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4 Steps for Handling a Key Employee's Departure When a trusted member of your team decides to throw in the towel, here are four steps to ensure a positive departure.

By Adam Toren


Having a trusted team member leave your startup is never easy, but it doesn't have to be business crippling.

With Yahoo's recent acquisition of Tumblr, the micro-blogging site lost a key employee -- its fifth hire and creative director Jacob Bijan. The many employees who have left gaming company Zynga has been well documented in the media. And with engineers in short supply and high demand, poaching at major tech companies occurs on a regular basis.

So if -- or better yet when -- it happens to you, don't be surprised. Just remember to keep your cool and follow these steps to ensure a positive parting:

1. Understand their perspective.
Even if your startup is trucking along, seeing traction and has big plans to raise a round of funding, a larger company can swoop in and nab one of your employees for a much larger paycheck. Consider the example of Facebook. At the tech behemoth, if a coder gets an offer he almost have no choice but to accept it (if it makes you feel better it has been reported Google has offered its employees millions to not leave for the social network).

While being priced out by a larger company is a potential scenario, there are numerous other reasons for someone wanting to jump ship. Understanding their reasons could be a turning point for you or your company. If you feel comfortable, ask them to give it to you straight. If not, ask them to write out their reasons for leaving. If they deserve a recommendation, give it to them.

Related: 7 Steps to Hiring Your First Employee

2. Sever gracefully.
If you're parting on good terms, make their last day a reason to celebrate their time with your startup, such as serving an ice cream cake during lunch or a trip to the local watering hole. If the employee is leaving on not-so-great terms, provide a note expressing your regret that it didn't work out and thank them for their contribution.

After they've given you their two-weeks' notice, it is not your job to announce their decision to all of your team (not including HR and other hiring managers). Give your employee space and let them look back on their time with your company fondly.

3. Headhunt.
Don't put off the hiring process. Get it done and get your replacement trained as soon as possible. You should first figure out if anyone on your team can step into the former employee's shoes. If not, ask your peers and employees for recommendations, while also posting the position opening on job sites.

Once you narrow down potential candidates, make sure they'd fit in with your startup culture. Ask yourself if they are someone you'd be able to spend countless hours with during a crunch-time weekend.

Related: 6 Keys to Hiring and Retaining the Best Employees

4. Keep in touch.
Once the employee has left, don't be a stranger. Forgetting that someone exists is generally not the best course of action. Even if you aren't happy with the departure, rage cools, feelings mend and you may come to realize it was for the best. Keep their email in your contacts and wait awhile before asking for an update on their life. By being nice, people are more willing to throw business, partnerships and other networking opportunities your way.

How did you handle a key employee departure? Let us know in the comments section.

Adam Toren

Serial entrepreneur, mentor, advisor and co-founder of YoungEntrepreneur.com

Adam Toren is a serial entrepreneur, mentor, investor and co-founder of YoungEntrepreneur.com. He is co-author, with his brother Matthew, of Kidpreneurs and Small Business, BIG Vision: Lessons on How to Dominate Your Market from Self-Made Entrepreneurs Who Did it Right (Wiley). He's based in Phoenix, Ariz.

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