Employee notice periods: Getting the balance right

notice-periods

New XpertHR Benchmarking research has found that most employers are happy with the way notice periods work at their organisation, balancing the needs of the employer with those of the individual.

The 2016 notice period survey, which polled responses from more than 600 organisations, found that the length of employee notice periods typically increases with seniority.

Just under half (46.6%) of employers use one month fixed-term employee notice periods for directors who resign after completing their probationary period, while more than a third (37.8%) set them at six months.

Below director level, employers using fixed-term employee notice periods tend to set them at three months for managers (58.6% of employers) and one month for non-manual staff and manual staff (74.9% and 53.8% of employers, respectively).

Most employers favour fixed-term employee notice periods, with 55.9% of employers using them exclusively.

The remainder allow some flexibility in the process, with 27.1% of employers using both fixed-term and variable-term employee notice periods, and 15% using variable-term employee notice periods exclusively.

Usage of variable-term employee notice periods varies widely across employers in the XpertHR survey.

Most employers increase variable-term employee notice periods in line with seniority or length of service, while a minority set longer employee notice periods for hard-to-fill roles.

Issues with employee notice periods

Nearly all employers taking part in the XpertHR survey (92.6% of the sample) expect employees who resign after completing their probationary period to work their full notice period.

The remaining employers – all from the private sector – will typically pay the employee in lieu of notice, agree an earlier termination with no compensation payment, or put the employee on garden leave.

However, while most employers expect employees to work their full notice period, the most common issue employers have experienced with this is individuals leaving before the end of their notice period.

Some employers say that there is little that they can do in these circumstances. “If employees choose to leave before the end of the employee notice period, we are unlikely to incur the legal expense required to pursue them,” said one retail-sector employer.

It is difficult to balance what is fair for the employee in a senior role with what is reasonable for the organisation in terms of recruiting replacements and having a timely handover” – not-for-profit respondent

Other issues that employers have experienced with employee notice periods include employees becoming disengaged from their work while serving their notice period and mismatches between the employee notice period and the actual amount of time typically required to recruit and train a replacement.

For some employers, making the most effective use of employee notice periods is about achieving a balance between the employee’s needs and those of the organisation.

“It is difficult to balance what is fair for the employee in a senior role with what is reasonable for the organisation in terms of recruiting replacements and having a timely handover,” said one not-for-profit sector respondent.

Ashok Kanani, employment law editor at XpertHR, commented: “Employers should bear in mind that in some situations they can benefit from agreeing a shorter notice period with the employee, for example where the business is experiencing a quiet period.

“Where an employer does agree to the employee working a shorter notice period, the agreement should be recorded in writing so that it is clear to the employee that wages and benefits will be paid up to the revised date only.”

Overall, employers are satisfied with employee notice periods. Only 18.5% of employers would like to see any change to employee notice periods at their organisation.

Among this group, the most common desired change is to increase employee notice periods for some or all employees. The remainder would like to see employee notice periods standardised, reduced or varied by seniority or length of service.

The survey also looks at the notice periods that apply during an employee’s probationary period. Two-thirds of employers (66.3%) set the notice period during probationary periods at one week. A further 16.1% opt for one month and 5.8% use two weeks.

The 2016 XpertHR Benchmarking survey on employee notice periods for employees who resign following the completion of their probationary period is based on responses from 608 organisations with a combined workforce of 1,024,528 employees. Subscribers to XpertHR Benchmarking can access the complete results data on employee notice periods.

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