When a senior employee leaves, it’s a critical moment for your business, but handled well, it becomes an opportunity to strengthen leadership, protect key relationships, and secure your company’s future. With the right HR strategy, you can manage senior departures smoothly while safeguarding confidential information, maintaining team stability, and preserving your reputation.
This guide explains everything HR professionals and business owners need to know about managing senior exits: how to handle notice periods, negotiate exit terms, protect business interests, and plan for leadership transitions. You’ll get practical, legally sound guidance to help you navigate senior departures confidently and reduce organisational risk.
If you want tailored legal support on senior exits, restrictive covenants, or executive-level agreements, our employment law solicitors are ready to help you plan the next steps with confidence.
Jump to:
- Why is it important to manage senior employee exits well?
- Advice on ending a senior employee’s contract
- What if a senior employee has not chosen to leave and has outstanding claims or grievances against my business?
- Understanding and enforcing a senior employee’s restrictive covenants
- Practical considerations on the exit of a senior employee
- Communications about a senior employee’s exit
- How to manage the transition after a senior employee leaves
- How to minimise the impact on remaining employees
- Do I need to recruit and replace straight away?
- How can we help?
Why is it important to manage senior employee exits well?
Poorly managing the exit of a senior employee can have serious consequences for your business. A disgruntled manager or director may raise allegations that could harm your reputation and profile, so it is essential to address these swiftly before they gain wider attention. Demotivation or discontent in an existing senior employee can also lead to reduced productivity, poor supervision, and negativity in the workplace, further disrupting your business.
However, handling their departure effectively can turn them into a positive ambassador for your brand, maintain their respect for your business, and even open the door for their potential return, saving you the costs and effort of future recruitment.
Advice on ending a senior employee’s contract
This will of course depend on the specific circumstances but to ensure consistency and a well-thought-through approach it is advisable. It may be helpful also to have a plan in place for any unexpected departures of key employees, as notice periods can pass quickly, particularly if there is a lot to hand over to an internal or external replacement. Your business could be disadvantaged if key information leaves with the senior employee.
It is critical that whatever the reason for the senior employee leaving, communication remains clear and professional and that, so far as possible, the employee feels appreciated for their service and leaves with a positive feeling about your business. Inexpensive gestures such as a leaving party, gift or card can assist can smooth the transition.
More formal exit interviews will also assist with allowing you and the employee to discuss any remaining points of disagreement and deal with practical matters, such as return of property, how the departure will be communicated internally and externally, and reminders about social media profiles being updated to reflect the employee is no longer employed by you.
If there is likely to be some resistance to the exit because you have made the decision to part company, you may want to consider offering the employee a settlement agreement to minimise future employment claims against your business, re-state any post termination restrictions and to protect confidential information relating to your business and arrangements for leaving.
What if a senior employee has not chosen to leave and has outstanding claims or grievances against my business?
As with any staff member working for your business, a senior employee should have access to a clear, written grievance procedure. Good communication at an early stage can prevent a formal grievance from being lodged and can save your business time and resources.
However, if a formal grievance is raised, your grievance procedure will need to be followed carefully and consistently. If a grievance cannot be resolved, it will be for you to decide whether to offer to settle any potential claims under a settlement agreement or defend the claims in an Employment Tribunal if the employee pursues their complaints further.
Whichever approach you decide to take, seeking specialist legal guidance at an early stage is advisable to help you assess the potential risk to your business of a senior employee exit and how to minimise it.
Understanding and enforcing a senior employee’s restrictive covenants
One of the most important considerations when a senior employee exits is the knowledge they have about your business. What damage they could do with that knowledge if they were to join a competitor, solicit or deal with your clients and suppliers or poach your other senior staff? For this reason, most senior employment contracts or director service agreements will contain restrictive covenants or post-termination restrictions. Any restrictive covenants must be reasonable and go only as far as is required to protect the legitimate business interests of your company.
If you are concerned with protecting restrictive covenants contained in your employee’s contract of employment, you will need to ensure that if you are terminating an employee’s contract, you do not do this in breach of the contract’s terms. This might sound obvious, but for example, if incorrect notice is given, this could amount to a breach of contract, meaning that your employee is then free from their contractual obligations, including any post-termination restrictions. If you would like bespoke assistance on whether your post-termination restrictions are likely to be enforceable against an employee, our employment law solicitors can assist with this.
Settlement agreements can be helpful if you are concerned about post-termination restrictions of an outgoing employee, as the restrictions can be re-stated and agreed again as part of the package.
Practical considerations on the exit of a senior employee
Managing the departure of a senior employee, whether they resign or are served notice, can be complex. Keeping them motivated and productive during their notice period can prove challenging. Where their contract permits payment in lieu of notice, this option may be worth considering if it aligns with your business needs.
If work or projects need to be completed or handed over, it is advisable to agree, in detail, on what the employee can realistically achieve during their notice period. A thorough understanding of their responsibilities is essential to avoid anything being overlooked. While a job description may be a good starting point, it could be outdated, particularly for long-serving employees, so a conversation with the employee is often necessary.
If keeping the employee physically present in the office is not beneficial due to concerns about disruption or demotivation, a period of paid garden leave may be an alternative. However, you should ensure the employee remains contactable during office hours if required. This arrangement depends on the contract containing a garden leave clause; otherwise, the employee's consent will be needed.
Final steps should address the return of company property, including confidential information and documents, along with the collection of the employee’s personal possessions. Make sure to obtain and update passwords to any systems or hardware before the employee's last day.
Additional considerations apply if the senior employee is also a director or shareholder, such as their resignation as a director, notification to Companies House, or the transfer of shares. If you require support with any of these matters, our employment law solicitors are on hand to assist.
Communications about a senior employee’s exit
It is crucial that without breaching confidentiality, and so far as is possible, you keep the rest of the team in the loop about what is happening. Rumour and anxiety surrounding workplace changes can be an unwelcome distraction from staff focusing on performing their roles effectively. High visibility of the remaining senior management is key, and a culture of open communication can help reassure and support staff members in the exiting employee’s team.
Once the departure has been discussed and finalised with the outgoing employee, minimise delays in communicating the departure internally and externally if appropriate. You may wish to agree the wording and timing of an announcement with the employee, which could also form a schedule to a settlement agreement, if you decide to enter into one as part of the employee’s exit.
As part of the wider communications relating to an employee’s exit, you should also consider making amendments to organisation charts, internal documents, websites and phone lists, once the details are finalised.
The exiting employee should also be advised to update their social media profiles to reflect that they are no longer a part of your business from their termination date, and work emails should be diverted after that time.
How to manage the transition after a senior employee leaves
While leadership risk and succession planning should be regularly reviewed, it often falls low on the priority list when things are running smoothly. However, with careful consideration, senior replacements can be appointed quickly, helping to minimise disruption. If your succession planning has paid off, you may already have someone within your business who has worked closely with the outgoing employee and is ready to step up. This can ensure a smooth transition as they are likely to be familiar with the role, systems, team, and workplace.
If recruitment is needed outside the department or externally, the transition can be more challenging. In amicable situations, having the new recruit shadow the outgoing employee during their notice period may prove beneficial. If that is not feasible, the outgoing employee should provide a detailed written handover in good time before their last day and remain available during their notice period to address any queries from the team or their replacement.
An exit interview is also a useful tool, particularly if it is led by someone impartial. This is an opportunity for the exiting employee to provide honest feedback about the role and working environment, which can then be used to make any changes to avoid another senior exit.
How to minimise the impact on remaining employees
In terms of the remaining team, clear and early communication will be key in reassuring employees about their own roles and keeping them updated about why the outgoing employee is leaving and about who the replacement will be. A primary point of contact for any questions or concerns can be helpful, as is positive messaging about how the departure provides an opportunity to build a new team and improve some areas of the business.
Do I need to recruit and replace straight away?
This will depend on the role of the senior employee you are looking to replace. It may be that the role is very niche, and so it will be difficult to find a replacement. It may be that you can recruit short term contract cover whilst you find the correct candidate, which has the advantage that the fixed term contract becomes permanent if the individual suits the role.
If the role requires specialist training which will need to take place before the employee starts work, you may look to start the recruitment process sooner rather than later. Alternatively, as already discussed, you may be able to promote one or more of your existing staff to fill the role. Our article Finding and retaining senior staff will give you more insights into finding the right person for the job.
If the outgoing employee is not serving their notice, it will be essential to redistribute their responsibilities among the remaining team so that tasks aren’t overlooked. This also gives you an opportunity to assess whether to recruit a replacement, adjust the role’s duties and hours, or restructure the team to absorb the work.
If this leads to cost savings for the business, it is important to manage this carefully. Remaining employees may feel undervalued if they are taking on additional work without recognition, which could result in further resignations. Offering incentives to those stepping up could help maintain morale and retention, depending on the situation.
How can we help?
Losing a senior employee can feel overwhelming, but with the right approach, it can also be an opportunity to strengthen your business. If you need expert advice on managing senior departures, safeguarding your business, or planning for a smooth transition, our experienced employment law solicitors are here to help. We offer tailored, practical support that ensures your business stays on track.
