How to Handle Sudden Employee Departures and Minimize Financial Losses?

Issue with Employee Departures

Three of my team members abruptly left the company two months after completing their three-month probation period. They essentially worked for only four to five months and left, citing various reasons such as family issues or health concerns on different dates. We did not provide any appointment letters as the process of submitting previous work documents was still pending.

Financial Implications

The issue at hand is that we issued uniforms and invested in new laptops for them, which are now being used by succeeding employees. However, regarding the uniforms, it was mentioned to them that if they were to leave within a year, the employee would need to bear the full cost of the uniforms.

Course of Action

Since they left abruptly without completing the one-month notice period, clearing their dues, or obtaining a relieving document, what should be the course of action against these former employees? I believe I made a mistake by not providing them with appointment letters. However, even if someone just leaves after receiving their salary, what actions can be taken?

I would greatly appreciate any suggestions to avoid financial losses and the loss of time involved in undergoing the recruitment process again.

Examining the Causes of Employee Turnover

Examine the causes of people leaving so quickly. Is your wage level lower than the industry standard, or are any working conditions so difficult that people quit early? Expenditure on uniforms is one minor issue compared to the issue of selecting new employees, training them, and then seeing them abruptly leave. The root cause of dissatisfaction needs to be examined first and resolved. You really cannot stop an employee from leaving if they are all set to go.

Steps to Retain Employees

Give priority to steps to retain employees rather than taking action against those who leave. Your setup should be attractive so that employees compete to work in the place. Therefore, try and change the working atmosphere first.

Employee Rights and Employer Responsibilities

Important! No employee should be stopped by an employer if they want to leave for any personal reasons.

Employers not providing offer letters to employees before their first salary is not correct. Employers should issue offer letters to employees. If employees are clear on why they are leaving the company, it is better to relieve them immediately (as they have not received any offer letter, so no notice period is required). The cost of uniforms should be covered by the company, not the employees. Why should they have to pay for it?

Legal Considerations and Asset Management

Based on the information provided, do they fall under any specific act? Apart from uniforms, have they taken any assets or digital data? If so, you can issue a letter addressing these matters to them.

The company must maintain a good relationship with its employees and uphold proper processes and policies.

Thank you for taking the time to respond. We have no problem if an employee leaves; however, it has to be done in a proper way. This company is not very old, only 10 years, and the other staff members are all working well, some since its inception. Salary could be a reason for leaving, as different employees have different expectations.

Employee Retention Practices

Some companies do have bonds to retain employees, including Wipro, Cognizant, etc. We have never had any bonds, and our employees are working well. Until now, no employees have complained about work conditions. If they have, management has amicably worked on it.

Uniform Investment Policy

Since the company invested in uniforms and informed all employees that if they leave within a year, they have to bear the cost, it is certainly a significant deal for the company.

Pending Documentation

The appointment letters were not given to them because they did not submit their qualifications/address proof, etc. The HR department was awaiting this information.

Seeking Advice on Employee Retention

The concern is where we went wrong and what steps should be taken to retain employees.

Best,
D

Understanding Employee Exits and Retention Strategies

You cannot consider a company in the inception stage if it has already crossed 10 years. Your satisfaction might stem from the fact that everything seems in order, as other staff members have been working since the beginning and have not raised any complaints. However, you should not dismiss the three staff members who left in quick succession as mere accidents, as such occurrences happen in every establishment. In my opinion, it is crucial to investigate the reasons and root causes behind these exits. While everyone has personal problems, a common reason cited is domestic issues. It is rare for people to leave due to domestic grounds rather than for better opportunities.

The Importance of Appointment Letters

Don't you think it is unwise for someone to accept employment without an appointment letter? Today, you are discussing the issue of employees leaving the company. Consider the reverse scenario where someone might ask the forum, "I was working at X Company without an appointment letter, and HR asked me not to come from tomorrow."

The Role of HR in Retention

As an HR professional, your role is crucial in organizing things effectively. To combat unforeseen circumstances in the future, it is essential to apply a retention policy. Consider issuing uniforms at a cost to the employee or requiring them to adhere to a uniform policy. Develop a system and adopt policies that manage these issues rather than relying solely on individuals. Opportunities exist, but you cannot enforce them if you have not provided an appointment letter, making your company's terms binding on them.

Thank you very much, Prabhat. I understand what you meant. Do you think we can send an exit questionnaire via email to figure out what went wrong? Certainly, not receiving an appointment letter was a big mistake, but mistakes happen, and we would definitely like to avoid it in the future.

Best,