be six months or even longer.
Longer notice periods give you some benefits:
- If a senior sales manager leaves, you will need longer to find and employ a replacement.
- Longer notice periods tend to reduce turnover since it can be an employee benefit (the employee gets a larger payoff if you make them redundant).
- If an employee is leaving for a competitor, you get to prevent them from joining too quickly (and taking your customers with them).
Should you force an employee to serve their notice period?
Employees working the full notice period may be at best unhappy and at worst disruptive.
You have to strike the right balance before letting them go. Your priority is the smooth running of the business, and you can’t let anyone go without having replacements in place.
Sometimes, however, the relationship is so strained that keeping the leaver in the office has a negative impact, especially in a sales environment, where morale and team spirit are so important.
Your options are, therefore:
- Force the leaver to remain throughout their notice
- Agree to any earlier leaving date and stop paying them accordingly
- Keep paying them but force them to remain at home (on gardening leave)
Another scenario is when the leaver simply walks away.
You stop paying them immediately, and you are within your rights to pursue them legally for breach of contract. However, the cost of legal action is prohibitive and pretty pointless as the person is leaving anyway, and it’s also not good for office morale.
In these situations, it’s always best to try and reach a compromise before things get too out of hand. So, for example, if you have a sales executive on one month’s notice who wanted to leave immediately, perhaps agreeing on them staying for two weeks would prevent them from walking out AND give you time to plan for a replacement.
What exactly is gardening leave?
After resignation, one of the primary employee rights is to receive full pay during the notice period.
However, there are circumstances where you might not want the employee to remain working with you. What if the leaver was jumping ship to join a competitor?
Clearly, in these circumstances, you don’t want them in your office a moment longer, where they might have access to valuable company information, secrets their new employer would love to know.
Equally, you don’t want to agree to an instant leaving date since that would only help your competitor. It’s in these cases where gardening leave is appropriate.
Here, you continue to pay the leaver in full for the whole notice period, but on the condition that they remain “at home” and do not start work elsewhere.
It’s called gardening leave because it’s supposed the leaver has nothing else to do, so tends to the garden.
Striking a balance with notice negotiations
As an employer, there are options open to you when staff hand in their notice.
It’s a fine line between ensuring you have continuity of service when someone leaves and staying and being disruptive or affecting morale.
You want to earn a reputation for being fair, but there’s nothing wrong with being firm, too. Be too lenient, and every leaver will expect the same treatment.
Whichever way you go, you have to remain consistent so that everyone knows where they stand.
In reality, most people will respect your business for playing fair, and if they do have to stay for a portion of their notice period, they’ll be more likely to remain productive.
Be patient when you’re the recruiter
While we’ve focused here on notice periods when your staff leave and why it’s important, keep this in mind when the shoe is on the other foot and you’re recruiting a person from another company.
While you want them to join as soon as possible, you’ll have to respect the notice period at their current employer. You can’t have it both ways!
Aaron Wallis are a national specialist sales recruitment agency comfortable across many sectors, however more recently the majority of our clients utilise the below offerings:
Date published: 20th November 2022
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by Darren Dewrance
About the author
Darren spent six years in sales and field sales before joining the original sales recruitment specialist, Austin Benn, in 1998. After achieving the status of top consultant, out of about seventy at the time, Darren rose from Senior Consultant to Operations Manager of the commercial sector before leaving to join a London based Headhunter in 2003 before setting up Aaron Wallis with Rob in October 2007.
With a natural leadership style, Darren is an expert on putting his finger right on the heart of the problem. His natural commercial instincts have helped hundreds of employers make better recruitment decisions. Darren is married with two children, and when not at work or with his family, he likes nothing more than to be on the side of a river or a lake with a rod in his hand.
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