What is a notice period?

A notice period is the amount of time between notification of an employee’s departure or dismissal and the employee’s last day at work. The notice period applies to both employees and employers. An employee who intends to resign should inform their employer in advance, and an employer should notify an employee before terminating employment.

In the U.S., employment relationships are at-will by default: employers and employees can end the relationship for any legitimate, rightful reason. Because the at-will system can feel insecure, most companies implement employment contracts that define the terms and conditions.

U.K. law also prescribes employees and employers to notify the opposite party of departure or dismissal– the length of the notice period depends on the duration of the employment period. An employment contract, however, is still essential to determine the correct procedure regarding the notice period. 

Why should HR care about notice periods?

Establishing a notice period policy can contribute to:

• Continuous productivity
• High morale
• Healthy employee-employer relationships 
• Positive employee reputation

In brief, the notice period is common decency: it enables HR personnel to search for an appropriate candidate to fill the vacancy and departing employees to prepare mentally and emotionally for the next stage of their career.

What can HR leaders do to implement the notice period system?

HR leaders can nurture a culture that effectively uses notice periods through these tactics:

• Provide an employment contract. The employment contract should explain the notice period policy in simple language. A straightforward document that relays the employee and employer obligations holds both sides accountable for their conduct.  
• Present incentives. Companies can consider providing severance pay or a discretionary bonus to motivate employees to notify their employer in advance. HR and legal professionals should analyze the local government severance pay laws to ensure alignment with the incentive plan. 
• Leverage performance reviews. Documenting unsatisfactory employee conduct in performance reviews enables managers to maintain an awareness of negative employee behavioral patterns. Addressing a problem before it escalates allows employees to improve their comportment and minimize the chances of a sudden resignation or dismissal.   
• Hone managers’ communication skills. Equipping managers with problem-solving tools helps them address issues and determine the root of the problem. Identifying reasons for employee dissatisfaction can help employees decide if they genuinely want to leave their job– ultimately reducing attrition and boosting retention.     
• Demonstrate goodwill during the notice period. HR leaders should implement an empathetic approach when preparing to give notice. Demonstrating etiquette when notifying an employee of dismissal can lead to a kinder disengagement process between employer and employee. 

How can implementing a notice period improve company culture?

The notice period establishes a timeline for the termination process, enabling each side a smoother transition to the next stage. Adhering to the notice period rules reflects mutual respect towards the opposite party, a rudimentary component of a healthy employment relationship and a necessity for robust company culture.