It's something that every manager dreads - the day a key employee announces he or she is leaving the firm. Such departures can be blows to productivity and morale, but there are some important steps to take to minimize disruptions to the firm.

While it's natural to feel frustrated, and sometimes even betrayed by an employee's departure, it's crucial to handle these situations professionally. Keep in mind that your other employees are watching how you handle employees' exits, and these events will influence their views on the management's overall treatment of staff. Furthermore, you never know when the departing employee may be in a position to hire your firm as a subconsultant, or when he or she may decide to return to your firm.

Why are they leaving?
The first step is to find out why the employee is leaving. The most important reason for this is to find out if there are any organizational issues that are responsible for the departure. Is compensation for the position significantly lower than what your competitors are offering? Are there management problems in a certain division that are driving people away? (Sometimes employees want a new boss more than a new employer.) Do people with certain skills feel that they are not being challenged or don't have the opportunity to advance their skills and careers?

Frequently, departing employees are reluctant to give honest answers on why they leave. Try to have an executive outside of the departing employee's division or an HR representative conduct an exit interview. This may spur more honest dialogue. While you shouldn't jump to conclusions based on just one interview, you should look for patterns on why people leave the firm to see if it makes sense to implement new policies to improve retention.

Letting everybody know
The next step is to announce the exit to the rest of the firm. It's best to do this shortly after the employee informs management of his or her decision because it's likely that some staff members will have to pick up the slack for a while. They'll want to know about that as soon as possible so that they can rearrange their work schedules and personal lives, if necessary.

Non-compete clauses
Non-compete clauses are commonly part of management-level employees' employment contracts. If the departing employee has one of these, review the terms with him or her and state that you expect adherence to it. If there are any difficulties on this issue, you may want to have your attorney draft a letter explaining the non-compete agreement to the employee.

How to make the transition
It's vital to quickly decide how to cover for the departing employee. How can the employee best make use of his or her remaining time with the firm to ensure that his or her pending work gets done? Should the departing employee train another staffer on a certain aspect of his or her job?

Have the details of what the departing employee needs to do during his or her last two weeks (or more) sketched out in writing. Make sure the employee submits a final summary on what needs to be completed on any projects on which he or she is involved. It should include a list of all outstanding projects and their status, as well as contact people and other resources. A formal, written plan helps streamline the transition and ensures that everyone clearly understands expectations and timelines.

Planning to fill the vacancy
Review the job description for the position to determine if it is accurate or if it should be updated. What has been learned during this employee's tenure that might be helpful in restructuring the position or modifying selection criteria? Should the duties of this position be divided among others? Would the firm be best served if two less experienced and less costly people were hired instead? This may be a good time to evaluate the staffing needs of the group affected and see if a reorganization of duties and responsibilities is in order.

Notifying customers
If the departing employee had regular contact with customers, subconsultants, or key vendors, these individuals should be notified as soon as possible. The departing employee likely knows how these contacts could most effectively be handled. If only a few contacts are involved, direct contact by the employee may be appropriate. If that's impractical, a letter from the employee, the manager, or the organization may be the best option.

Saying goodbye
For employees who leave on good terms, having a catered lunch or some similar event in their honor is a nice parting gesture. While it may be appropriate to be more extravagant with the event for a long-time, highly valued worker, it's best to be fairly consistent for all. Remaining employees will note any wildly varying parting events and gifts that they may interpret as inappropriate favoritism. But remember, the departing employee may be in a position to send business your way in the future, so make the send-off a positive one.