In small companies, departures often feel personal. Teams work long hours together, operate closely, and build something from scratch with a strong sense of shared responsibility. There’s a feeling of being in it together, facing constant challenges side by side. Therefore, when someone leaves, it can shake things up. For some, the initial reaction may even be, “This feels like a betrayal.” And honestly, it can be deeply frustrating.
But this is part of startup life. We allow ourselves a brief moment to feel disappointed, then we move on.
As we do, it’s important to keep the atmosphere as positive as possible, handle the departure with respect, and bring things to a thoughtful close.
An employee who leaves ultimately becomes an ambassador for the organization, both externally and internally. Team members observe how the company treats people who are leaving and take cues about the organization’s real values, not the ones listed on the website.
Companies that know how to part ways respectfully and show appreciation send a strong, positive message to the employees who stay.
From a practical standpoint, it’s also important to plan for a smooth handover. This includes proper documentation, knowledge transfer, and onboarding the replacement. In some cases, it may also involve limited ongoing support after departure, once a successor is in place.
In this section of the guide, we cover the operational, accounting, and strategic organizational considerations involved in preparing for a healthy and well-managed employee departure.
Operational considerations:
When ending an employment relationship, it’s recommended to run a structured offboarding process and document it.
Below are practical examples of actions to include as part of a structured offboarding process:
- Create an internal Google Sheet template that tracks access removal from systems
- Identify and cancel paid subscriptions, platforms, and services associated with the employee, ensuring auto-renewals are disabled
- Coordinate password handover
- Ask for contact details for sending documents in the future.
Ideally, this file should align with the onboarding process and reflect which systems access was originally granted.
This is important both for day-to-day operations and for the long-term. On the operational side, it helps ensure the company doesn’t continue paying for unused accounts and that important communications aren’t missed.
From a future-facing perspective, during due diligence processes or certifications such as SOC, proper access management is critical for maintaining data security and demonstrating good governance over company systems.
Accounting considerations
As part of the offboarding process, the company should complete a final settlement and issue a final payslip that includes:
- Payment for unused vacation days
- Payment of recuperation pay, if it has not already been paid
- Form 161 and the relevant approvals related to severance pay
- Release of funds from pension and savings plans
- A waiver signed by the employee confirming they have no further claims against the employer
- The option for the employee to exercise vested options
The items above reflect the accounting and payroll steps typically required in Israel. In other locations, different documents or information may be required, so the process should always be adapted to local regulations.
Strategic and organizational considerations
A respectful and well-managed departure process has a lasting impact beyond the individual employee. How people leave shapes the company’s reputation, influences how remaining team members perceive leadership, and reinforces what the organization truly stands for in practice. At the same time, a thoughtful transition supports business continuity through proper knowledge transfer and clear ownership. Organizations that handle exits well strengthen trust, stability, and long-term engagement across the team.
Below are examples of actions that can help support a positive and well-managed departure process:
- Coordinate the team communication with the employee in advance
This includes deciding whether the employee would like to share the news themselves and agreeing on the message. In more sensitive cases, both sides may prefer a general and less detailed message to be shared with the team.
When the departing employee is a key contributor, manager, or highly visible figure, it’s important to think one step ahead. Prepare for tough questions that may arise and decide in advance how to address them (“are you leaving because you don’t believe in the company anymore”?). - Conduct an exit interview
The goal of an exit interview is to gather feedback on the employee’s experience, understand the reasons for their departure when relevant, identify gaps or opportunities for improvement, and close the relationship in a respectful and positive way.
At this stage, employees are often more comfortable speaking openly. With some emotional distance and their attention already shifting to what comes next, they tend to be more candid and less concerned about potential consequences.
The interview can be conducted in person, or through a short online questionnaire followed by a conversation, depending on the company’s size and level of formality.
Sample questions:- To what extent did you feel there were opportunities for growth within the company?
- What could be improved in the company’s top-down communication?
- How connected did you feel to the company’s goals and to how they were pursued?
Use these questions to identify where the organization and its managers can improve.
Additional considerations when preparing for an employee’s departure and hiring a replacement:
- Who covers the role if a replacement hasn’t been hired yet?
If the employee leaves before a replacement is in place, this needs to be planned. Before assigning coverage to a team lead or another team member, define the timeframe you are preparing for.
It’s recommended to plan for a suboptimal scenario. Start by estimating how many months it may take to fill the position. Hiring timelines vary by role and geography: for standard roles, this is typically 30 to 90 days; for senior roles, 90 to 120 days is more common.
In addition, factor in the ramp-up period, until the new hire is fully up to speed and able to take ownership. Together, these two periods define the timeframe you should plan for.
With this horizon in mind, review whether any critical milestones or deadlines may be affected. Consider whether tasks or projects should be temporarily reprioritized to reduce load during this period.
When the departure is on good terms, it may also be worth considering whether the departing employee can stay on for a longer transition. - Has the role changed, and does it need to be adjusted before hiring a replacement?
In some cases, an employee’s departure is an opportunity to reassess how the role is currently structured and the profile it requires. In other words, what worked yesterday may no longer be the right fit today.
For example, as companies grow, it’s not always realistic to expect one person to both handle customer upsell and write complex SQL queries. Growth often brings greater specialization. Even if the company initially hired employees under a “do everything” startup model, that approach doesn’t necessarily suit every stage of the company’s development.
This is an opportunity to step back and ask a few key questions:- What has worked well so far, and what might be done differently?
- What has changed in the organization: larger teams, new functions, or challenges that didn’t exist when the role was originally filled?
Based on the insights that emerge from this reflection, you can clarify the organization’s current needs and define the profile that best fits them.
Once you’ve redefined the role requirements, this is the right time to use our “Questions to Ask Before Opening a Position” guide to shape the role in line with the organization’s current needs.
Disclaimer: This playbook is provided for general informational purposes only and does not constitute legal advice or create an attorney-client relationship. Employment laws vary by jurisdiction, and founders should consult a qualified employment attorney before acting on any hiring, termination, or other HR decisions discussed here.