Employee Blackmail

“I have an employee asking for more pay but her role and performance do not justify it. However, she is the only person who knows how to do what she does so I feel like I have to give in. Is there another choice?”

Your HR Survival Tip

Too many companies have that one employee who seems to have all the company history or all the knowledge about a needed process or something else that is vital to the company. When this happens, it means you allowed that employee to have a certain amount of power over your company.

When an employee has this power and chooses to use it as an ultimatum, it’s a form of blackmail. You either do what they “ask” or they’ll leave with all that information in their brain. Granted, it’s not really legal blackmail but it certainly feels like it if you’re the one who is dealing with this problem. There are really only a few ways to deal with this:

• Give in to the employee’s demands but realize this is a short-term solution. What you’re really doing is buying time. Immediately start thinking about how you can start backing up the information they have. As a rule, companies never keep this employee around for more than a year after the ultimatum was issued.


• Create a cross-training program throughout the company on all processes. Develop a program where at least one more employee will learn each of these processes but consider switching the pairs around periodically. Be specific on how often they will train together and what types of training they should focus on each time. Make sure the backup person uses that knowledge at least monthly so they don’t forget what they learned.


• Document your processes. We have seen founders and managers do a “brain dump” that records their thought processes on a variety of subjects. Consider video recordings when the process is on the computer. Use whatever you can to ensure the company is the ultimate holder of all information considered vital.

The best way is to never let yourself get into this position. Review your personnel and processes and decide where you are lacking information the company should have. The value of your company increases when you can show no one employee is vital to the company’s future success.

If you find yourself being blackmailed, remove the emotion and think through the problem logically. What can you do to bridge the gap? What outside resources might be available to you to help if this person suddenly leaves? How can you avoid this problem in the future? If this is vital information for your company, you should spend as much time protecting it as you do any other proprietary information.