Do three things, in this order. Find out the real reason before you respond to the stated one. Protect what leaves with them — the relationships, the knowledge, the half-finished work nobody else can see. Then talk to the people you would least like to lose next, before the news reaches them sideways.
Treat the resignation as information. Somebody who was good enough that you are worried about losing them has just made a considered decision about your business, and they will tell you why if you ask properly in the next two days. In six weeks, when they are working out their notice and have already mentally left, they will not.
What should you do in the first 48 hours?
Keep the first conversation short and do not negotiate in it. Thank them, say you are sorry to hear it, and ask for a proper conversation tomorrow. The gap stops you saying something you cannot take back, and lets them prepare a considered answer.
In the second conversation, ask: when did you first start thinking about leaving? The answer is often a specific moment several months earlier — a promotion that went elsewhere, a project that got taken off them, a conversation with you that landed badly.
Ask two further questions: what would have had to be different, and what should I be doing for the people who are staying? Someone who has already decided to go can answer these more freely.
Should you make a counter-offer?
Rarely, because money is often not the real reason.
Money is the easiest reason to give without insulting anybody. The reasons underneath are more often the job itself, the manager, the absence of a visible next step, or small frustrations nobody raised. Paying more for the same job with the same manager tends to delay the departure.
A counter-offer also teaches the rest of your team that the way to a pay rise is an offer from somewhere else.
The exception is when you can name something specific that has changed: a role that has opened, a promotion you had already decided on, or a pay correction overdue for a year. Present it as a correction. Pay and promotion covers how to set that structure so the question does not arrive this way.
What does replacing them cost?
The recruitment fee is the only part with an invoice attached. This illustrative build-up uses a £38,000 role; substitute your own figures.
- Recruitment. An agency at 18% of salary is £6,840. Advertising and doing it yourself is cheaper in cash and more expensive in your time.
- The vacancy itself. Three months is a realistic gap between resignation and a new starter being in the building. That period is covered by overtime, by a temp, or by work not getting done, and the third option still has a cost.
- Ramp-up. A new person reaching full output over three months is roughly £4,750 of salary paid against partial contribution.
- Your time and your managers' time. Thirty hours across shortlisting, interviewing, offer and induction is conservative. At a notional £45 an hour of owner time, £1,350.
That is over £13,000 for one mid-level replacement, and it excludes the parts that resist arithmetic entirely: the customer who liked dealing with that particular person, the process only they understood, the six months of context that walks out with them.
That is far more than the cost of a proper monthly one-to-one, a clear progression conversation once a year, or fixing the thing three people have now mentioned.
What do you protect during the notice period?
Treat the knowledge in their head as the asset, and run the notice period as a handover project with a named owner and a written list.
- Relationships. Which customers and suppliers deal with them personally? Introduce their successor — or you — while they are still there and still willing to make the introduction warm.
- Undocumented process. Ask them directly: what do you do that nobody else knows how to do? Then have them write it down quickly.
- Work in flight. Anything half-finished needs a name against it before their last week.
- The exit conversation. Hold it near the end, when the emotion has settled. Ask what you should change. Write down the answer even if you disagree with it.
Part on good terms. People come back, and the way you handle someone's departure is watched closely by everyone who is staying.
What do you tell the team, and when?
Tell them early, factually and yourself, because the gap before an announcement fills with speculation. Say who is leaving, roughly when, what is happening to their work in the meantime, and that you are recruiting. You do not need to explain their reasons, and you should not invent a comfortable version of them.
Then have a short, individual conversation with each of the people you would least like to lose next. Ask one question, what would make you think about leaving, and wait for the answer. The answers are often specific and cheap to fix. This is regular ground in leadership coaching.
What is the resignation telling you about the business?
Look for a pattern across departures.
Ask whether the reason given points at something structural. If they left because there was no next step, your business has a progression problem and the next capable person will hit the same ceiling. If they left because of a manager, you have a management problem you have probably been aware of for a while. If they left because the work had quietly become something they did not sign up for, you have a role-design problem that is likely repeating elsewhere.
If losing one person threatens the business, the resignation has revealed a concentration risk that exists whether the person leaves, falls ill or takes a holiday. Stop being the bottleneck and building a high-performing team both start from there, and it is a common reason owners come to business coaching in the first place.
What to do this week
- Book the second conversation, and ask when they first started thinking about leaving.
- Write the handover list before the last week, and put a name against every item on it.
- Tell the team the facts yourself, before the news travels sideways.
- Have one conversation with each person you would least like to lose next.
- Write down the reason they gave, and check it against the last two people who left. If it is the same reason, that is your next project.
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Frequently asked questions
Should I ever make a counter-offer?
Occasionally, and only when you can name a specific thing that has changed other than their leaving. A promotion you had already decided on, a role that has opened up, or a pay correction you know is overdue are all defensible. A number invented on the day they hand in their notice is not. A reflex counter-offer answers a question they did not ask: people often leave because of the job, the manager or the lack of a next step, and money is the version of the reason that is easiest to say out loud. Pay more for the same job and the same reason is still there in six months.
What does it cost to replace someone?
More than the recruitment fee. Take an illustrative role on £38,000. A recruiter at 18% is £6,840. A vacancy that runs three months means either overtime, temporary cover, or work not done at all. A new starter reaching full output over three months represents roughly £4,750 of salary against reduced contribution. Add perhaps thirty hours of your own and your managers' time on shortlisting, interviewing and induction. That is more than £13,000 for one mid-level replacement, before you count what walks out of the door in relationships and knowledge.
How do I stop other people leaving too?
Talk to them, individually, before the rumour does. A resignation from someone well regarded makes everyone else quietly reassess. Tell the team the facts early, say what happens to the work in the meantime, and say that you are recruiting. Then have a short one-to-one with each of the people you would least like to lose, and ask them directly what would make them think about leaving. The answers are often specific and cheap to fix. Act on the cheapest fix within a fortnight, and tell the person you have done it.
Is losing a good person always a failure on my part?
No. People leave for reasons that have nothing to do with you: a partner relocating, a change of direction, a business that cannot offer the next step they want. A small business will always lose some people to organisations with more rungs on the ladder. What matters is whether you can tell the difference. If three people leave in a year for three unrelated personal reasons, that is normal turnover. If they leave citing the same manager, the same frustration or the same missing progression, that is a pattern, and the pattern is yours to fix.