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No obligation. If your direct report told you they were interviewing they must trust you. Don't break that trust. It's up to them to decide when to give notice if and when they get an offer.
If your manager is going to blame it on you, they’ll do so when your DR leaves anyways. What if you told your manager You suspect your direct report is at risk for leaving and that you’re flagging it so you can be prepared? If it’s in the employee’s, and agency’s and client’s best interest to intercede with a promo or counter, you could be a hero. If it’s about $/title/recognition, you have a perfect opportunity to elevate knowing your agency could potentially keep someone they’ve invested in, with a happy outcome for all. If your direct report is unhappy, that’s a different matter. As a manager, yes you have a responsibility to your DR but you also have one to your employer and to your clients. Why not use this knowledge to try and ID a win/win, and look like the manager you are into the bargain?
You also say it’s likely, not certain. Offers fall apart at the last minute ... in the event this opportunity doesn’t work out, it could jeopardize your report’s standing with the company if you tell your boss they have one foot out the door.
In the meantime, I’d think hard about how you can maximize the next person’s growth and have some talking points prepped. That way, when you do sit down with your manager after your report has given 2 weeks, you can say, “they’re leaving because XYZ, and here are three big things we can do as a dept to prevent that happening in the future.”
I can’t believe this is a discussion, if someone I was managing snitched on me I’d be pissed. Don’t burn bridges and mind your business.
If you trusted someone at work - someone you report to no less - with information that directly impacts your career/job security, how would you feel if you found out they betrayed your trust? This person doesn’t have an offer yet. You could be fucking them over in a big, big way. Also, it’s not your information to share.
You responded in another comment that you’re worried that this person leaving will reflect poorly on you? I’d worry more about how snitching reflects on you.
Chief
OP: How do you know? Did they tell you in confidence? If so, you have no right to tell your boss. Unless they’re doing something illegal it’s absolutely not your obligation to tell the company.
You could completely derail their plans and sabotage their job search and their current job if they don’t end up leaving.
Leaving a company is normal and you should be able to find a replacement in time.
Don’t be short-sighted. You could work with this person again and they might be your boss one day. Do you want them to trust you?
Chief
Account Directors be like
Technically your obligation is to do right by the company you work for. It’s in the company’s interest to start a recruitment process ASAP to minimise any disruption. You boss is only likely to see this as unfortunate but not uncommon, so not a big deal at all. They’re unlikely to go and tell people you knew. If they find out you haven’t told them when you knew sooner, the trust with your boss may be compromised. Your only fallback in that is you thought they might be looking but weren’t sure.
Agree with ACD1. Why potentially screw over someone who works for you when you don’t have to at all?
You’re not legally obligated to tell anyone. Nor are you obligated within your job responsibly. You just need to decide what’s more important to you. Maintaining the trust of the person who told you, or wanting the suck up points for your boss. Personally I’d choose the first one
Pro
Unless this person leaving puts you in a huge bind and you will need to re-fill the position ASAP, leave it alone.