What is a notice period? Meaning, types, and more

Notice periods play a key role in smoothly managing staff transitions and ensuring business stability. A well-thought-out notice period creates a straightforward handover situation, including seamless employee transitions, effective knowledge transfer to incoming staff, and maintained project continuity.

Notice periods vary widely depending on local labor laws, company policies, and individual employment agreements. Let’s explore the different types of notice periods, how they contribute to effective workforce management, and how they benefit employees and employers.

Notice period meaning: What is a notice period?

A notice period is the amount of time between notification of a person’s departure or dismissal and their last day at work. It applies to both employees and employers: someone who intends to resign should inform their employer in advance, and an employer should notify a team member before ending their employment.

In the United States, employment relationships are at-will by default, meaning employers and employees can end the relationship at any time for a legitimate reason. However, many companies create their own employment contracts that define the terms and conditions of a notice period.

British law requires employees and employers to notify the opposite party of departure or dismissal. The notice period’s length depends on the employment period’s duration.

No matter the country, an employment contract is still essential to determine the correct procedure for 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 workplace reputation

In short, the notice period is common decency. It enables HR personnel to search for an appropriate candidate to fill the vacancy and helps departing team members.

How long is a notice period in employment?

In the United States, there is no federally mandated notice period for resigning employees. Instead, it’s common practice for employees to offer two weeks’ notice. However, this is guided by workplace norms and individual employment contracts rather than law​​.

A longer notice period, typically around four weeks, might be expected for specialized or senior roles to ensure a smooth transition​​.

In contrast to the United States, countries like Denmark and the United Kingdom have statutory notice periods that vary based on the length of employment and are stipulated by law.

​​In the UK, the statutory minimum notice period required by an employer starts at one week if the employee has been with the company for more than a month but less than two years. This period increases by one week per year of service, up to 12 weeks for 12 years or more​​.

A notice period also differs depending on the employment contract and whether the former team member has committed gross misconduct or is on probation.

Considerations for determining a notice period length

When determining the right notice period, it’s important to consider how long it will take to replace a team member. This is especially true for more senior roles where the recruitment process can take longer.

It’s also worth accounting for any projects the departing person may be involved in when they give their notice. Too short a notice period can leave other team members in the lurch, hindering performance and productivity.

It may also take a while for a new hire to become familiar with their role. Allowing time for a smooth handover between the departing professional and the new hire can reduce time to productivity.

The right notice period balances the needs of the former team member with the needs of the company, ensuring a successful transition that keeps everyone involved on good terms.

<<Use our free offboarding checklist to give your people an exceptional offboarding experience.>>

Why are notice periods required?

An infographic outlining the reasons why notice periods are so important. Legal compliance, operational continuity, employer-employee relationships, financial planning and psychological readiness.

Notice periods are essential in employment—primarily because they benefit both the employee and employer.

Legal compliance 

In many jurisdictions, employment laws require notice periods. This legal requirement ensures that both employer and employee have adequate time to prepare for the transition.

For instance, labor laws in some countries require employers to give notice before terminating a person, except in cases of gross misconduct. This protects individuals from sudden unemployment and allows them to find new employment.

Operational continuity

Notice periods provide employers with a buffer period to manage the recruitment and training of new staff. This helps maintain employee performance and operational continuity, especially in roles critical to the business’s day-to-day operations.

The notice period ensures sufficient time for knowledge transfer and for the new recruit to acclimate to their new role without undue pressure.

Employer-employee relationships

Notice periods foster a respectful and professional end to the employment relationship. They allow both parties to part ways on amicable terms, helping maintain a positive reputation for both the employer and the person leaving. 

Financial planning

Notice periods provide individuals with a predictable timeline for financial planning. Knowing their income will continue for the length of the notice period allows individuals to strategically budget and manage their expenses as they seek new employment.

Psychological readiness

Notice periods provide employees with a timeframe to adjust to the change in their professional lives. This period can be used for psychological preparation and practical arrangements, such as relocating for a new job or handling personal affairs related to the change.

Types of notice periods

There are a few types of notice periods since they differ based on employment circumstances:

Statutory notice periods

The legal minimum amount of notice that a person or organization needs to give before resignation or dismissal.

Contractual notice periods

A notice period that’s specified in an employment contract and can exceed statutory requirements, if any.

Probationary notice periods

A person on probation tends to receive a shorter notice period or none at all.

Payment in lieu of notice

An organization may not want or need a person to work through their notice, allowing them to leave immediately and paying them the equivalent salary for the period.

Garden leave

Paying a person their regular salary to stay away from work for their notice period while temporarily keeping them on as an employee so they’re unable to work elsewhere.

Zero-hour contracts

Zero-hour contracts do not typically have statutory notice period requirements. Workers can decline work without notice, effectively leaving without formal resignation. Similarly, employers can cease offering work without notice, though the contract remains valid until formally ended by either party.

<<Use our free offboarding checklist to give your people an exceptional offboarding experience.>>

How HR leaders can implement an effective notice period system

An infographic outlining how to implement a notice period system. Create clear employment contracts, offer incentives, leverage performance reviews, hone manager communication skills, properly communicate employee exits, work on a smooth transition, conduct employee exit interviews and demonstrate goodwill during the notice period

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

1. Communicate a clear employment contract

The employment contract should explain the notice period policy in simple language and clearly outline the obligations of the employee and employer.  

HR should ensure these details are communicated clearly during onboarding and revisited during periodic reviews. Providing FAQs or a dedicated session on notice period policies as part of employee training can also enhance understanding and compliance.

Incorporating employee management software can streamline this process. HR teams can use the platform’s customizable templates and automated workflows to ensure that all contractual details–including notice period policies–are consistently communicated across the organization. 

This reduces the risk of misunderstanding and ensures that policy updates are efficiently rolled out and accessible to all employees through a centralized platform.

2. Present incentives to adhere to notice periods

Companies can consider providing severance pay or a discretionary bonus to motivate team members to notify their employer in advance. Before launching any incentive, have HR and legal professionals review the plan to guarantee compliance with local government severance pay laws. 

3. Leverage performance reviews

Documenting unsatisfactory professional conduct in performance reviews enables managers to track negative behavioral patterns. Addressing a problem before it escalates allows people to improve their behavior and minimize the chances of a sudden resignation or dismissal.   

4. Hone managers’ communication skills

Equipping managers with problem-solving tools helps them identify the root causes of employee departures and address these issues, reducing attrition and boosting retention. You can enhance managers’ communication skills by focusing on training for active listening, clear and transparent communication, providing constructive feedback, and effective conflict resolution.

5. Properly communicate employee exits

When communicating employee exits, first inform directly affected team members through a structured meeting, outlining the transition plan and the departure’s impact. Follow up with a broader, respectful company announcement that maintains the departing employee’s privacy. 

This approach ensures clarity and maintains morale while respecting all parties involved.

6. Work on a smooth transition

A structured process for the handover of responsibilities can make transitions smoother. This might involve detailed handover documents, cross-training of team members, staggered departures if multiple people leave, and a clear employee offboarding process.

7. Conduct employee exit interviews 

To optimize employee exit interviews, schedule them one to two weeks before departure to ensure relevant and reflective feedback. Conducting the interviews in a confidential setting will encourage open and honest communication. Using a consistent set of questions can identify trends, yet they need to be flexible enough to explore deeper as needed. 

This structured approach maximizes the potential of exit interviews, providing critical data to improve retention and workplace satisfaction.

8. Demonstrate goodwill during the notice period

HR leaders can take an empathic approach when preparing to give notice. Demonstrating etiquette when notifying a professional of dismissal can lead to a kinder disengagement process between employer and employee.

Learn more about notice periods

Here’s a deeper look at some frequently asked questions around notice periods.

What is a notice period for a new job?

When starting a new job, the notice period refers to the amount of time an individual agrees to continue working at their current job after accepting an offer but before they start the new position.

This period allows the employee to complete current projects and helps the employer plan for a replacement or reassignment of duties.

What is a correct notice period?

A “correct” notice period can vary widely based on the contractual agreement between the employer and employee, the employee’s role and seniority, and local labor laws.

Notice periods are typically two weeks. For more senior-level positions, notice periods can be three to six months.

What is a notice period on a job application?

On a job application, a notice period refers to how long you’ll need to work for your current employer before you can sever ties with the company and move on to your new role at another organization.

Knowing your availability or notice period gives time for wrapping up ongoing projects, handing over responsibilities, and minimizing any disruption to the current workplace. It also offers employers the chance to find a suitable replacement.

How a notice period can improve company culture

The notice period establishes a timeline for the separation process, enabling each side a smoother transition to the next stage. Adhering to the notice period rules reflects mutual respect towards the opposite party, an essential part of a healthy employment relationship and a necessity for a flourishing company culture.

Meet Bob

Need some support? The Bob HR platform makes notice period management simple with automated HR workflows, collaborative workforce planning, employee self-service opportunities, and a centralized, secure repository.

Bob can handle your notice period needs, but it doesn’t stop there. From out-of-the-box onboarding, workflows, performance management, and compensation management to integrations with leading payroll providers and more, Bob’s breadth of core HR functionally gives your team everything needed to operate efficiently.

HR teams can use Bob’s complete HR system for:

  • Workforce Planning: Optimize workforce productivity and build hiring plans that track all current and future position openings
  • People Analytics: Track KPIs including retention, growth, headcount, and absenteeism to gain insights into your team
  • Hiring: Streamline applicant tracking and interviews, build a strong candidate pipeline, and provide a seamless hiring experience that puts people first
  • Onboarding: Use Bob’s onboarding walkthroughs to automate your onboarding process and give new joiners a warm welcome experience
  • Payroll: Reduce payroll preparation time from hours to minutes with a centralized dashboard 
  • Core HR: Automate HR processes and store all HR documentation on a single, easily accessible platform