David Jones’ Paul Zahra to stay – but should you hold on to staff who have resigned?

David Jones chief executive Paul Zahra has confirmed he will continue in his position, despite announcing his resignation in October last year citing “relentless” hours.

The move follows the appointment of a new non-executive director and chairman of the company, Gordon Cairns, as former chairman Peter Mason has stepped down after controversy erupted over share trades.

Cairns said he and the David Jones board were “delighted” that Zahra had committed to remain with the company as chief executive and managing director.

“Paul is an outstanding CEO and a world-class retailer who has done a remarkable job in leading and implementing the Company’s Future Strategic Direction Plan,” Cairns said.

“He has overseen the transformation of David Jones into an omnichannel retailer and is doing an excellent job in positioning the business for long-term success and growth.”

Zahra announced his resignation in 2013, saying he was burnt out from the huge commitment required to maintain the position.

A search began for his replacement, which has now ceased.             

Cairns was full of praise for Zahra’s conduct since this announcement, stating he had been “truly professional” during an “unsettling time for the company and the board”.

“Paul has the full and unwavering support of the board and shareholders, and we believe that David Jones is very fortunate to have secured his commitment to continuing as CEO and managing director of the company,” he said.

Zahra reiterated his dedication to the department store business.

“I have been at David Jones for more than 15 years and I have always felt a real sense of commitment and loyalty to the business, its shareholders, employees and customers,” he said.

“My commitment and loyalty has intensified in recent months given the changes and uncertainty that the business has experienced.”

The decision by Zahra and appointment of Cairns brings clarity to the leadership of David Jones, which has been rocked in recent times amid a merger approach by rival Myer and a share trading investigation.

However it raises the question for SMEs – if a staff member resigns, is it wise to negotiate for them to stay on?

Change Factory consultant Mike Dwyer told SmartCompany that his general rule of thumb is that if people resign, let them go.

“You might get a short-term gain from getting them to stay … such as if they are the only person who knows how to use a certain computer technology,” he says.

“You could negotiate to keep them on for three months or so while you work it out … this is the only circumstance in which I would consider a counter offer.”

However he says that a business should be prepared in advance to cover any staff member who resigns, so that there is no sudden skills shortage.

If you negotiate to keep a staff member who has resigned by offering greater pay or incentives, the trouble is you could set the precedent for other team members to follow suit, he explains.

“If staff think the only circumstances in which they will get a pay rise is to resign, then you are setting the wrong example.”

Dwyer says in situations such as Zahra’s, a great deal of thought would have gone into the decision to resign, so it would likely require as much thought to reconsider and stay.

“The higher up the food chain you are, the more complex it is to work out … you have to think of your shares, your future earning capabilities, and your reputation.

“You have to explain your decision to your board and the company.”

Our HR Company managing director Margaret Harrison agrees with Dwyer that if an employee resigns, let them go.

“I would never, ever, ever try and convince them to stay,” she says.

“Their headspace has left the company … people don’t make a decision to leave a company lightly.”